10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2019

or

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

EXCHANGE ACT OF 1934

For the transition period from (not applicable)

Commission file number: 1-6880

U.S. Bancorp

(Exact name of registrant as specified in its charter)

Delaware	41-0255900
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

800 Nicollet Mall, Minneapolis, Minnesota 55402

(Address of principal executive offices) (Zip Code)

(651) 466-3000

(Registrant’s telephone number, including area code)

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

Title of each class	Trading     symbols	Name of each exchange       on which  registered
Common Stock, $.01 par value per share	USB	New York Stock Exchange
Depositary Shares (each representing 1/100th interest in a share of Series A Non-Cumulative Perpetual Preferred Stock, par value $1.00)	USB PrA	New York Stock Exchange
Depositary Shares (each representing 1/1,000th interest in a share of Series B Non-Cumulative Perpetual Preferred Stock, par value $1.00)	USB PrH	New York Stock Exchange
Depositary Shares (each representing 1/1,000th interest in a share of Series F Non-Cumulative Perpetual Preferred Stock, par value $1.00)	USB PrM	New York Stock Exchange
Depositary Shares (each representing 1/1,000th interest in a share of Series H Non-Cumulative Perpetual Preferred Stock, par value $1.00)	USB PrO	New York Stock Exchange
Depositary Shares (each representing 1/1,000th interest in a share of Series K Non-Cumulative Perpetual Preferred Stock, par value $1.00)	USB PrP	New York Stock Exchange
0.850% Medium-Term Notes, Series X (Senior), due June 7, 2024	USB/24B	New York Stock Exchange

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

None

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

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

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☑    No  ☐

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

Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐

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

As of June 30, 2019, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $83.0 billion based on the closing sale price as reported on the New York Stock Exchange.

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

Class	Outstanding at January 31, 2020
Common Stock, $.01 par value per share	1,522,494,686

DOCUMENTS INCORPORATED BY REFERENCE

Document		Parts Into Which Incorporated
1.	Portions of the Annual Report to Shareholders for the Fiscal Year Ended December 31, 2019 (the “2019 Annual Report”)	Parts I and II
2.	Portions of the Proxy Statement for the Annual Meeting of Shareholders to be held April 21, 2020 (the “Proxy Statement”)	Part III

PART I

Item 1. Business

Forward-Looking Statements

THE FOLLOWING INFORMATION APPEARS IN ACCORDANCE WITH THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: This report contains forward-looking statements about U.S. Bancorp (“U.S. Bancorp” or the “Company”). 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. Deterioration in general business and economic conditions or turbulence in domestic or global financial markets could adversely affect U.S. Bancorp’s revenues and the values of its assets and liabilities, reduce the availability of funding to certain financial institutions, lead to a tightening of credit, and increase stock price volatility. 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 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 its investment securities; legal and regulatory developments; litigation; increased competition from both banks and non-banks; changes in the level of tariffs and other trade policies of the United States and its global trading partners; changes in customer behavior and preferences; breaches in data security; failures to safeguard personal information; 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 reputation risk.

For discussion of these and other risks that may cause actual results to differ from expectations, refer to the sections entitled “Corporate Risk Profile” on pages 36 to 56 and “Risk Factors” on pages 146 to 156 of the 2019 Annual Report. In addition, factors other than these risks also could adversely affect U.S. Bancorp’s results, and the reader should not consider these risks 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.

General Business Description

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

U.S. Bancorp’s banking subsidiary, U.S. Bank National Association, is engaged in the general banking business, principally in domestic markets. U.S. Bank National Association, with $374 billion in deposits at December 31, 2019, provides a wide range of products and services to individuals, businesses, institutional organizations, governmental entities and other financial institutions. Commercial and consumer lending services are principally offered to customers within the Company’s domestic markets, to domestic customers with foreign operations and to large national customers operating in specific industries targeted by the Company. Lending services include traditional credit products as well as credit card services, lease financing and import/export trade, asset-backed lending, agricultural finance and other products. Depository services include checking accounts, savings accounts and time certificate contracts. Ancillary services such as capital markets, treasury management and receivable lock-box collection are provided to corporate customers. U.S. Bancorp’s bank and

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trust subsidiaries provide a full range of asset management and fiduciary services for individuals, estates, foundations, business corporations and charitable organizations.

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

Banking and investment services are provided through a network of 2,795 banking offices principally operating in the Midwest and West regions of the United States, through on-line services and over mobile devices. The Company operates a network of 4,459 ATMs and provides 24-hour, seven day a week telephone customer service. Mortgage banking services are provided through banking offices and loan production offices throughout the Company’s domestic markets. Lending products may be originated through banking offices, indirect correspondents, brokers or other lending sources. The Company is also one of the largest providers of corporate and purchasing card services and corporate trust services in the United States. A wholly-owned subsidiary, Elavon, Inc. (“Elavon”), provides domestic merchant processing services directly to merchants and through a network of banking affiliations. Wholly-owned subsidiaries, and affiliates of Elavon, provide similar merchant services in Canada, Mexico and segments of Europe. The Company also provides corporate trust and fund administration services in Europe. These foreign operations are not significant to the Company.

On a full-time equivalent basis, as of December 31, 2019, U.S. Bancorp employed 69,651 people.

Competition

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

Government Policies

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

Supervision and Regulation

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

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

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General As a bank holding company, the Company is subject to regulation under the Bank Holding Company Act (the “BHC Act”) and to inspection, examination and supervision by the Federal Reserve. U.S. Bank National Association and its subsidiaries are subject to regulation, examination and supervision primarily by the Office of the Comptroller of the Currency (the “OCC”) and also by the FDIC, the Federal Reserve, the Consumer Financial Protection Bureau (the “CFPB”), the Securities and Exchange Commission (the “SEC”) and the Commodities Futures Trading Commission (the “CFTC”) in certain areas.

Supervision and regulation by the responsible regulatory agency generally include comprehensive annual reviews of all major aspects of a bank holding company’s or bank’s business and condition, and imposition of periodic reporting requirements and limitations on investments and certain types of activities. U.S. Bank National Association, the Company and the Company’s non-bank affiliates must undergo regular on-site examinations by the appropriate regulatory agency, which examine for adherence to a range of legal and regulatory compliance requirements. If they deem the Company to be operating in a manner that is inconsistent with safe and sound banking practices, the applicable regulatory agencies can require the entry into informal or formal supervisory agreements, including board resolutions, memoranda of understanding, written agreements and consent or cease and desist orders, pursuant to which the Company would be required to take identified corrective actions to address cited concerns and to refrain from taking certain actions. Supervision and examinations are confidential, and the outcomes of these actions generally are not made public.

Banking and other financial services statutes, regulations and policies are continually under review by the United States Congress, state legislatures and federal and state regulatory agencies. In addition to laws and regulations, state and federal bank regulatory agencies may issue policy statements, interpretive letters and similar written guidance applicable to the Company and its subsidiaries. Any change in the statutes, regulations or regulatory policies applicable to the Company, including changes in their interpretation or implementation, could have a material effect on its business or organization.

In May 2018, the Economic Growth, Regulatory Relief and Consumer Protection Act (the “EGRRCPA”) was signed into law. Among other regulatory changes, the EGRRCPA amends various sections of the Dodd-Frank Act, including section 165, which was revised to raise the asset thresholds for mandatory application of enhanced prudential standards for bank holding companies from $50 billion to $250 billion. Bank holding companies with $250 billion or more in total consolidated assets, including the Company, remain subject to the Dodd-Frank Act enhanced prudential standards requirements described below.

The Dodd-Frank Act, as amended by the EGRRCPA, however, mandates that the Federal Reserve tailor the enhanced prudential standards applicable to a banking holding company or category of bank holding companies based on several factors, including size, capital structure, complexity, and other risk-related factors. In October 2019, the federal banking regulators adopted two final rules (the “Tailoring Rules”) that revised the criteria for determining the applicability of regulatory capital and liquidity requirements for large United States banking organizations, including the Company and U.S. Bank National Association, and that tailored the application of the Federal Reserve’s enhanced prudential standards to large banking organizations. The rules applicable to the Company and U.S. Bank National Association are described in more detail below.

Supervisory Ratings Federal banking regulators regularly examine the Company and U.S. Bank National Association to evaluate their financial condition and monitor their compliance with laws and regulatory policies. Following those exams, the Company and U.S. Bank National Association are assigned supervisory ratings. These ratings are considered confidential supervisory information and disclosure to third parties is not allowed without permission of the issuing regulator. Violations of laws and regulations or deemed deficiencies in risk management practices may be incorporated into these supervisory ratings. A downgrade in these ratings could limit the Company’s ability to pursue acquisitions or conduct other expansionary activities for a period of time, require new or additional regulatory approvals before engaging in certain other business activities or investments, affect U.S. Bank National Association’s deposit insurance assessment rate, and impose additional recordkeeping and corporate governance requirements, as well as generally increase regulatory scrutiny of the Company.

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In November 2018, the Federal Reserve adopted a new rating system, the Large Financial Institution Rating System (“LFI Rating System”), to align its supervisory rating system for large financial institutions, including the Company, with its current supervisory programs for these firms. As compared to the rating system it replaces, which will continue to be used for smaller bank holding companies, the LFI Rating System places a greater emphasis on capital and liquidity, including related planning and risk management practices. The Company will receive its first ratings under the LFI Rating System in 2020. These ratings will remain confidential.

The Federal Reserve has also proposed guidance for the governance and controls component of the LFI Rating System that addresses the role of boards of directors as well as the responsibilities of members of senior and business line management and controls at large financial institutions.

Bank Holding Company Activities The Company is a bank holding company under the BHC Act and has elected to be a financial holding company pursuant to the provisions of the Gramm-Leach-Bliley Act (the “GLBA”). Under the GLBA, bank holding companies that qualify and elect to be treated as financial holding companies may engage in, and affiliate with financial companies engaging in, a broader range of activities than would otherwise be permitted for a bank holding company. Under the GLBA’s system of “functional regulation,” the Federal Reserve acts as an umbrella regulator for the Company, and certain of the Company’s non-bank subsidiaries are primarily regulated directly by additional agencies based on the particular activities of those subsidiaries.

If a financial holding company or a depository institution controlled by a financial holding company ceases to be well-capitalized or well-managed, the Federal Reserve may impose corrective capital and managerial requirements on the financial holding company and may place limitations on its ability to conduct all of the business activities that financial holding companies are generally permitted to conduct and its ability to make certain acquisitions. See “Permissible Business Activities” below. If the failure to meet these standards persists, the financial holding company may be required to divest its depository institution subsidiaries or cease all activities other than those activities that may be conducted by bank holding companies that are not financial holding companies. In addition, if a depository institution controlled by a financial holding company does not receive a Community Reinvestment Act (“CRA”) rating of at least “satisfactory” at its most recent examination, the Federal Reserve will prohibit the financial holding company from conducting new business activities that financial holding companies are generally permitted to conduct and from making certain acquisitions.

The Federal Reserve also requires bank holding companies to meet certain applicable capital and management standards. Failure by the Company to meet these standards could limit the Company from engaging in any new activity or acquiring other companies without the prior approval of the Federal Reserve.

Permissible Business Activities As a financial holding company, the Company may affiliate with securities firms and insurance companies and engage in other activities that are financial in nature or incidental or complementary to activities that are financial in nature. “Financial in nature” activities include securities underwriting, dealing and market making; sponsoring mutual funds and investment companies; insurance underwriting and agency; merchant banking; and activities that the Federal Reserve, in consultation with the Secretary of the United States Treasury, determines to be financial in nature or incidental to such financial activity. “Complementary activities” are activities that the Federal Reserve determines upon application to be complementary to a financial activity and that do not pose a safety and soundness risk.

The Company generally is not required to obtain Federal Reserve approval to acquire a company (other than a bank holding company, bank or savings association) engaged in activities that are financial in nature or incidental to activities that are financial in nature, as determined by the Federal Reserve, as long as the Company meets the capital, managerial and CRA requirements to qualify as a financial holding company. However, the Company is required to receive approval for an acquisition in which the total consolidated assets to be acquired exceed $10 billion. Financial holding companies are also required to obtain the approval of the Federal Reserve before they may acquire more than five percent of the voting shares or substantially all of the assets of an

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unaffiliated bank holding company, bank or savings association. In addition, banks must receive approval before they may acquire, merge with, acquire substantially all of the assets of or assume any deposits of a bank or savings association and may be required to receive approval for acquisitions of other companies.

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

Banks may merge across state lines to create interstate branches and are permitted to establish new branches in another state to the same extent as banks chartered by that state.

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

Source of Strength The Company is required to act as a source of strength to U.S. Bank National Association, and to commit capital and financial resources to support this subsidiary in circumstances where it might not otherwise do so. Under these requirements, the Federal Reserve may in the future require the Company to provide financial assistance to U.S. Bank National Association, should it experience financial distress. Capital loans by the Company to U.S. Bank National Association would be subordinate in right of payment to deposits and certain other debts of U.S. Bank National Association. In the event of the Company’s bankruptcy, any commitment by the Company to a federal bank regulatory agency to maintain the capital of U.S. Bank National Association would be assumed by the bankruptcy trustee and entitled to a priority of payment.

The Federal Reserve is prohibited from requiring payment by a bank holding company to a depository institution if the functional regulator of the depository institution objects to the payment. In those cases, the Federal Reserve could instead require the divestiture of the depository institution and impose operating restrictions pending the divestiture.

OCC Heightened Standards The OCC has issued guidelines establishing heightened standards for large national banks such as U.S. Bank National Association. The guidelines establish minimum standards for the design and implementation of a risk governance framework for banks. The OCC may take action against institutions that fail to meet these standards.

Enhanced Prudential Standards Under the Dodd-Frank Act, as modified by the EGRRCPA, and the Tailoring Rules, large bank holding companies, such as the Company, are subject to certain enhanced prudential standards based on the banking organization’s size, status as a global systemically important bank, cross-jurisdictional activity, weighted short-term wholesale funding, nonbank assets and off-balance sheet exposures. The prudential standards include enhanced risk-based capital and leverage requirements, enhanced liquidity requirements, enhanced risk management and risk committee requirements, a requirement to submit a resolution plan, single-counterparty credit limits and stress tests. These standards also require the Federal Reserve to impose a maximum 15-to-1 debt-to-equity ratio on a bank holding company with total consolidated assets of $250 billion

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or more, if the Financial Stability Oversight Council determines that the company poses a grave threat to the financial stability of the United States and that the imposition of such a debt-to-equity requirement would mitigate such risk. In addition, the Federal Reserve is required to establish early remediation requirements for bank holding companies with total consolidated assets of $250 billion or more, but these requirements have not yet been finalized.

Certain of the enhanced prudential standards applicable to the Company are described below in further detail, including changes that have been made to these requirements under the Tailoring Rules.

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

In general, dividends payable by U.S. Bank National Association and the Company’s trust bank subsidiaries, as national banking associations, are limited by rules that compare dividends to net income for periods defined by regulation.

The Company’s ability to declare and pay dividends is also limited by Federal Reserve regulations and policy. Large bank holding companies such as the Company may generally only pay dividends and repurchase stock in accordance with a capital plan that has been reviewed by the Federal Reserve and as to which the Federal Reserve has not objected. See “Comprehensive Capital Analysis and Review” below for further details.

The OCC, the Federal Reserve and the FDIC also have authority to prohibit or limit the payment of dividends by the banking organizations they supervise (including the Company and U.S. Bank National Association), if, in the banking regulator’s opinion, payment of a dividend would constitute an unsafe or unsound practice in light of the financial condition of the banking organization.

The Company and U.S. Bank National Association must maintain the applicable common equity tier 1 capital conservation buffer to avoid becoming subject to restrictions on capital distributions, including dividends. For more information on the common equity tier 1 capital conservation buffer and the stress buffer requirements that the Federal Reserve has proposed that would replace the common equity tier 1 capital conservation buffer for bank holding companies, see “Capital Requirements” and “Proposed Stress Buffer Requirements” below, respectively.

Capital Requirements The Company is subject to certain regulatory risk-based capital and leverage requirements under capital rules adopted by the Federal Reserve, and U.S. Bank National Association is subject to substantially similar rules adopted by the OCC. These rules implement the Basel Committee’s framework for strengthening the regulation, supervision and risk management of banks (“Basel III”), as well as certain provisions of the Dodd-Frank Act. These quantitative calculations are minimums, and the Federal Reserve and OCC may determine that a banking organization, based on its size, complexity or risk profile, must maintain a higher level of capital in order to operate in a safe and sound manner.

Under the Tailoring Rules, the Company and U.S. Bank National Association are each subject to “Category III” standards because they are not subject to “Category I” or “Category II” standards and have at least $250 billion in total consolidated assets. Accordingly, the Company and U.S. Bank National Association are now “standardized approach” banking organizations and are no longer required to calculate risk-based capital ratios under the advanced approaches. As “standardized approach” banking organizations, the Company and U.S. Bank National Association are subject to the final rule adopted by the banking regulators in July 2019 relating to simplifications of the capital rules applicable to non-advanced approach organizations. These rules became effective on January 1, 2020, and provide for simplified capital requirements relating to the threshold deductions for mortgage servicing assets, deferred tax assets arising from temporary differences that a banking organization could not realize through net operating loss carry backs, and investments in the capital of unconsolidated financial institutions, as well as the inclusion of minority interests in regulatory capital.

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Under the United States Basel III-based capital rules, the Company is subject to a minimum common equity tier 1 (“CET1”) capital ratio (CET1 capital to risk-weighted assets) of 4.5 percent, a minimum tier 1 capital ratio of 6.0 percent and a minimum total capital ratio of 8.0 percent. The Company is also subject to a 2.5 percent common equity tier 1 capital conservation buffer and, if deployed by the Federal Reserve, up to a 2.5 percent common equity tier 1 countercyclical capital buffer. These additional requirements must be satisfied entirely with capital that qualifies as CET1. The countercyclical capital buffer applies only to banking organizations subject to Category I, II or III standards under the Tailoring Rules, including the Company. Although the Federal Reserve has not to date raised the countercyclical capital buffer above zero percent, the countercyclical capital buffer could change in the future, which would also change the effective minimum capital ratios to which the Company is subject.

Banking organizations that fail to meet the effective minimum ratios once the capital conservation buffer is taken into account will be subject to constraints on capital distributions, including dividends and share repurchases and certain discretionary executive compensation, with the severity of the constraints depending on the extent of the shortfall and “eligible retained income” (that is, four quarter trailing net income, net of distributions and tax effects not reflected in net income), with progressively more stringent constraints on capital actions as the Company approaches the minimum ratios.

In April 2018, the Federal Reserve issued a proposed rule that would, among other things, replace the capital conservation buffer requirement with a stress capital buffer requirement for large bank holding companies subject to the Federal Reserve’s Comprehensive Capital Analysis and Review (“CCAR”). Please refer to the “Proposed Stress Buffer Requirements” section below for further details. Although the proposal, if adopted, would change the way in which the minimum ratios are calculated, firms would continue to be subject to progressively more stringent constraints on capital actions as they approach the minimum ratios.

United States banking organizations are also subject to a minimum tier 1 leverage ratio of 4.0 percent. Banking organizations subject to Category I, II or III standards under the Tailoring Rules, including the Company, are also subject to a minimum Supplementary Leverage Ratio (“SLR”) of 3.0 percent that takes into account both on-balance sheet and certain off-balance sheet exposures. At December 31, 2019, the Company exceeded the applicable minimum tier 1 leverage ratio and SLR requirements.

In December 2017, the Basel Committee finalized a package of revisions to the Basel III framework. The changes are meant to improve the calculation of risk-weighted assets (including by recalibrating risk weights and introducing new capital requirements for certain “unconditionally cancellable commitments,” including unused lines of credit) and improve the comparability of capital ratios by (i) enhancing the robustness and risk sensitivity of the standardized approaches for credit risk, credit valuation adjustment (“CVA”) risk and operational risk; (ii) constraining the use of the internal model approaches, by placing limits on certain inputs used to calculate capital requirements under the internal ratings-based (“IRB”) approach for credit risk and by removing the use of the internal model approaches for CVA risk and for operational risk; (iii) introducing a leverage ratio buffer to further limit the leverage of global systemically important banks (“G-SIBs”); and (iv) replacing the existing Basel II output floor with a more robust risk-sensitive floor based on the Committee’s revised Basel III standardized approaches. January 1, 2022, is the implementation date for the revised standardized approach for credit risk and leverage ratio, as well as the IRB, CVA, operational risk, and market risk frameworks. In January 2019, the Basel Committee published a revised market risk framework that, among other things, revises the standardized approach for market risk. The output floor will be subject to a transitional period beginning in January 1, 2022, with full implementation by January 1, 2027. Federal banking regulators are expected to undertake rulemakings in future years to implement these revisions in the United States.

In addition, in December 2018, the United States federal banking agencies finalized rules that provide banking organizations the option to phase-in over a three-year period, the day-one adverse effects on regulatory capital that may result from the adoption of the new current expected credit loss accounting rule (“CECL”). The Federal Reserve also released a statement indicating that it will not incorporate CECL into the calculation of the

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allowance for credit losses in supervisory stress tests through the 2021 stress test cycle. For further discussion of CECL, see Note 2 of the Notes to Consolidated Financial Statements in the 2019 Annual Report.

For additional information regarding the Company’s regulatory capital, see “Capital Management” in the 2019 Annual Report.

Prompt Corrective Action The Federal Deposit Insurance Corporation Improvement Act of 1991 (the “FDICIA”) provides a framework for regulation of depository institutions and their affiliates (including parent holding companies) by federal banking regulators. As part of that framework, the FDICIA requires the relevant federal banking regulator to take “prompt corrective action” with respect to an FDIC-insured depository institution, such as U.S. Bank National Association, if that institution does not meet certain capital adequacy standards. Supervisory actions by the appropriate federal banking regulator under the “prompt corrective action” rules generally depend upon an institution’s classification within five capital categories. An institution that fails to remain well-capitalized becomes subject to a series of restrictions that increase in severity as its capital condition weakens. Such restrictions may include a prohibition on capital distributions, restrictions on asset growth or restrictions on the ability to receive regulatory approval of applications. The FDICIA also provides for enhanced supervisory authority over undercapitalized institutions, including authority for the appointment of a conservator or receiver for the institution.

The regulations apply only to banks and not to bank holding companies such as the Company. However, the Federal Reserve is authorized to take appropriate action at the holding company level, based on the undercapitalized status of the holding company’s subsidiary banking institutions. In certain instances, relating to an undercapitalized banking institution, the bank holding company would be required to guarantee the performance of the undercapitalized subsidiary’s capital restoration plan and could be liable for civil money damages for failure to fulfill those guarantee commitments.

Brokered Deposits The FDICIA and FDIC regulations limit the ability of an insured depository institution, such as U.S. Bank National Association, to accept, renew or roll over brokered deposits unless the institution is well-capitalized under the prompt corrective action framework described above, or unless it is adequately capitalized and obtains a waiver from the FDIC. In addition, less than well-capitalized banks are subject to restrictions on the interest rates they may pay on deposits. In December 2019, the FDIC issued a proposed rule that is designed to bring the brokered deposits regulations in line with modern deposit taking methods and that may reduce the amount of deposits that would be classified as brokered. The impact on the Company and U.S. Bank National Association from any changes to the brokered deposit regulations will depend on the final form of the proposed rule, which the Company is not able to predict.

Comprehensive Capital Analysis and Review As required by the Federal Reserve’s CCAR rules, the Company submits a capital plan to the Federal Reserve on an annual basis. As part of the CCAR process, the Federal Reserve evaluates the Company’s plans to make capital distributions, including by repurchasing stock or making dividend payments, under a number of macroeconomic and Company-specific assumptions based on the Company’s and the Federal Reserve’s stress tests described under “Stress Testing” below. The Company may generally only pay dividends and repurchase stock in accordance with a capital plan that has been reviewed by the Federal Reserve and to which the Federal Reserve has not objected. These capital plans consist of a number of mandatory elements, including an assessment of a company’s sources and uses of capital over a nine-quarter planning horizon assuming both expected and stressful conditions; a detailed description of a company’s process for assessing capital adequacy; a demonstration of a company’s ability to maintain capital above each minimum regulatory capital ratio (without taking the buffers into account) under expected and stressful conditions.

The Company submitted its 2019 capital plan to the Federal Reserve in April 2019. The Federal Reserve did not object to the Company’s 2019 capital plan.

The Company will submit its 2020 capital plan to the Federal Reserve by April 5, 2020, in accordance with instructions from the Federal Reserve. Applicable stress testing rules require the Federal Reserve to publish the

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results of its assessment of the Company’s capital plan, including its planned capital distributions, no later than June 30, 2020.

In April 2018, the Federal Reserve issued a proposal to integrate its annual capital planning and stress testing requirements with certain ongoing regulatory capital requirements, which would make changes to capital planning and stress testing processes for bank holding companies subject to the proposed rule, including the Company. Please refer to the “Proposed Stress Buffer Requirements” section below for further details.

Stress Testing The Federal Reserve’s CCAR framework and the Dodd-Frank Act stress testing framework require bank holding companies subject to Category III standards such as the Company to conduct an annual internal stress test in connection with its annual capital plan submission as well as biennial company-run stress tests, and subject such bank holding companies to annual supervisory stress tests conducted by the Federal Reserve. Among other things, the company-run stress tests employ stress scenarios developed by the Company as well as stress scenarios provided by the Federal Reserve and incorporate the Dodd-Frank Act capital actions, which are intended to normalize capital distributions across large United States bank holding companies. The Federal Reserve conducts CCAR and Dodd-Frank Act supervisory stress tests employing stress scenarios and internal supervisory models. The Federal Reserve’s CCAR and Dodd-Frank Act supervisory stress tests incorporate the Company’s planned capital actions and the Dodd-Frank Act capital actions, respectively. The Federal Reserve and the Company are currently required to publish the results of the annual supervisory and biennial company-run stress tests, respectively, no later than June 30 of each applicable year. Under the Tailoring Rules, the Company is no longer required to conduct mid-cycle stress tests, and the Federal Reserve has eliminated the adverse scenario as a mandatory scenario.

In October 2019, the OCC adopted a final rule that aligned the stress testing requirements for national banks with requirements for their holding companies under the Tailoring Rules. Under the OCC’s rule, national banks with assets in excess of $250 billion, including U.S. Bank National Association, are required to submit company-run stress test results to the OCC concurrently with their parent bank holding company’s CCAR submission to the Federal Reserve. Accordingly, U.S. Bank National Association is now required to submit company-run stress tests on a biennial basis beginning with its 2020 submission. The stress test is based on the OCC’s stress scenarios (which are typically the same as the Federal Reserve’s stress scenarios, and which will no longer include “adverse” stress scenarios) and capital actions that are appropriate for the economic conditions assumed in each scenario. U.S. Bank National Association will submit its stress test in accordance with regulatory requirements by April 6, 2020. The Company is required to publish the results of this stress test no later than June 30, 2020.

Proposed Stress Buffer Requirements In April 2018, the Federal Reserve issued a proposal to create a single capital requirement by integrating its annual capital planning and stress testing requirements with certain ongoing regulatory capital requirements. The proposal, which would apply to certain bank holding companies, including the Company, would introduce a stress capital buffer and a stress leverage buffer, or stress buffer requirements, and related changes to the capital planning and stress testing processes. For risk-based capital requirements, the stress capital buffer would replace the static capital conservation buffer. The stress capital buffer would equal the greater of (i) the maximum decline in the Company’s common equity tier 1 capital ratio under the severely adverse scenario over the supervisory stress test measurement period, plus the sum of the ratios of the dollar amount of its planned common stock dividends to its projected risk-weighted assets for each of the fourth through seventh quarters of the supervisory stress test projection period, and (ii) 2.5 percent.

The proposal would make related changes to capital planning and stress testing processes for bank holding companies subject to the stress buffer requirements. In particular, the proposal would remove the 30 percent dividend payout ratio that has been used as a threshold for heightened supervisory scrutiny and would assume that bank holding companies maintain a constant level of assets and risk-weighted assets throughout the supervisory stress test projection period.

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Basel III Liquidity Requirements Bank holding companies and their domestic bank subsidiaries subject to Category I, II or III standards under the Tailoring Rules are subject to a minimum Liquidity Coverage Ratio (“LCR”). The LCR is designed to ensure that bank holding companies have sufficient high-quality liquid assets to survive a significant liquidity stress event lasting for 30 calendar days.

In June 2016, the federal banking regulators proposed a rule to implement the Net Stable Funding Ratio (“NSFR”). The NSFR is designed to promote stable, longer-term funding of assets and business activities over a one-year time horizon and would apply to the Company and U.S. Bank National Association. Federal banking regulators continue to work on finalizing the rule to implement the NSFR.

Under the Tailoring Rules, the Company and U.S. Bank National Association, as Category III banking organizations with less than $75 billion of weighted short-term wholesale funding, would qualify for reduced LCR requirements calibrated at 85 percent of the full requirements. In addition, although the Tailoring Rules did not adopt the proposed NSFR, the Federal Reserve indicated that it would apply a reduced, 85 percent NSFR to Category III banking organizations with less than $75 billion of weighted short-term wholesale funding, including the Company and U.S. Bank National Association.

Single-Counterparty Credit Limits In June 2018, the Federal Reserve issued a final rule regarding single-counterparty credit limits (“SCCL”) for large banking organizations, including the Company. Under these rules, the Company is subject to a limit of 25 percent of Tier 1 capital for aggregate net credit exposures to any other unaffiliated counterparty. The Company must comply with the final SCCL rules beginning on July 1, 2020.

Deposit Insurance The DIF provides insurance coverage for certain deposits, up to a standard maximum deposit insurance amount of $250,000 per depositor. Deposits at U.S. National Bank are insured up to the applicable limits. The DIF is funded through assessments on insured depository institutions, including U.S. Bank National Association, based on the risk each institution poses to the DIF. The FDIC may increase U.S. Bank National Association’s insurance premiums based on various factors, including the FDIC’s assessment of its risk profile.

In addition, large insured depository institutions, including U.S. Bank National Association, are subject to enhanced deposit account recordkeeping and related information technology system requirements meant to facilitate prompt payment of insured deposits if such an institution were to fail. U.S. Bank National Association must comply with these new requirements by April 1, 2020.

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

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

Orderly Liquidation Authority Upon the insolvency of a bank holding company, such as the Company, the FDIC may be appointed as conservator or receiver of the bank holding company if the Secretary of the Treasury

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determines (upon the written recommendation of the FDIC and the Federal Reserve and after consultation with the President of the United States) that certain conditions set forth in the Dodd-Frank Act regarding the potential impact on financial stability of the financial company’s failure have been met. FDIC rules set forth a comprehensive method for the receivership of a covered financial company. Acting as a conservator or receiver, the FDIC would have broad powers to transfer any assets or liabilities of a bank holding company without the approval of its creditors.

Resolution Plans The Company is required by the Federal Reserve and the FDIC to submit a periodic plan for the rapid and orderly resolution of the Company and its significant legal entities in the event of future material financial distress or failure. If the Federal Reserve and the FDIC jointly determine that the resolution plan is not credible and such deficiencies are not cured in a timely manner, the regulators may jointly impose on the Company more stringent capital, leverage or liquidity requirements or restrictions on the Company’s growth, activities or operations. If the Company were to fail to address the deficiencies in its resolution plan when required, it could eventually be required to divest certain assets or operations. In October 2019, the Federal Reserve and the FDIC adopted a final rule requiring banking organizations that are subject to Category III standards under the Tailoring Rules, including the Company, to submit resolution plans on a triennial cycle (alternating between targeted and full submissions). Under the Tailoring Rules, the Company’s next resolution plan (a targeted submission) is due by July 1, 2021.

In addition, U.S. Bank National Association is required to file periodically a separate resolution plan with the FDIC that should enable the FDIC, as receiver, to resolve the institution under applicable receivership provisions of the Federal Deposit Insurance Act in a manner that ensures that depositors receive access to their insured deposits within one business day of the institution’s failure, maximizes the net present value return from the sale or disposition of its assets and minimizes the amount of any loss to be realized by the institution’s creditors. In April 2019, the FDIC released an advance notice of proposed rulemaking regarding potential changes to its resolution planning requirements for insured depository institutions, including U.S. Bank National Association, and voted to delay the next round of resolution plan submissions until the rulemaking process is complete.

The public versions of the resolution plans previously submitted by the Company and U.S. Bank National Association are available on the FDIC’s website and, in the case of the Company’s resolution plans, also on the Federal Reserve’s website.

Recovery Plans The OCC has established enforceable guidelines for recovery planning by insured national banks with average total consolidated assets of $250 billion or more, including U.S. Bank National Association. The guidelines provide that a covered bank should develop and maintain a recovery plan that is appropriate for its individual risk profile, size, activities, and complexity, including the complexity of its organizational and legal entity structure. The guidelines state that a recovery plan should, among other elements, (i) establish triggers, which are quantitative or qualitative indicators of the risk or existence of severe stress that should always be escalated to management or the board of directors, as appropriate, for purposes of initiating a response; (ii) identify a wide range of credible options that a covered bank could undertake to restore financial and operational strength and viability; and (iii) address escalation procedures, management reports, and communication procedures. The board of U.S. Bank National Association approved a recovery plan pursuant to these guidelines in December 2019.

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

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Transactions with Affiliates There are various legal restrictions on the extent to which the Company and its non-bank subsidiaries may borrow or otherwise engage in certain types of transactions with U.S. Bank National Association or its subsidiaries. Under the Federal Reserve Act and the Federal Reserve’s Regulation W, U.S. Bank National Association and its subsidiaries are subject to quantitative and qualitative limits on extensions of credit (including credit exposure arising from repurchase and reverse repurchase agreements, securities borrowing and derivative transactions), purchases of assets, and certain other transactions with the Company or its other non-bank subsidiaries and affiliates. Additionally, transactions between U.S. Bank National Association or its subsidiaries, on the one hand, and the Company or its other non-bank subsidiaries and affiliates, on the other hand, are required to be on arm’s length terms. Transactions between U.S. Bank National Associations and its affiliates must be consistent with standards of safety and soundness.

Anti-Money Laundering and Sanctions The Company is subject to several federal laws that are designed to combat money laundering and terrorist financing, and to restrict transactions with persons, companies, or foreign governments sanctioned by United States authorities. This category of laws includes the Bank Secrecy Act (the “BSA”), the Money Laundering Control Act, the USA PATRIOT Act (collectively, “AML laws”), and implementing regulations for the International Emergency Economic Powers Act and the Trading with the Enemy Act, as administered by the United States Treasury Department’s Office of Foreign Assets Control (“sanctions laws”).

As implemented by federal banking and securities regulators and the Department of the Treasury, AML laws obligate depository institutions and broker-dealers to verify their customers’ identity, verify the identity of beneficial owners of legal entity customers, conduct customer due diligence, report on suspicious activity, file reports of transactions in currency, and conduct enhanced due diligence on certain accounts. Sanctions laws prohibit United States persons and certain foreign affiliates from engaging in any transaction with a restricted person or restricted country. Depository institutions and broker-dealers are required by their respective federal regulators to maintain policies and procedures in order to ensure compliance with the above obligations. Federal regulators regularly examine BSA/Anti-Money Laundering (“AML”) and sanctions compliance programs to ensure their adequacy and effectiveness, and the frequency and extent of such examinations and the remedial actions resulting therefrom have been increasing.

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

The OCC regularly assesses U.S. Bank National Association on its record in meeting the credit needs of the community served by that institution, including low- and moderate-income neighborhoods. CRA assessments also are considered by the Federal Reserve or OCC when reviewing applications by banking institutions to acquire, merge or consolidate with another banking institution or its holding company, to establish a new branch office that will accept deposits, or to relocate an office. In the case of a bank holding company applying for approval to acquire a bank or other bank holding company, the Federal Reserve will assess the CRA records of each subsidiary depository institution of the applicant bank holding company, and those records may be the basis for denying the application.

U.S. Bank National Association received a “Outstanding” CRA rating in its most recent examination, covering the period from January 1, 2012 through December 31, 2015.

In April 2018, the United States Department of Treasury issued a memorandum to the federal banking regulators with recommend changes to the CRA’s implementing regulations to reduce their complexity and associated burden on banks. Leaders of the federal banking agencies recently have indicated their support for

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revising the CRA regulatory framework, and in August 2018, the OCC issued an advance notice of proposed rulemaking to solicit ideas for building a new CRA framework. In response to the feedback received, in December 2019, the OCC and FDIC released a notice of proposed rulemaking to establish a new CRA framework. The framework would seek to expand the types of activity that qualify for CRA credit; revise how banks delineate their CRA assessment rates; and establish new standards for evaluating banks with more than $500 million in assets, including, the number of qualifying retail loan originations to low- and moderate-income individuals. The impact on U.S. Bank National Association from any changes to the CRA regulations will depend on the final form of the rule and how it is implemented.

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

Securities regulators impose capital requirements on USBII and monitor its financial operations with periodic financial reviews. In addition, USBII is a member of the Securities Investor Protection Corporation, which oversees the liquidation of member broker-dealers that close when the broker-dealer is bankrupt or in financial trouble and imposes reporting requirements and assessments on USBII.

In June 2019, the SEC issued a final rule, referred to as Regulation Best Interest, that imposes a new standard of conduct on SEC-registered broker-dealers when making recommendations to retail customers, and also issued an interpretation clarifying certain aspects of the fiduciary duty that an SEC-registered investment adviser owes to its clients. In addition, the SEC issued a final rule that requires broker-dealers and investment advisers to provide a standardized summary disclosure to retail customers describing their relationship with and services offered by the broker-dealer or investment adviser. [The final rule and interpretation did not cause a significant change in the practices of USBII.]

The operations of the First American family of funds, the Company’s proprietary money market fund complex, also are subject to regulation by the SEC, including rules requiring a floating net asset value for institutional prime and tax-free money market funds and permitting the board of directors of the money market funds the ability to limit redemptions during periods of stress (allowing for the use of liquidity fees and redemption gates during such times).

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

Regulation of Derivatives and the Swaps Marketplace Under the Dodd-Frank Act, U.S. Bank National Association, as a CFTC provisionally-registered swap dealer, is subject to rules regarding the regulation of the swaps marketplace and over-the-counter derivatives, including rules that require swap dealers and major swap participants to register with the CFTC, to meet robust business conduct standards to lower risk and promote market integrity, to meet certain recordkeeping and reporting requirements so that regulators can better monitor the markets, to centrally clear and trade swaps on regulated exchanges or execution facilities, and to be subject to certain capital and margin requirements.

In addition, the OCC has finalized a rule concerning swap margin and capital requirements for swap dealers regulated by the OCC. The final rule mandates the exchange of initial and variation margin for non-cleared swaps and non-cleared security-based swaps between swap entities regulated by the five agencies and certain counterparties. The amount of margin will vary based on the relative risk of the non-cleared swap or non-cleared security-based swap. The rules for variation margin requirements have become effective, and the rules for initial margin have become effective and will be fully phased-in on September 1, 2021, depending on the level of

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derivatives activity of the swap dealer and the relevant counterparty. In October 2019, the banking regulators proposed rules to conform their margin rules on inter-affiliate transactions to the CFTC’s margin rules, which generally exempt inter-affiliate transactions from initial margin requirements.

The Volcker Rule Section 13 of the BHC Act and its implementing regulations, commonly referred to as the “Volcker Rule,” prohibit banking entities from engaging in proprietary trading, and prohibits certain interests in, or relationships with, hedge funds or private equity funds. The Volcker Rule applies to the Company, U.S. Bank National Association and their affiliates. The Company has a Volcker Rule compliance program in place that covers all of its subsidiaries and affiliates, including U.S. Bank National Association.

In October 2019, the Volcker Rule regulators finalized amendments, effective on January 1, 2020, but with a required compliance date of January 1, 2021, to their regulations implementing the Volcker Rule, tailoring compliance requirements based on the size and scope of a banking entity’s trading activities and clarifying and amending certain definitions, requirements and exemptions. In addition, the Volcker Rule regulators have stated their intention to engage in further rulemaking with respect to provisions of the implementing regulations relating to covered funds. The Company is currently evaluating the potential impact of the amendments, and the ultimate impact of the amendments on the Company’s investing and trading activities will depend on, among other things, further rulemaking and guidance from the Volcker Rule regulators and the development of market practices and standards.

Data Privacy and Cybersecurity Federal and state law contains extensive consumer privacy protection provisions. The GLBA requires financial institutions to periodically disclose their privacy policies and practices relating to sharing such information and enables retail customers to opt out of the Company’s ability to share information with unaffiliated third parties under certain circumstances. Other federal and state laws and regulations impact the Company’s ability to share certain information with affiliates and non-affiliates for marketing and/or non-marketing purposes, or to contact customers with marketing offers. The GLBA also requires financial institutions to implement a comprehensive information security program that includes administrative, technical and physical safeguards to ensure the security and confidentiality of customer records and information. These security and privacy policies and procedures for the protection of personal and confidential information are in effect across all businesses and geographic locations. Federal law also makes it a criminal offense, except in limited circumstances, to obtain or attempt to obtain customer information of a financial nature by fraudulent or deceptive means.

Data privacy and data protection are areas of increasing state legislative focus, and several states have recently enacted consumer privacy laws that impose compliance obligations with respect to personal information. For example, in June 2018, the Governor of California signed into law the California Consumer Protection Act of 2018 (the “CCPA”). The CCPA, which became effective on January 1, 2020, applies to for-profit businesses that conduct business in California and meet certain revenue or data collection thresholds. The CCPA will give consumers the right to request disclosure of information collected about them, and whether that information has been sold or shared with others, the right to request deletion of personal information (subject to certain exceptions), the right to opt out of the sale of the consumer’s personal information, and the right not to be discriminated against for exercising these rights. The CCPA contains several exemptions, including an exemption applicable to information that is collected, processed, sold or disclosed pursuant to the GLBA. In October 2019, the California Attorney General proposed regulations to implement the CCPA. The Company has a physical footprint in California and will be required to comply with the CCPA and any final implementing regulations. In addition, similar laws may be adopted by other states where the Company does business. The Company has made and will make operational adjustments in accordance with the requirements of the CCPA and other state privacy laws. The federal government may also pass data privacy or data protection legislation. In addition, in the European Union (“EU”), privacy law is now governed by the General Data Protection Regulation (“GDPR”), which is directly binding and applicable for each EU member state since May 25, 2018. The GDPR contains enhanced compliance obligations and increased penalties for non-compliance compared to the prior law governing data privacy in the EU.

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Like other lenders, U.S. Bank National Association and other subsidiaries of the Company use credit bureau data in their underwriting activities. Use of such data is regulated under the Fair Credit Reporting Act (“FCRA”), and the FCRA also regulates reporting information to credit bureaus, prescreening individuals for credit offers, sharing of information between affiliates, and using affiliate data for marketing purposes. Similar state laws may impose additional requirements on the Company and its subsidiaries.

The federal banking regulators, as well as the SEC, CFTC, and related self-regulatory organizations, regularly issue guidance regarding cybersecurity that is intended to enhance cyber risk management among financial institutions. A financial institution is expected to establish lines of defense and to ensure that their risk management processes also address the risk posed by potential threats to the institution. A financial institution’s management is expected to maintain sufficient business continuity planning processes to ensure the rapid recovery, resumption and maintenance of the institution’s operations after a cyber-attack. A financial institution is also expected to develop appropriate processes to enable recovery of data and business operations if the institution or its critical service providers fall victim to a cyber-attack.

Consumer Protection Regulation U.S. Bank National Association’s retail banking activities are subject to a variety of statutes and regulations designed to protect consumers, including laws related to fair lending and the prohibition of unfair, deceptive, or abusive acts or practices in connection with the offer, sale, or provision of consumer financial products and services. These laws and regulations include the Truth-in-Lending, Truth-in-Savings, Home Mortgage Disclosure, Equal Credit Opportunity, Fair Credit Reporting, Fair Debt Collection Practices, Real Estate Settlement Procedures, Electronic Funds Transfer, Right to Financial Privacy and Servicemembers Civil Relief Acts. Interest and other charges collected or contracted for by banks are subject to state usury laws and federal laws concerning interest rates.

Consumer Financial Protection Bureau U.S. Bank National Association and its subsidiaries are subject to supervision and regulation by the CFPB with respect to federal consumer laws, including many of the consumer protection laws and regulations described above. The CFPB has undertaken numerous rule-making and other initiatives, including issuing informal guidance and taking enforcement actions against certain financial institutions. The CFPB’s rulemaking, examination and enforcement authority has affected and will continue to impact financial institutions involved in the provision of consumer financial products and services, including the Company, U.S. Bank National Association, and the Company’s other subsidiaries. These regulatory activities may limit the types of financial services and products the Company may offer, which in turn may reduce the Company’s revenues.

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

Website Access to SEC Reports

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

Additional Information

Additional information in response to this Item 1 can be found in the 2019 Annual Report on pages 58 to 62 under the heading “Line of Business Financial Review.” That information is incorporated into this report by reference.

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Item 1A. Risk Factors

Information in response to this Item 1A can be found in the 2019 Annual Report on pages 146 to 156 under the heading “Risk Factors.” That information is incorporated into this report by reference.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

U.S. Bancorp and its significant subsidiaries occupy headquarter offices under a long-term lease in Minneapolis, Minnesota. The Company also leases 7 freestanding operations centers in Cincinnati, Denver, Milwaukee, Minneapolis, Overland Park, Portland and St. Paul. The Company owns 9 principal operations centers in Cincinnati, Coeur d’Alene, Fargo, Milwaukee, Olathe, Owensboro, Portland, St. Louis and St. Paul. At December 31, 2019, the Company’s subsidiaries owned and operated a total of 1,459 facilities and leased an additional 1,954 facilities. The Company believes its current facilities are adequate to meet its needs. Additional information with respect to the Company’s premises and equipment is presented in Note 8 of the Notes to Consolidated Financial Statements included in the 2019 Annual Report. That information is incorporated into this report by reference.

Item 3. Legal Proceedings

Information in response to this Item 3 can be found in Note 22 of the Notes to Consolidated Financial Statements included in the 2019 Annual Report. That information is incorporated into this report by reference.

Item 4. Mine Safety Disclosures

Not Applicable.

Capital Covenants

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

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

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The following table identifies the closing date for each transaction, issuer, series of Capital Securities, Preferred Stock or Exchangeable Preferred Stock issued in the relevant transaction, Other Securities, if any, and applicable Covered Debt as of February 20, 2020, for those securities that remain outstanding.

Closing Date	Issuer	Capital Securities or Preferred Stock	Other Securities	Covered Debt
3/17/06	USB Capital IX and U.S. Bancorp	USB Capital IX’s $675,378,000 of 6.189% Fixed-to-Floating Rate Normal Income Trust Securities	U.S. Bancorp’s Series A Non-Cumulative Perpetual Preferred Stock	U.S. Bancorp’s 7.50% Subordinated Debentures due 2026 (CUSIP No. 911596AL8)
3/27/06	U.S. Bancorp	U.S. Bancorp’s 40,000,000 Depositary Shares ($25 per Depositary Share) each representing a 1/1000th interest in a share of Series B Non-Cumulative Perpetual Preferred Stock	Not Applicable	U.S. Bancorp’s 7.50% Subordinated Debentures due 2026 (CUSIP No. 911596AL8)
12/22/06	USB Realty Corp(a) and U.S. Bancorp	USB Realty Corp.’s 4,500 shares of Fixed-to-Floating-Rate Exchangeable Non-Cumulative Perpetual Series A Preferred Stock exchangeable for shares of U.S. Bancorp’s Series C Non-Cumulative Perpetual Preferred Stock(b)	Not Applicable	U.S. Bancorp’s 7.50% Subordinated Debentures due 2026 (CUSIP No. 911596AL8)

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

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

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

On June 27, 2019, the Company announced its Board of Directors had approved an authorization to repurchase up to $3.0 billion of its common stock, from July 1, 2019 through June 30, 2020. On November 12, 2019, the Company announced its Board of Directors had approved an additional authorization to repurchase up to $2.5 billion of its common stock through June 30, 2020, which is incremental to the $3.0 billion authorization. Except as otherwise indicated in the table below, all shares repurchased during the fourth quarter of 2019 were repurchased under these authorizations. The following table provides a detailed analysis of all shares repurchased by the Company or any affiliated purchaser during the fourth quarter of 2019:

Period	Total Number of Shares Purchased			Average Price Paid per Share			Total Number of Shares Purchased as Part of Publicly Announced Program		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (In  Millions)
October 1-31		9,517,417	(a)		$	56.45		9,442,417		$	1,672
November 1-30		11,887,044				59.25		11,887,044			3,468
December 1-31		17,717,490				59.99		17,717,490			2,405
Total		39,121,951	(a)		$	58.90		39,046,951		$	2,405

(a) Includes 75,000 shares of common stock purchased, at an average price per share of $55.20, in open-market transactions by U.S. Bank National Association in its capacity as trustee of the U.S. Bank 401(k) Savings Plan, which is the Company’s employee retirement savings plan.

Additional Information

Additional information in response to this Item 5 can be found in the 2019 Annual Report on page 143 under the heading “U.S. Bancorp Supplemental Financial Data (Unaudited).” That information is incorporated into this report by reference.

Item 6. Selected Financial Data

Information in response to this Item 6 can be found in the 2019 Annual Report on page 23 under the heading “Table 1 — Selected Financial Data.” That information is incorporated into this report by reference.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Information in response to this Item 7 can be found in the 2019 Annual Report on pages 22 to 66 under the heading “Management’s Discussion and Analysis.” That information is incorporated into this report by reference.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Information in response to this Item 7A can be found in the 2019 Annual Report on pages 36 to 56 under the heading “Corporate Risk Profile.” That information is incorporated into this report by reference.

Item 8. Financial Statements and Supplementary Data

Information in response to this Item 8 can be found in the 2019 Annual Report on pages 67 to 145 under the headings “Report of Management,” “Report of Independent Registered Public Accounting Firm,” “Report of

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Independent Registered Public Accounting Firm,” “U.S. Bancorp Consolidated Balance Sheet,” “U.S. Bancorp Consolidated Statement of Income,” “U.S. Bancorp Consolidated Statement of Comprehensive Income,” “U.S. Bancorp Consolidated Statement of Shareholders’ Equity,” “U.S. Bancorp Consolidated Statement of Cash Flows,” “Notes to Consolidated Financial Statements,” “U.S. Bancorp Consolidated Balance Sheet — Five Year Summary (Unaudited),” “U.S. Bancorp Consolidated Statement of Income — Five Year Summary (Unaudited),” “U.S. Bancorp Quarterly Consolidated Financial Data (Unaudited),” “U.S. Bancorp Supplemental Financial Data (Unaudited)” and “U.S. Bancorp Consolidated Daily Average Balance Sheet and Related Yields and Rates (Unaudited)”. That information is incorporated into this report by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Information in response to this Item 9A can be found in the 2019 Annual Report on page 66 under the heading “Controls and Procedures” and on pages 67 and 70 under the headings “Report of Management” and “Report of Independent Registered Public Accounting Firm.” That information is incorporated into this report by reference.

Item 9B. Other Information

None.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

Code of Ethics and Business Conduct

The Company has adopted a Code of Ethics and Business Conduct that applies to its principal executive officer, principal financial officer and principal accounting officer. The Company’s Code of Ethics and Business Conduct can be found at www.usbank.com by clicking on “About Us” and then clicking on “Investor Relations” and then clicking on “Corporate Governance” and then clicking on “Governance Documents” and then clicking on “Code of Ethics” and then clicking on “Code of Ethics and Business Conduct.” The Company intends to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding amendments to, or waivers from, certain provisions of the Code of Ethics and Business Conduct that apply to its principal executive officer, principal financial officer and principal accounting officer by posting such information on its website, at the address and location specified above.

Information About the Company’s Executive Officers

Andrew Cecere

Mr. Cecere is Chairman, President and Chief Executive Officer of U.S. Bancorp. Mr. Cecere, 59, has served as President of U.S. Bancorp since January 2016, Chief Executive Officer since April 2017 and Chairman since April 2018. He also served as Vice Chairman and Chief Operating Officer from January 2015 to January 2016 and was U.S. Bancorp’s Vice Chairman and Chief Financial Officer from February 2007 until January 2015. Until that time, he served as Vice Chairman, Wealth Management and Investment Services, of U.S. Bancorp since the merger of Firstar Corporation and U.S. Bancorp in February 2001. Previously, he had served as an executive officer of the former U.S. Bancorp, including as Chief Financial Officer from May 2000 through February 2001.

Ismat Aziz

Ms. Aziz is Senior Executive Vice President and Chief Human Resources Officer of U.S. Bancorp. Ms. Aziz, 52, has served in this position since joining U.S. Bancorp in September 2018. She served as Chief Human Resources Officer of Sprint Corporation from May 2016 until September 2018. Ms. Aziz served as the Chief Human Resources Officer of Sam’s Club from April 2012 to April 2016, and as the Senior Vice President of Business Capability and Human Resources of Sam’s Club from August 2010 to April 2012. Prior to that time, she served as the Vice President of Business Capability and Human Resources at Sears Canada from June 2009 to August 2010.

James L. Chosy

Mr. Chosy is Senior Executive Vice President and General Counsel of U.S. Bancorp. Mr. Chosy, 56, has served in this position since March 2013. He also served as Corporate Secretary of U.S. Bancorp from March 2013 until April 2016. From 2001 to 2013, he served as the General Counsel and Secretary of Piper Jaffray Companies. From 1995 to 2001, Mr. Chosy was Vice President and Associate General Counsel of U.S. Bancorp, having also served as Assistant Secretary of U.S. Bancorp from 1995 through 2000 and as Secretary from 2000 until 2001.

Terrance R. Dolan

Mr. Dolan is Vice Chair and Chief Financial Officer of U.S. Bancorp. Mr. Dolan, 58, has served in this position since August 2016. From July 2010 to July 2016, he served as Vice Chairman, Wealth Management and Investment Services, of U.S. Bancorp. From September 1998 to July 2010, Mr. Dolan served as U.S. Bancorp’s Controller. He additionally held the title of Executive Vice President from January 2002 until June 2010 and Senior Vice President from September 1998 until January 2002.

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Leslie V. Godridge

Ms. Godridge is Vice Chair, Corporate and Commercial Banking, of U.S. Bancorp. Ms. Godridge, 64, has served in this position since January 2016. From February 2013 until December 2015, she served as Executive Vice President, National Corporate Specialized Industries and Global Treasury Management, of U.S. Bancorp. From February 2007, when she joined U.S. Bancorp, until January 2013, Ms. Godridge served as Executive Vice President, National Corporate and Institutional Banking, of U.S. Bancorp. Prior to that time, she served as Senior Executive Vice President and a member of the Executive Committee at The Bank of New York, where she was head of BNY Asset Management, Private Banking, Consumer Banking and Regional Commercial Banking from 2004 to 2006. Ms. Godridge will retire from U.S. Bancorp on June 30, 2020.

Gunjan Kedia

Ms. Kedia is Vice Chair, Wealth Management and Investment Services, of U.S. Bancorp. Ms. Kedia, 49, has served in this position since joining U.S. Bancorp in December 2016. From October 2008 until May 2016, she served as Executive Vice President of State Street Corporation where she led the core investment servicing business in North and South America and served as a member of State Street’s management committee, its senior most strategy and policy committee. Previously, Ms. Kedia was an Executive Vice President of global product management at Bank of New York Mellon from 2004 to 2008.

James B. Kelligrew

Mr. Kelligrew is Vice Chair, Corporate and Commercial Banking, of U.S. Bancorp. Mr. Kelligrew, 54, has served in this position since January 2016. From March 2014 until December 2015, he served as Executive Vice President, Fixed Income and Capital Markets, of U.S. Bancorp, having served as Executive Vice President, Credit Fixed Income, of U.S. Bancorp from May 2009 to March 2014. Prior to that time, he held various leadership positions with Wells Fargo Securities from 2003 to 2009.

Shailesh M. Kotwal

Mr. Kotwal is Vice Chair, Payment Services, of U.S. Bancorp. Mr. Kotwal, 55, has served in this position since joining U.S. Bancorp in March 2015. From July 2008 until May 2014, he served as Executive Vice President of TD Bank Group with responsibility for retail banking products and services and as Chair of its enterprise payments council. From 2006 until 2008, he served as President, International, of eFunds Corporation. Previously, Mr. Kotwal served in various leadership roles at American Express Company from 1989 until 2006, including responsibility for operations in North and South America, Europe and the Asia-Pacific regions.

Katherine B. Quinn

Ms. Quinn is Vice Chair and Chief Administrative Officer of U.S. Bancorp. Ms. Quinn, 55, has served in this position since April 2017. From September 2013 to April 2017, she served as Executive Vice President and Chief Strategy and Reputation Officer of U.S. Bancorp and has served on U.S. Bancorp’s Managing Committee since January 2015. From September 2010 until January 2013, she served as Chief Marketing Officer of WellPoint, Inc. (now known as Anthem, Inc.), having served as Head of Corporate Marketing of WellPoint from July 2005 until September 2010.

Jodi L. Richard

Ms. Richard is Vice Chair and Chief Risk Officer of U.S. Bancorp. Ms. Richard, 51, has served in this position since October 2018. She served as Executive Vice President and Chief Operational Risk Officer of U.S. Bancorp from January 2018 until October 2018, having served as Senior Vice President and Chief Operational Risk Officer from 2014 until January 2018. Prior to that time, Ms. Richard held various senior leadership roles at

22

HSBC from 2003 until 2014, including Executive Vice President and Head of Operational Risk and Internal Control at HSBC North America from 2008 to 2014. Ms. Richard started her career at the Office of the Comptroller of the Currency in 1990 as a national bank examiner.

Mark G. Runkel

Mr. Runkel is Senior Executive Vice President and Chief Credit Officer of U.S. Bancorp. Mr. Runkel, 43, has served in this position since December 2013. From February 2011 until December 2013, he served as Senior Vice President and Credit Risk Group Manager of U.S. Bancorp Retail and Payment Services Credit Risk Management, having served as Senior Vice President and Risk Manager of U.S. Bancorp Retail and Small Business Credit Risk Management from June 2009 until February 2011. From March 2005 until May 2009, he served as Vice President and Risk Manager of U.S. Bancorp.

Jeffry H. von Gillern

Mr. von Gillern is Vice Chair, Technology and Operations Services, of U.S. Bancorp. Mr. von Gillern, 54, has served in this position since July 2010. From April 2001, when he joined U.S. Bancorp, until July 2010, Mr. von Gillern served as Executive Vice President of U.S. Bancorp, additionally serving as Chief Information Officer from July 2007 until July 2010.

Timothy A. Welsh

Mr. Welsh is Vice Chair, Consumer and Business Banking, of U.S. Bancorp. Mr. Welsh, 54, has served in this position since joining U.S. Bancorp in July 2017. From July 2006 until June 2017, he served as a Senior Partner at McKinsey & Company where he specialized in financial services and the consumer experience. Previously, Mr. Welsh served as a Partner at McKinsey & Company from 1999 to 2006.

Derek J. White

Mr. White is Vice Chair and Chief Digital Officer of U.S. Bancorp. Mr. White, 46, has served in this position since joining U.S. Bancorp in June 2019. He served as Global Head of Client Solutions of BBVA from March 2016 until April 2019. Prior to joining BBVA, Mr. White served in various senior leadership roles at Barclays Bank from 2005 to 2016, including as the Chief Design and Digital Officer from June 2013 to February 2016.

Additional Information

Additional information in response to this Item 10 can be found in the Proxy Statement under the headings “Other Matters — Delinquent Section 16(a) Reports,” “Proposal. 1 — Election of Directors,” “Corporate Governance — Committee Responsibilities” and “Corporate Governance — Committee Member Qualifications.” That information is incorporated into this report by reference.

Item 11. Executive Compensation

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

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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Equity Compensation Plan Information

The following table summarizes information regarding the Company’s equity compensation plans in effect as of December 31, 2019:

Plan Category	Number of Securities to be Issued upon Exercise of Outstanding  Options, Warrants and Rights			Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights			Number of Securities Remaining Available for Future Issuance under Equity  Compensation Plans (Excluding Securities Reflected in the First Column)
Equity Compensation Plans Approved by Security Holders								31,618,954	(3)
Stock Options		5,718,256	(1)		$	39.25
Restricted Stock Units and Performance-Based Restricted Stock Units		6,606,833	(2)			-
Equity Compensation Plans Not Approved by Security Holders		351,948	(4)			-		-
Total		12,677,037						31,618,954

(1) Includes shares of the Company’s common stock underlying stock options granted under the U.S. Bancorp 2015 Stock Incentive Plan (the “2015 Plan”) and the U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan (the “2007 Plan”).

(2) Includes shares of the Company’s common stock underlying performance-based restricted stock units (awarded to the members of the Company’s Managing Committee and settled in shares of the Company’s common stock on a one-for-one basis) and restricted stock units (settled in shares of the Company’s common stock on a one-for-one basis) under the 2015 Plan, the 2007 Plan and the U.S. Bancorp 2001 Stock Incentive Plan. No exercise price is paid upon vesting, and thus, no exercise price is included in the table.

(3) The 31,618,954 shares of the Company’s common stock available for future issuance are reserved under the 2015 Plan. Future awards under the 2015 Plan may be made in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalents, stock awards, or other stock-based awards.

(4) These shares of the Company’s common stock are issuable pursuant to various current and former deferred compensation plans of U.S. Bancorp and its predecessor entities. No exercise price is paid when shares are issued pursuant to the deferred compensation plans.

The deferred compensation plans allow non-employee directors and members of senior management to defer all or part of their compensation until the earlier of retirement or termination of employment. The deferred compensation is deemed to be invested in one of several investment alternatives at the option of the participant, including shares of U.S. Bancorp common stock. Deferred compensation deemed to be invested in U.S. Bancorp stock will be received in the form of shares of U.S. Bancorp common stock at the time of distribution, unless the Company chooses cash payment.

The 315,948 shares included in the table assume that participants in the plans whose deferred compensation had been deemed to be invested in the Company’s common stock had elected to receive all of that deferred compensation in shares of the Company’s common stock on December 31, 2019. The U.S. Bank Executive Employees Deferred Compensation Plan (2005 Statement) and the U.S. Bank Outside Directors Deferred Compensation Plan (2005 Statement) are the Company’s only deferred compensation plans under which compensation may currently be deferred.

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Additional Information

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

Item 13. Certain Relationships and Related Transactions, and Director Independence

Information in response to this Item 13 can be found in the Proxy Statement under the headings “Corporate Governance — Director Independence,” “Corporate Governance — Committee Member Qualifications” and “Certain Relationships and Related Transactions.” That information is incorporated into this report by reference.

Item 14. Principal Accounting Fees and Services

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

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PART IV

Item 15. Exhibits, Financial Statement Schedules

List of documents filed as part of this report

1. Financial Statements

• Report of Management

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

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

• U.S. Bancorp Consolidated Balance Sheet as of December 31, 2019 and 2018

• U.S. Bancorp Consolidated Statement of Income for each of the three years in the period ended December 31, 2019

• U.S. Bancorp Consolidated Statement of Comprehensive Income for each of the three years in the period ended December 31, 2019

• U.S. Bancorp Consolidated Statement of Shareholders’ Equity for each of the three years in the period ended December 31, 2019

• U.S. Bancorp Consolidated Statement of Cash Flows for each of the three years in the period ended December 31, 2019

• Notes to Consolidated Financial Statements

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

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

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

• U.S. Bancorp Supplemental Financial Data (Unaudited)

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

2. Financial Statement Schedules

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

3. Exhibits

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

Exhibit Number	Description
(1)3.1	Restated Certificate of Incorporation, as amended. Filed as Exhibit  3.1 to Form 10-Q for the quarterly period ended September 30, 2018.
(1)3.2	Amended and Restated Bylaws. Filed as Exhibit 3.1 to Form 8-K filed on January 20, 2016.
4.1	Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, copies of instruments defining the rights of holders of long-term debt are not filed. U.S. Bancorp agrees to furnish a copy thereof to the SEC upon request.

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Exhibit Number	Description
4.2	Description of U.S. Bancorp’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.
(1)(2)10.1(a)	U.S. Bancorp 2001 Stock Incentive Plan. Filed as Exhibit 10.1 to Form 10-K for the year ended December  31, 2001.
(1)(2)10.1(b)	Amendment No.  1 to U.S. Bancorp 2001 Stock Incentive Plan. Filed as Exhibit 10.2 to Form 10-K for the year ended December 31, 2002.
(1)(2)10.2	U.S. Bancorp Annual Executive Incentive Plan. Filed as Exhibit 10.1 to Form 8-K filed on January 16, 2019.
(1)(2)10.3	U.S. Bancorp Executive Deferral Plan, as amended. Filed as Exhibit 10.7 to Form 10-K for the year ended December 31, 1999.
(1)(2)10.4	Summary of Nonqualified Supplemental Executive Retirement Plan, as amended, of the former U.S. Bancorp. Filed as Exhibit 10.4 to Form 10-K for the year ended December 31, 2001.
(1)(2)10.5(a)	U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit 10.16 to Form 10-K for the year ended December 31, 2002.
(1)(2)10.5(b)	First, Second and Third Amendments of U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit 10.17 to Form 10-K for the year ended December 31, 2003.
(1)(2)10.5(c)	Fourth Amendment of U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit 10.1 to Form 8-K filed on December 23, 2004.
(1)(2)10.5(d)	Fifth Amendment of U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit 10.2 to Form 10-Q for the quarterly period ended March 31, 2005.
(1)(2)10.5(e)	Sixth Amendment of U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit  10.1 to Form 8-K filed on October 20, 2005.
(1)(2)10.5(f)	Seventh Amendment of U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit 10.1(g) to Form 8-K filed on January 7, 2009.
(1)(2)10.5(g)	Eighth Amendment of U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit 10.1(h) to Form 8-K filed on January 7, 2009.
(1)(2)10.5(h)	Ninth Amendment of U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit 10.1(i) to Form 8-K filed on January 7, 2009.
(1)(2)10.5(i)	Tenth Amendment of U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit 10.1(j) to Form 8-K filed on January 7, 2009.
(1)(2)10.5(j)	Eleventh Amendment of U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit 10.11(k) to Form 10-K for the year ended December 31, 2009.
(1)(2)10.5(k)	Twelfth Amendment of U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit 10.11(l) to Form 10-K for the year ended December 31, 2010.
(1)(2)10.5(l)	Thirteenth Amendment of U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit 10.6(l) to Form 10-K for the year ended December 31, 2013.
(1)(2)10.6(a)	U.S. Bancorp Executive Employees Deferred Compensation Plan. Filed as Exhibit 10.18 to Form 10-K for the year ended December 31, 2003.
(1)(2)10.6(b)	2011 Amendment of U.S. Bancorp Executive Employees Deferred Compensation Plan. Filed as Exhibit 10.9(b) to Form 10-K for the year ended December 31, 2011.

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Exhibit Number	Description
(1)(2)10.7(a)	U.S. Bancorp 2005 Executive Employees Deferred Compensation Plan. Filed as Exhibit 10.2 to Form 8-K filed on December 21, 2005.
(1)(2)10.7(b)	First Amendment of U.S. Bancorp 2005 Executive Employees Deferred Compensation Plan effective as of January  31, 2009. Filed as Exhibit 10.2(b) to Form 8-K filed on January 7, 2009.
(1)(2)10.7(c)	Second Amendment of U.S. Bancorp 2005 Executive Employees Deferred Compensation Plan effective as of January  1, 2010. Filed as Exhibit 10.13(c) to Form 10-K for the year ended December 31, 2010.
(1)(2)10.7(d)	Third Amendment of U.S. Bancorp 2005 Executive Employees Deferred Compensation Plan. Filed as Exhibit 10.10(d) to Form 10-K for the year ended December 31, 2011.
(1)(2)10.8(a)	U.S. Bancorp Outside Directors Deferred Compensation Plan. Filed as Exhibit 10.19 to Form 10-K for the year ended December 31, 2003.
(1)(2)10.8(b)	2011 Amendment of U.S. Bancorp Outside Directors Deferred Compensation Plan. Filed as Exhibit 10.11(b) to Form 10-K for the year ended December 31, 2011.
(1)(2)10.9(a)	U.S. Bancorp 2005 Outside Directors Deferred Compensation Plan. Filed as Exhibit 10.1 to Form 8-K filed on December 21, 2005.
(1)(2)10.9(b)	First Amendment of U.S. Bancorp 2005 Outside Directors Deferred Compensation Plan effective as of January  31, 2009. Filed as Exhibit 10.3(b) to Form 8-K filed on January 7, 2009.
(1)(2)10.9(c)	Second Amendment of U.S. Bancorp 2005 Outside Directors Deferred Compensation Plan. Filed as Exhibit 10.12(c) to Form 10-K for the year ended December 31, 2011.
(1)(2)10.10(a)	Form of Director Restricted Stock Unit Award Agreement under U.S. Bancorp 2001 Stock Incentive Plan. Filed as Exhibit 10.5 to Form 10-Q for the quarterly period ended September 30, 2004.
(1)(2)10.10(b)	Form of Amendment to Director Restricted Stock Unit Award Agreements under U.S. Bancorp 2001 Stock Incentive Plan dated as of December 31, 2008. Filed as Exhibit 10.5(b) to Form 8-K filed on January 7, 2009.
(1)(2)10.11	U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan. Filed as Exhibit 10.1 to Form 8-K filed on April 20, 2010.
(1)(2)10.12	Form of 2007 Non-Qualified Stock Option Agreement for Executive Officers under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan. Filed as Exhibit 10.2 to Form 8-K filed on April 18, 2007.
(1)(2)10.13	Form of Non-Qualified Stock Option Agreement for Executive Officers under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan to be used after December 31, 2008. Filed as Exhibit 10.8(a) to Form 8-K filed on January 7, 2009.
(1)(2)10.14	Form of Non-Qualified Stock Option Agreement for Executive Officers (as approved January  16, 2012) under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan. Filed as Exhibit 10.2 to Form 8-K filed on January 18, 2012.
(1)(2)10.15	Form of Non-Qualified Stock Option Agreement for Executive Officers (as approved November 14, 2012) under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan. Filed as Exhibit 10.2 to Form 8-K filed on November 19, 2012.
(1)(2)10.16	Form of Non-Qualified Stock Option Agreement for Executive Officers (as approved December 9, 2013) under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan. Filed as Exhibit 10.2 to Form 8-K filed on December 13, 2013.

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Exhibit Number	Description
(1)(2)10.17	Form of Non-Qualified Stock Option Agreement for Executive Officers under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan to be used after December 31, 2014. Filed as Exhibit 10.2 to Form 8-K filed on December 31, 2014.
(1)(2)10.18	Form of 2007 Restricted Stock Unit Award Agreement for Non-Employee Directors under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan. Filed as Exhibit 10.1 to Form 10-Q/A for the quarterly period ended September 30, 2007.
(1)(2)10.19	Form of Restricted Stock Unit Award Agreement for Non-Employee Directors under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan to be used after December 31, 2008. Filed as Exhibit 10.11(a) to Form 8-K filed on January 7, 2009.
(1)(2)10.20	Form of Restricted Stock Unit Award Agreement for Non-Employee Directors under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan to be used after December 31, 2013. Filed as Exhibit 10.37 to Form 10-K for the year ended December 31, 2013.
(1)(2)10.21	U.S. Bancorp 2015 Stock Incentive Plan. Filed as Exhibit 10.1 to Form 8-K filed on April 23, 2015.
(1)(2)10.22	Form of Stock Option Award Agreement for Executive Officers under U.S. Bancorp 2015 Stock Incentive Plan (in use for grants made through 2016). Filed as Exhibit 10.4 to Form 8-K filed on April 23, 2015.
(1)(2)10.23	Form of Stock Option Award Agreement for Executive Officers under U.S. Bancorp 2015 Stock Incentive Plan (used for grants made after January  1, 2017). Filed as Exhibit 10.44 to Form 10-K for the year ended December 31, 2016.
(1)(2)10.24	Form of Restricted Stock Unit Award Agreement for Non-Employee Directors under U.S. Bancorp 2015 Stock Incentive Plan (in use for grants made through 2016). Filed as Exhibit 10.2 to Form 8-K filed on April 23, 2015.
(1)(2)10.25	Form of Restricted Stock Unit Award Agreement for Non-Employee Directors under U.S. Bancorp 2015 Stock Incentive Plan (used for grants made after January 1, 2017). Filed as Exhibit 10.42 to Form 10-K for the year ended December 31, 2016.
(1)(2)10.26	Form of Performance Restricted Stock Unit Award Agreement for Executive Officers under U.S. Bancorp 2015 Stock Incentive Plan (in use for grants made through 2016). Filed as Exhibit 10.3 to Form 8-K filed on April 23, 2015.
(1)(2)10.27	Form of Performance Restricted Stock Unit Award Agreement for Executive Officers under U.S. Bancorp 2015 Stock Incentive Plan (used for grants made during 2017). Filed as Exhibit 10.43 to Form 10-K for the year ended December 31, 2016.
(1)(2)10.28	Form of Performance Restricted Stock Unit Award Agreement for Executive Officers under U.S. Bancorp 2015 Stock Incentive Plan (used for grants made during 2018). Filed as Exhibit 10.39 to Form 10-K for the year ended December 31, 2017.
(1)(2)10.29	Form of Performance Restricted Stock Unit Award Agreement for Executive Officers under U.S. Bancorp 2015 Stock Incentive Plan (used for grants made during 2019). Filed as Exhibit 10.34 to Form 10-K for the year ended December 31, 2018.
(1)(2)10.30	Form of Restricted Stock Unit Agreement used for December 2016 grant to Gunjan Kedia under U.S. Bancorp 2015 Stock Incentive Plan. Filed as Exhibit 10.41 to Form 10-K for the year ended December 31, 2016.
(1)(2)10.31	Form of Restricted Stock Unit Award Agreement for Executive Officers under U.S. Bancorp 2015 Stock Incentive Plan (used for grants made January  1, 2018 – June 30, 2018). Filed as Exhibit 10.40 to Form 10-K for the year ended December 31, 2017.

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Exhibit Number	Description
(1)(2)10.32	Form of Restricted Stock Unit Award Agreement for Executive Officers under U.S. Bancorp 2015 Stock Incentive Plan (used for grants made July  1, 2018 – December 31, 2019). Filed as Exhibit 10.1 to Form 10-Q for the quarterly period ended June 30, 2018.
(1)10.33	Deferred Prosecution Agreement, dated February  13, 2018, between U.S. Bancorp and the United States Attorney’s Office for the Southern District of New York. Filed as Exhibit 10.1 to Form 8-K filed on February 15, 2018.
(1)10.34	Stipulation and Order of Settlement and Dismissal, dated February  15, between U.S. Bank and the Financial Crimes Enforcement Network. Filed as Exhibit 10.3 to Form 8-K filed on February 15, 2018.
(1)10.35	Order to Cease and Desist and Order of Assessment of a Civil Money Penalty Issued Upon Consent Pursuant to the Federal Deposit Insurance Act, Amended, dated February 14, among U.S. Bancorp, USB Americas Holding Company and the Board of Governors of the Federal Reserve System. Filed as Exhibit 10.4 to Form 8-K filed on February 15, 2018.
(2)10.36	Form of Performance Restricted Stock Unit Award Agreement for Executive Officers under U.S. Bancorp Stock Incentive Plan (used for grants made after January 1, 2020).
(2)10.37	Form of Restricted Stock Unit Award Agreement for Executive Officers under U.S. Bancorp 2015 Stock Incentive Plan (used for grants made after January 1, 2020).
13	2019 Annual Report, pages 21 through 159.
21	Subsidiaries of the Registrant.
23	Consent of Ernst & Young LLP.
24	Power of Attorney.
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
104	The cover page of U.S. Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2019, formatted in Inline XBRL (included within the Exhibit 101 attachments).

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

(2) Management contracts or compensatory plans or arrangements.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on February 20, 2020, on its behalf by the undersigned, thereunto duly authorized.

U.S. BANCORP
By	/s/ ANDREW CECERE
	Andrew Cecere
	Chairman, President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on February 20, 2020, by the following persons on behalf of the registrant and in the capacities indicated.

Signature and Title

/s/ ANDREW CECERE

Andrew Cecere,

Chairman, President and Chief Executive Officer

(principal executive officer)

/s/ TERRANCE R. DOLAN

Terrance R. Dolan,

Vice Chair and Chief Financial Officer

(principal financial officer)

/s/ LISA R. STARK

Lisa R. Stark,

Executive Vice President and Controller

(principal accounting officer)

WARNER L. BAXTER*

Warner L. Baxter, Director

DOROTHY J. BRIDGES*

Dorothy J. Bridges, Director

ELIZABETH L. BUSE*

Elizabeth L. Buse, Director

MARC N. CASPER*

Mark N. Casper, Director

ARTHUR D. COLLINS, JR.*

Arthur D. Collins, Jr., Director

KIMBERLY J. HARRIS*

Kimberly J. Harris, Director

ROLAND A. HERNANDEZ*

Roland A. Hernandez, Director

DOREEN WOO HO*

Doreen Woo Ho, Director

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Signature and Title

OLIVIA F. KIRTLEY*

Olivia F. Kirtley, Director

KAREN S. LYNCH*

Karen S. Lynch, Director

RICHARD P. MCKENNEY*

Richard P. McKenney, Director

YUSUF I. MEHDI*

Yusuf I. Mehdi, Director

DAVID B. O’MALEY*

David B. O’Maley, Director

O’DELL M. OWENS, M.D., M.P.H.*

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

CRAIG D. SCHNUCK*

Craig D. Schnuck, Director

JOHN P. WIEHOFF*

John P. Wiehoff, Director

SCOTT W. WINE*

Scott W. Wine, Director

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

Dated: February 20, 2020

By:	/s/ ANDREW CECERE
	Andrew Cecere
	Attorney-In-Fact
	Chairman, President and Chief Executive Officer

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EX-4.2

Exhibit 4.2

DESCRIPTION OF THE REGISTRANT’S SECURITIES

REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES

EXCHANGE ACT OF 1934

U.S. Bancorp (“USB”) has registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (1) its common stock, (2) depositary shares representing shares of Series A preferred stock, (3) depositary shares representing shares of Series B preferred stock, (4) depositary shares representing shares of Series F preferred stock, (5) depositary shares representing shares of Series H preferred stock, (6) depositary shares representing shares of Series K preferred stock and (7) its 0.850% Medium-Term Notes, Series X (Senior), due June 7, 2024.

DESCRIPTION OF CAPITAL STOCK

The following description of the capital stock of USB and certain other matters does not purport to be complete and is subject, in all respects, to applicable Delaware law and to the provisions of the restated certificate of incorporation (the “Certificate of Incorporation”) and amended and restated bylaws (the “Bylaws”) of USB. The following description is qualified by reference to the Certificate of Incorporation, the certificate of designation for each series of preferred stock of USB and the Bylaws, copies of which are incorporated by reference as exhibits to USB’s Annual Report on Form 10-K.

Authorized Capital Stock

The authorized capital stock of USB consists of 4,000,000,000 shares of common stock, par value $0.01 per share (“Common Stock”), and 50,000,000 shares of preferred stock, par value $1.00 per share (“Preferred Stock”). As of December 31, 2019, there were 1,534,155,236 shares of Common Stock issued and outstanding and 209,510 shares of Preferred Stock issued and outstanding, of which:

• 12,510 represent shares of Series A Non-Cumulative Perpetual Preferred Stock (the “Series A Preferred Stock”);

• 40,000 represent shares of Series B Non-Cumulative Perpetual Preferred Stock (the “Series B Preferred Stock”);

• 44,000 represent shares of Series F Non-Cumulative Perpetual Preferred Stock (the “Series F Preferred Stock”);

• 20,000 represent shares of Series H Non-Cumulative Perpetual Preferred Stock (the “Series H Preferred Stock”);

• 30,000 represent shares of Series I Non-Cumulative Perpetual Preferred Stock (the “Series I Preferred Stock”);

• 40,000 represent shares of Series J Non-Cumulative Perpetual Preferred Stock (the “Series J Preferred Stock”); and

• 23,000 represent shares of Series K Non-Cumulative Perpetual Preferred Stock (the “Series K Preferred Stock”).

All outstanding shares of USB’s capital stock are fully paid and non-assessable.

Common Stock

Holders of shares of Common Stock are entitled to one vote per share. Unless a greater number of affirmative votes is required by the Certificate of Incorporation, the Bylaws, the rules or regulations of any stock exchange on which the Common Stock is traded, or as otherwise required by law or pursuant to any regulation applicable to USB, if a quorum exists at any meeting of stockholders, stockholders may take action on all matters, other than the election of directors, by a majority of the voting power of the stock present, in person or by proxy, at the meeting and entitled to vote on the matter. A nominee for director will be elected if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election; provided, however, that if USB’s board of directors determines that the number of nominees for director exceeds the number of directors to be elected at such meeting by the date that is 10 days prior to the date that USB first mails its notice of meeting for such meeting to the stockholders, each of the directors to be elected at such meeting will be elected by a plurality of the votes cast at such meeting assuming a quorum is present. Holders of shares of Common Stock do not have the right to cumulate their votes in the election of directors.

Subject to the prior or equal rights, if any, of any series of Preferred Stock outstanding, the holders of Common Stock are entitled to such dividends as may from time to time be declared by USB’s board of directors from any funds legally available for dividends. USB is subject to various general regulatory policies and requirements relating to the payment of dividends on its capital stock, including requirements to maintain adequate capital above regulatory minimums. The Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) is authorized to determine, under certain circumstances relating to the financial condition of a bank holding company, such as USB, that the payment of dividends would be an unsafe or unsound practice and to prohibit payment thereof. In addition, USB is subject to Delaware state laws relating to the payment of dividends.

Holders of shares of Common Stock do not have any preemptive right to purchase or subscribe for any additional securities of USB.

In the event of liquidation of USB, after the payment or provision for payment of all debts and liabilities and subject to the prior or equal rights, if any, of the Preferred Stock of any and all outstanding series, the holders of Common Stock will be entitled to share ratably in the remaining assets of USB. Shares of USB Common Stock are fully paid and non-assessable.

The Common Stock has no conversion rights.

The transfer agent and registrar for USB common stock is Computershare, Inc. USB’s Common Stock is listed on the NYSE under the symbol “USB.”

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Preferred Stock

General

USB’s board of directors or a duly authorized committee thereof has the authority, without further action by USB’s stockholders, unless action is required by applicable laws or regulations or by the terms of any Preferred Stock, to provide for the issuance of Preferred Stock in one or more series and to fix the voting rights, designations, preferences, and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, by adopting a resolution or resolutions creating and designating such series.

The rights of holders of Common Stock will be subject to, and may be adversely affected by, the rights of holders of any Preferred Stock. Any issuance of Preferred Stock may adversely affect the interests of holders of the Common Stock by limiting the control which such holders may exert by exercise of their voting rights, by subordinating their rights in liquidation to the rights of the holders of the Preferred Stock, and otherwise.

As of December 31, 2019, USB has authorized the following securities, which have been registered pursuant to Section 12 of the Exchange Act:

• 2,001,000 depositary shares representing, in the aggregate, 20,010 shares of Series A Preferred Stock, with a liquidation preference of $100,000 per share, of which 1,251,000 depositary shares and 12,510 shares of Series A Preferred Stock were outstanding;

• 40,000,000 depositary shares representing, in the aggregate, 40,000 shares of Series B Preferred Stock, with a liquidation preference of $25,000 per share, all of which were issued and outstanding;

• 44,000,000 depositary shares representing, in the aggregate, 44,000 shares of Series F Preferred Stock, with a liquidation preference of $25,000 per share, all of which were issued and outstanding;

• 20,000,000 depositary shares representing, in the aggregate, 20,000 shares of Series H Preferred Stock, with a liquidation preference of $25,000 per share, all of which were issued and outstanding; and

• 23,000,000 depositary shares representing, in the aggregate, 23,000 shares of Series K Preferred Stock, with a liquidation preference of $25,000 per share, all of which are issued and outstanding.

The Series I Preferred Stock and the Series J Preferred Stock described herein have not been registered pursuant to Section 12 of the Exchange Act.

Series A Preferred Stock

General — The depositary is the sole holder of the Series A Preferred Stock, as described below under the section entitled “—Description of Depositary Shares,” and all references herein to the holders of the Series A Preferred Stock mean the depositary. However, the holders of depositary shares will be entitled, through the depositary, to exercise the rights and preferences

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of the holders of the Series A Preferred Stock, as described below under “—Description of Depositary Shares.” The holders of the Series A Preferred Stock have no preemptive rights with respect to any shares of USB’s capital stock or any of its other securities convertible into or carrying rights or options to purchase any such capital stock.

The holders of Series A Preferred Stock will be entitled to receive non-cumulative cash dividends when, as and if declared out of assets legally available for payment of dividends. In the event USB does not declare dividends or does not pay dividends in full on the Series A Preferred Stock on any date on which dividends are due, then such unpaid dividends will not cumulate and will no longer accrue and be payable.

The Series A Preferred Stock is perpetual and will not be convertible into shares of USB’s Common Stock or any other class or series of USB’s capital stock, and will not be subject to any sinking fund or other obligation for their repurchase or retirement.

Rank — With respect to the payment of dividends and amounts upon liquidation, the Series A Preferred Stock ranks equally with the Series B Preferred Stock, the Series F Preferred Stock, the Series H Preferred Stock, the Series I Preferred Stock, the Series J Preferred Stock and the Series K Preferred Stock and with any future class or series of USB’s capital stock that ranks on a par with the Series A Preferred Stock in the payment of dividends and in the distribution of assets on USB’s liquidation, dissolution or winding up. Such capital stock is referred to as “Parity Stock.” With respect to the payment of dividends and amounts upon liquidation, the Series A Preferred Stock ranks senior to USB’s Common Stock and any other future class or series of USB’s capital stock over which the Series A Preferred Stock has preference or priority in the payment of dividends or in the distribution of assets on USB’s liquidation, dissolution or winding up. USB’s Common Stock and any such capital stock are referred to as “Junior Stock.” USB may not issue any class or series of capital stock having a preference or priority in the payment of dividends or in the distribution of assets on USB’s liquidation, dissolution or winding up over the Series A Preferred Stock without the affirmative vote or consent of the holders of at least 66-2/3% of all of the shares of the Series A Preferred Stock and all other Parity Stock, at the time outstanding, voting as a single class without regard to series.

In particular, during a dividend period (as defined below) and subject to certain exceptions, no dividend will be paid or declared and no distribution will be made on any Junior Stock, other than a dividend payable solely in Junior Stock, no shares of Junior Stock may be repurchased, redeemed or otherwise acquired for consideration by USB, directly or indirectly (other than as a result of reclassification of Junior Stock for or into Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock, and other than through the use of the proceeds of a substantially contemporaneous sale of other shares of Junior Stock), nor will any monies be paid to or made available for a sinking fund for the redemption of any such securities by USB, and no shares of Parity Stock may be purchased, redeemed or otherwise acquired for consideration by USB otherwise than pursuant to pro rata offers to purchase all, or a pro rata portion, of the Series A Preferred Stock and such Parity Stock except by conversion into or exchange for Junior Stock, unless full dividends for such dividend period on all outstanding shares of Series A Preferred Stock have been paid or declared and a sum sufficient for the payment thereof set aside.

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Dividends — Dividends on shares of the Series A Preferred Stock will not be mandatory. Holders of the Series A Preferred Stock will be entitled to receive, if, when and as declared by USB’s board of directors or a duly authorized committee of the board, out of assets legally available for the payment of dividends under Delaware law, non-cumulative cash dividends payable quarterly in arrears on each January 15, April 15, July 15 or October 15 (or, if such day is not a business day, the next business day). The period from and including the date of issuance of the Series A Preferred Stock or any dividend payment date to but excluding the next dividend payment date is referred to as a “dividend period.” Dividends on each share of Series A Preferred Stock will accrue on the liquidation preference amount of $100,000 per share at a rate per annum equal to the greater of (i) three-month LIBOR (computed as provided below) plus 1.02% or (ii) 3.50%. In the case that any date on which dividends are payable on the Series A Preferred Stock is not a business day, then payment of the dividend payable on that date will be made on the next succeeding day that is a business day. However, no interest or other payment will be paid in respect of the delay. The record date for payment of dividends on the Series A Preferred Stock will be the last day of the immediately preceding calendar month during which the dividend payment date falls. The amount of dividends payable for any dividend period will be calculated on the basis of a 360-day year and the number of days actually elapsed. For purposes of the Series A Preferred Stock, a “business day” means each Monday, Tuesday, Wednesday, Thursday or Friday on which banking institutions in Minneapolis, Minnesota, New York, New York or Wilmington, Delaware are not authorized or obligated by law, regulation or executive order to close.

For any dividend period, three-month LIBOR will be determined by the calculation agent on the second London Banking Day immediately preceding the first day of such dividend period in the following manner:

• Three-month LIBOR will be the rate (expressed as a percentage per annum) for deposits in U.S. dollars for a three-month period commencing on the first day of a dividend period that appears on Reuters Screen LIBOR01 Page as of 11:00 a.m. (London time) on the second London Banking Day preceding the first day of that dividend period.

• If the rate described above does not appear on Reuters Screen LIBOR01, three-month LIBOR will be determined on the basis of the rates at which deposits in U.S. dollars for a three-month period commencing on the first day of that dividend period and in a principal amount of not less than $1,000,000 are offered to prime banks in the London interbank market by four major banks in the London interbank market selected by USB, at approximately 11:00 a.m., London time, on the second London Banking Day preceding the first day of that dividend period. U.S. Bank National Association, as Calculation Agent for the Series A Preferred Stock, will request the principal London office of each of such banks to provide a quotation of its rate. If at least two such quotations are provided, three-month LIBOR with respect to that dividend period will be the arithmetic mean (rounded upward if necessary to the nearest .00001 of 1%) of such quotations.

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• If fewer than two quotations are provided, three-month LIBOR with respect to that dividend period will be the arithmetic mean (rounded upward if necessary to the nearest .00001 of 1%) of the rates quoted by three major banks in New York, New York, selected by the Calculation Agent, at approximately 11:00 a.m., New York City time, on the first day of that dividend period for loans in U.S. dollars to leading European banks for a three-month period commencing on the first day of that dividend period and in a principal amount of not less than $1,000,000.

• If the banks selected by the Calculation Agent to provide quotations are not quoting as described above, three-month LIBOR for that dividend period will be the same as three-month LIBOR as determined for the previous dividend period.

The calculation agent’s establishment of three-month LIBOR and calculation of the amount of dividends for each dividend period will be on file at USB’s principal offices, will be made available to any holder of Series A Preferred Stock upon request and will be final and binding in the absence of manifest error.

“London Banking Day” means any day on which commercial banks are open for general business (including dealings in deposits in U.S. dollars) in London.

“Reuters Screen LIBOR01 Page” means the display designated on the Reuters 3000 Xtra (or such other page as may replace that page on that service or such other service as may be nominated by the British Bankers’ Association for the purpose of displaying London interbank offered rates for U.S. dollar deposits).

The right of holders of the Series A Preferred Stock to receive dividends is non-cumulative. If USB’s board of directors does not declare a dividend on the Series A Preferred Stock or declares less than a full dividend in respect of any dividend period, the holders of the Series A Preferred Stock will have no right to receive any dividend or a full dividend, as the case may be, for that dividend period, and USB will have no obligation to pay a dividend or to pay full dividends for that dividend period, whether or not dividends are declared and paid for any future dividend period with respect to the Series A Preferred Stock, Parity Stock, Junior Stock or any other class or series of USB’s authorized Preferred Stock.

When dividends are not paid in full upon the Series A Preferred Stock and any other Parity Stock, dividends upon that stock will be declared on a proportional basis so that the amount of dividends declared per share will bear to each other the same ratio that accrued dividends for the current dividend period per share on the Series A Preferred Stock, and accrued dividends, including any accumulations on such Parity Stock, bear to each other. No interest will be payable in respect of any dividend payment on the Series A Preferred Stock that may be in arrears.

Redemption — The Series A Preferred Stock is not subject to any mandatory redemption, sinking fund or other similar provisions.

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So long as full dividends on all outstanding shares of the Series A Preferred Stock for the then-current dividend period have been paid or declared and a sum sufficient for the payment thereof is set aside, and subject to receipt of the regulatory approvals discussed below, USB may redeem the Series A Preferred Stock in whole or in part at any time, at a redemption price equal to $100,000 per share plus dividends that have been declared but not paid plus accrued and unpaid dividends for the then current dividend period to the redemption date.

If shares of the Series A Preferred Stock are to be redeemed, the notice of redemption will be given by first class mail to the holders of record of the Series A Preferred Stock to be redeemed, mailed not less than 30 days nor more than 60 days prior to the date fixed for redemption thereof (provided that, if the depositary shares representing the Series A Preferred Stock are held in book-entry form through DTC, USB may give such notice in any manner permitted by the DTC). Each notice of redemption will include a statement setting forth: (i) the redemption date, (ii) the number of shares of the Series A Preferred Stock to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder, (iii) the redemption price, (iv) the place or places where the certificates evidencing shares of Series A Preferred Stock are to be surrendered for payment of the redemption price and (v) that dividends on the shares to be redeemed will cease to accrue on the redemption date. If notice of redemption of any shares of Series A Preferred Stock has been duly given and if the funds necessary for such redemption have been set aside by USB for the benefit of the holders of any shares of Series A Preferred Stock so called for redemption, then, on and after the redemption date, dividends will cease to accrue on such shares of Series A Preferred Stock, such shares of Series A Preferred Stock will no longer be deemed outstanding and all rights of the holders of such shares will terminate, except the right to receive the redemption price.

In case of any redemption of only part of the shares of the Series A Preferred Stock at the time outstanding, the shares to be redeemed will be selected either pro rata or in such other manner as USB may determine to be fair and equitable.

Under the Federal Reserve Board’s risk-based capital guidelines applicable to bank holding companies, any redemption of the Series A Preferred Stock is subject to prior approval of the Federal Reserve Board.

Rights Upon Liquidation, Dissolution or Winding Up — In the event of USB’s liquidation, dissolution or winding up, the holders of the Series A Preferred Stock at the time outstanding will be entitled to receive a liquidating distribution in the amount of the liquidation preference of $100,000 per share, plus any authorized, declared and unpaid dividends for the then-current dividend period to the date of liquidation, out of USB’s assets legally available for distribution to USB’s stockholders, before any distribution is made to holders of USB’s Common Stock or any Junior Stock and subject to the rights of the holders of any class or series of securities ranking senior to or on parity with the Series A Preferred Stock upon liquidation and the rights of USB’s depositors and other creditors.

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If the amounts available for distribution upon USB’s liquidation, dissolution or winding up are not sufficient to satisfy the full liquidation rights of all the outstanding Series A Preferred Stock and all stock ranking equal to the Series A Preferred Stock, then the holders of each series of Preferred Stock will share ratably in any distribution of assets in proportion to the full respective preferential amount to which they are entitled. After the full amount of the liquidation preference is paid, the holders of Series A Preferred Stock will not be entitled to any further participation in any distribution of USB’s assets.

For such purposes, USB’s consolidation or merger with or into any other entity, the consolidation or merger of any other entity with or into USB, or the sale of all or substantially all of USB’s property or business will not be deemed to constitute USB’s liquidation, dissolution or winding up.

Voting — Except as provided below, the holders of the Series A Preferred Stock will have no voting rights.

Whenever dividends on any shares of the Series A Preferred Stock or any other class or series of Parity Stock have not been declared and paid for an amount equal to six or more quarterly dividend periods, whether consecutive or not (a “Nonpayment”), the holders of the Series A Preferred Stock (together with holders of any and all other classes of USB’s authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) will be entitled to vote as a single class for the election of a total of two additional members of USB’s board of directors (the “Preferred Directors”), provided that the election of any such directors will not cause USB to violate the corporate governance requirement of the New York Stock Exchange (or any other exchange on which USB’s securities may be listed) that listed companies must have a majority of independent directors and provided further that USB’s board of directors will at no time include more than two Preferred Directors. In that event, the number of directors on USB’s board of directors will automatically increase by two and, at the request of any holder of Series A Preferred Stock, a special meeting of the holders of Series A Preferred Stock and any other class or series of Preferred Stock that ranks on parity with the Series A Preferred Stock as to payment of dividends and for which dividends have not been paid, will be called for the election of the two directors (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of the stockholders, in which event such election will be held at such next annual or special meeting of stockholders), followed by such election at each subsequent annual meeting. These voting rights will continue until full dividends have been paid regularly on the shares of the Series A Preferred Stock and any other class or series of Preferred Stock that ranks on parity with the Series A Preferred Stock as to payment of dividends for at least four consecutive dividend periods following the Nonpayment.

If and when full dividends have been regularly paid for at least four consecutive dividend periods following a Nonpayment on the Series A Preferred Stock and any other class or series of Parity Stock, the holders of the Series A Preferred Stock will be divested of the foregoing voting rights (subject to revesting in the event of each subsequent Nonpayment) and the term of office of each Preferred Director so elected will terminate and the number of directors on USB’s board of directors will automatically decrease by two. Any Preferred Director may be removed at any time without cause by the holders of record of a majority of the outstanding shares of the Series A Preferred Stock (together with holders of any and all other classes of USB’s authorized

8

Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) when they have the voting rights described above. So long as a Nonpayment continues, any vacancy in the office of a Preferred Director (other than prior to the initial election of the Preferred Directors) may be filled by the written consent of the Preferred Director remaining in office, or if none remains in office, by a vote of the holders of the outstanding shares of Series A Preferred Stock (together with holders of any and all other class of USB’s authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) to serve until the next annual meeting of stockholders. The Preferred Directors will each be entitled to one vote per director on any matter.

If the holders of Series A Preferred Stock become entitled to vote for the election of directors, the Series A Preferred Stock may be considered a class of voting securities under interpretations adopted by the Federal Reserve Board. As a result, certain holders of the Series A Preferred Stock may become subject to regulations under the Bank Holding Company Act of 1956, as amended (the “Bank Holding Company Act”) and/or certain acquisitions of the Series A Preferred Stock may be subject to prior approval by the Federal Reserve Board.

So long as any shares of Series A Preferred Stock remain outstanding:

• the affirmative vote or consent of the holders of at least two-thirds of all of the shares of the Series A Preferred Stock and all other Parity Stock at the time outstanding, voting as a single class without regard to series, will be required to issue, authorize or increase the authorized amount of, or to issue or authorize any obligation or security convertible into or evidencing the right to purchase, any class or series of stock ranking senior to the Series A Preferred Stock and all other parity stock with respect to payment of dividends or the distribution of assets upon USB’s liquidation, dissolution or winding up; and

• the affirmative vote or consent of the holders of at least two-thirds of all of the shares of the Series A Preferred Stock at the time outstanding, voting separately as a class, will be required to amend the provisions of USB’s Certificate of Incorporation or the Certificate of Designations of the Series A Preferred Stock or any other series of Preferred Stock so as to materially and adversely affect the powers, preferences, privileges or rights of the Series A Preferred Stock, taken as a whole; provided, however, that any increase in the amount of the authorized or issued Series A Preferred Stock or authorized Preferred Stock or the creation and issuance, or an increase in the authorized or issued amount, of other series of Preferred Stock and/or Junior Stock will not be deemed to adversely affect the powers, preferences, privileges or rights of the Series A Preferred Stock.

The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required will be effected, all outstanding shares of Series A Preferred Stock have been redeemed or called for redemption upon proper notice and sufficient funds have been set aside by USB for the benefit of the holders of the Series A Preferred Stock to effect such redemption.

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Series B Preferred Stock

General — The depositary is the sole holder of the Series B Preferred Stock, as described below under the section entitled “—Description of Depositary Shares,” and all references herein to the holders of the Series B Preferred Stock mean the depositary. However, the holders of depositary shares will be entitled, through the depositary, to exercise the rights and preferences of the holders of the Series B Preferred Stock, as described below under “—Description of Depositary Shares.” The holders of the Series B Preferred Stock have no preemptive rights with respect to any shares of USB’s capital stock or any of its other securities convertible into or carrying rights or options to purchase any such capital stock.

The holders of Series B Preferred Stock will be entitled to receive non-cumulative cash dividends when, as and if declared out of assets legally available for payment of dividends. In the event USB does not declare dividends or does not pay dividends in full on the Series B Preferred Stock on any date on which dividends are due, then such unpaid dividends will not cumulate and will no longer accrue and be payable.

The Series B Preferred Stock is perpetual and will not be convertible into shares of USB’s Common Stock or any other class or series of USB’s capital stock, and will not be subject to any sinking fund or other obligation for their repurchase or retirement.

Rank — With respect to the payment of dividends and amounts upon liquidation, the Series B Preferred Stock ranks equally with the Series A Preferred Stock, the Series F Preferred Stock, the Series H Preferred Stock, the Series I Preferred Stock, the Series J Preferred Stock and the Series K Preferred Stock. and with any future class or series of USB’s capital stock that ranks on a par with the Series B Preferred Stock in the payment of dividends and in the distribution of assets on USB’s liquidation, dissolution or winding up. With respect to the payment of dividends and amounts upon liquidation, the Series B Preferred Stock ranks senior to USB’s Common Stock and any other future class or series of USB’s capital stock over which the Series B Preferred Stock has preference or priority in the payment of dividends or in the distribution of assets on USB’s liquidation, dissolution or winding up. USB may not issue any class of series of capital stock having a preference or priority in the payment of dividends or in the distribution of assets on USB’s liquidation, dissolution or winding up over the Series B Preferred Stock without the affirmative vote or consent of the holders of at least 66-2/3% of all of the shares of the Series B Preferred Stock and all other Parity Stock, at the time outstanding, voting as a single class without regard to series.

In particular, during a dividend period and subject to certain exceptions, no dividend will be paid or declared and no distribution will be made on any Junior Stock, other than a dividend payable solely in Junior Stock, no shares of Junior Stock may be repurchased, redeemed or otherwise acquired for consideration by USB, directly or indirectly (other than as a result of reclassification of Junior Stock for or into Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock, and other than through the use of the proceeds of a substantially contemporaneous sale of other shares of Junior Stock), nor will any monies be paid to or made available for a sinking fund for the redemption of any such securities by USB, and no shares of Parity Stock may be purchased, redeemed or otherwise

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acquired for consideration by USB otherwise than pursuant to pro rata offers to purchase all, or a pro rata portion, of the Series B Preferred Stock and such Parity Stock except by conversion into or exchange for Junior Stock, unless full dividends for such dividend period on all outstanding shares of Series B Preferred Stock have been paid or declared and a sum sufficient for the payment thereof set aside.

Dividends — Dividends on shares of the Series B Preferred Stock will not be mandatory. Holders of Series B Preferred Stock will be entitled to receive, when, as and if declared by USB’s board of directors or a duly authorized committee of the board, out of assets legally available for the payment of dividends under Delaware law, non-cumulative cash dividends payable quarterly in arrears on each January 15, April 15, July 15 or October 15 (or, if such day is not a business day, the next business day). Dividends on each share of Series B Preferred Stock will accrue on the liquidation preference amount of $25,000 per share at a rate per annum equal to the greater of (1) three-month LIBOR (computed as provided below) plus 0.60% or (2) 3.50%. In the case that any date on which dividends are payable on the Series B Preferred Stock is not a business day, then payment of the dividend payable on that date will be made on the next succeeding day that is a business day. However, no interest or other payment will be paid in respect of the delay. The record date for payment of dividends on the Series B Preferred Stock will be the last day of the immediately preceding calendar month during which the dividend payment date falls. The amount of dividends payable for any dividend period will be calculated on the basis of a 360-day year and the number of days actually elapsed. For purposes of the Series B Preferred Stock, the term “business day” means each Monday, Tuesday, Wednesday, Thursday or Friday on which banking institutions are not authorized or obligated by law, regulation or executive order to close in New York, New York.

For any dividend period, three-month LIBOR will be determined by the calculation agent on the second London Banking Day immediately preceding the first day of such dividend period in the following manner:

• Three-month LIBOR will be the offered rate per annum for three-month deposits in U.S. dollars, beginning on the first day of such period, as that rate appears on Moneyline Telerate Page 3750 as of 11:00 A.M., London time, on the second London Banking Day immediately preceding the first day of such dividend period.

• If the rate described above does not appear on Moneyline Telerate page 3750, three-month LIBOR will be determined on the basis of the rates, at approximately 11:00 A.M., London time, on the second London Banking Day immediately preceding the first day of such dividend period, at which deposits of the following kind are offered to prime banks in the London interbank market by four major banks in that market selected by USB: three-month deposits in U.S. dollars, beginning on the first day of such dividend period, and in a principal amount of not less than $1,000,000. The calculation agent will request the principal London office of each of these banks to provide a quotation of its rate. If at least two quotations are provided, three-month LIBOR for the second London Banking Day immediately preceding the first day of such dividend period will be the arithmetic mean of the quotations.

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• If fewer than two quotations are provided as described above, three-month LIBOR for the second London Banking Day immediately preceding the first day of such dividend period will be the arithmetic mean of the rates for loans of the following kind to leading European banks quoted, at approximately 11:00 A.M. New York City time on the second London Banking Day immediately preceding the first day of such dividend period, by three major banks in New York City selected by USB: three-month loans of U.S. dollars, beginning on the first day of such dividend period, and in a principal amount of not less than $1,000,000.

• If fewer than three banks selected by USB are quoting as described above, three-month LIBOR for the new dividend period will be three-month LIBOR in effect for the prior dividend period.

The calculation agent’s establishment of three-month LIBOR and calculation of the amount of dividends for each dividend period will be on file at USB’s principal offices, will be made available to any holder of Series B Preferred Stock upon request and will be final and binding in the absence of manifest error.

The term “Moneyline Telerate Page” means the display on Moneyline Telerate, Inc., or any successor service, on the page or pages referred to above or any replacement page or pages on that service.

The right of holders of the Series B Preferred Stock to receive dividends is non-cumulative. If USB’s board of directors does not declare a dividend on the Series B Preferred Stock or declares less than a full dividend in respect of any dividend period, the holders of the Series B Preferred Stock will have no right to receive any dividend or a full dividend, as the case may be, for that dividend period, and USB will have no obligation to pay a dividend or to pay full dividends for that dividend period, whether or not dividends are declared and paid for any future dividend period with respect to the Series B Preferred Stock, Parity Stock, Junior Stock or any other class or series of USB’s authorized Preferred Stock.

When dividends are not paid in full upon the Series B Preferred Stock and any other Parity Stock, dividends upon that stock will be declared on a proportional basis so that the amount of dividends declared per share will bear to each other the same ratio that accrued dividends for the current dividend period per share on the Series B Preferred Stock, and accrued dividends, including any accumulations on such Parity Stock, bear to each other. No interest will be payable in respect of any dividend payment on the Series B Preferred Stock that may be in arrears.

Redemption — The Series B Preferred Stock is not subject to any mandatory redemption, sinking fund or other similar provisions.

The Series B Preferred Stock will be redeemable at USB’s option, in whole or in part, at a redemption price equal to $25,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends.

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If shares of the Series B Preferred Stock are to be redeemed, the notice of redemption will be given by first class mail to the holders of record of the Series B Preferred Stock to be redeemed, mailed not less than 30 days nor more than 60 days prior to the date fixed for redemption thereof (provided that, if the depositary shares representing the Series B Preferred Stock are held in book-entry form through DTC, USB may give such notice in any manner permitted by the DTC). Each notice of redemption will include a statement setting forth: (i) the redemption date, (ii) the number of shares of the Series B Preferred Stock to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder, (iii) the redemption price, (iv) the place or places where the certificates evidencing shares of Series B Preferred Stock are to be surrendered for payment of the redemption price and (v) that dividends on the shares to be redeemed will cease to accrue on the redemption date. If notice of redemption of any shares of Series B Preferred Stock has been duly given and if the funds necessary for such redemption have been set aside by USB for the benefit of the holders of any shares of Series B Preferred Stock so called for redemption, then, on and after the redemption date, dividends will cease to accrue on such shares of Series B Preferred Stock, such shares of Series B Preferred Stock will no longer be deemed outstanding and all rights of the holders of such shares will terminate, except the right to receive the redemption price.

In case of any redemption of only part of the shares of the Series B Preferred Stock at the time outstanding, the shares to be redeemed will be selected either pro rata or in such other manner as USB may determine to be fair and equitable.

Under the Federal Reserve Board’s risk-based capital guidelines applicable to bank holding companies, any redemption of the Series B Preferred Stock is subject to prior approval of the Federal Reserve Board.

Additionally, the Series B Preferred Stock is subject to a “Replacement Capital Covenant,” which will limit USB’s right to redeem the Series B Preferred Stock. In the Replacement Capital Covenant, USB covenants to redeem or repurchase shares of Series B Preferred Stock only if and to the extent that (a) the total redemption or repurchase price is equal to or less than the sum, as of the date of redemption or repurchase, of (i) 133.33% of the aggregate net cash proceeds USB or its subsidiaries have received during the 180 days prior to such date from the issuance and sale of Common Stock plus (ii) 100% of the aggregate net cash proceeds USB or its subsidiaries have received during the 180 days prior to such date from the issuance of certain other specified securities that (A) have equity-like characteristics that satisfy the requirements of the Replacement Capital Covenant, which means generally that such other securities have characteristics that are the same as, or more equity-like than, the applicable characteristics of the Series B Preferred Stock at that time, and (B) qualify as tier 1 capital of USB under the risk-based capital guidelines of the Federal Reserve Board; and (b) USB has obtained the prior approval of the Federal Reserve Board, if such approval is then required by the Federal Reserve Board.

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Rights Upon Liquidation, Dissolution or Winding Up — In the event of USB’s liquidation, dissolution or winding up, the holders of the Series B Preferred Stock at the time outstanding will be entitled to receive a liquidating distribution in the amount of the liquidation preference of $25,000 per share, plus any authorized, declared and unpaid dividends for the then-current dividend period to the date of liquidation, out of USB’s assets legally available for distribution to USB’s stockholders, before any distribution is made to holders of USB’s Common Stock or any Junior Stock and subject to the rights of the holders of any class or series of securities ranking senior to or on parity with the Series B Preferred Stock upon liquidation and the rights of USB’s depositors and other creditors.

If the amounts available for distribution upon USB’s liquidation, dissolution or winding up are not sufficient to satisfy the full liquidation rights of all the outstanding Series B Preferred Stock and all stock ranking equal to the Series B Preferred Stock, then the holders of each series of Preferred Stock will share ratably in any distribution of assets in proportion to the full respective preferential amount to which they are entitled. After the full amount of the liquidation preference is paid, the holders of Series B Preferred Stock will not be entitled to any further participation in any distribution of USB’s assets.

For such purposes, USB’s consolidation or merger with or into any other entity, the consolidation or merger of any other entity with or into USB, or the sale of all or substantially all of USB’s property or business will not be deemed to constitute USB’s liquidation, dissolution or winding up.

Voting Rights — Except as provided below, the holders of the Series B Preferred Stock will have no voting rights.

Whenever dividends on any shares of the Series B Preferred Stock or any other class or series of Parity Stock have not been declared and paid for an amount equal to six or more quarterly dividend periods, whether consecutive or not, the holders of the Series B Preferred Stock (together with holders of any and all other classes of USB’s authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) will be entitled to vote as a single class for the election of a total of two additional members of USB’s board of directors, provided that the election of any such directors will not cause USB to violate the corporate governance requirement of the New York Stock Exchange (or any other exchange on which USB’s securities may be listed) that listed companies must have a majority of independent directors and provided further that USB’s board of directors will at no time include more than two Preferred Directors. In that event, the number of directors on USB’s board of directors will automatically increase by two and, at the request of any holder of Series B Preferred Stock, a special meeting of the holders of Series B Preferred Stock and any other class or series of Preferred Stock that ranks on parity with the Series B Preferred Stock as to payment of dividends and for which dividends have not been paid, will be called for the election of the two directors (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of the stockholders, in which event such election will be held at such next annual or special meeting of stockholders), followed by such election at each subsequent annual meeting. These voting rights will continue until full dividends have been paid regularly on the shares of the Series B Preferred Stock and any other class or series of Preferred Stock that ranks on parity with the Series B Preferred Stock as to payment of dividends for at least four consecutive dividend periods following the Nonpayment.

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If and when full dividends have been regularly paid for at least four consecutive dividend periods following a Nonpayment on the Series B Preferred Stock and any other class or series of Parity Stock, the holders of the Series B Preferred Stock will be divested of the foregoing voting rights (subject to revesting in the event of each subsequent Nonpayment) and the term of office of each Preferred Director so elected will terminate and the number of directors on USB’s board of directors will automatically decrease by two. Any Preferred Director may be removed at any time without cause by the holders of record of a majority of the outstanding shares of the Series B Preferred Stock (together with holders of any and all other classes of USB’s authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) when they have the voting rights described above. So long as a Nonpayment continues, any vacancy in the office of a Preferred Director (other than prior to the initial election of the Preferred Directors) may be filled by the written consent of the Preferred Director remaining in office, or if none remains in office, by a vote of the holders of the outstanding shares of Series B Preferred Stock (together with holders of any and all other class of USB’s authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) to serve until the next annual meeting of stockholders. The Preferred Directors will each be entitled to one vote per director on any matter.

If the holders of Series B Preferred Stock become entitled to vote for the election of directors, the Series B Preferred Stock may be considered a class of voting securities under interpretations adopted by the Federal Reserve Board. As a result, certain holders of the Series B Preferred Stock may become subject to regulations under the Bank Holding Company Act and/or certain acquisitions of the Series B Preferred Stock may be subject to prior approval by the Federal Reserve Board.

So long as any shares of Series B Preferred Stock remain outstanding:

• the affirmative vote or consent of the holders of at least two-thirds of all of the shares of the Series B Preferred Stock and all other Parity Stock at the time outstanding, voting as a single class without regard to series, will be required to issue, authorize or increase the authorized amount of, or to issue or authorize any obligation or security convertible into or evidencing the right to purchase, any class or series of stock ranking senior to the Series B Preferred Stock and all other parity stock with respect to payment of dividends or the distribution of assets upon USB’s liquidation, dissolution or winding up; and

• the affirmative vote or consent of the holders of at least two-thirds of all of the shares of the Series B Preferred Stock at the time outstanding, voting separately as a class, will be required to amend the provisions of USB’s Certificate of Incorporation or the Certificate of Designations of the Series B Preferred Stock or any other series of Preferred Stock so as to materially and adversely affect the powers, preferences, privileges or rights of the Series B Preferred Stock, taken as a whole; provided, however, that any increase in the amount of the authorized or issued Series B Preferred Stock or authorized Preferred Stock or the creation and issuance, or an increase in the authorized or issued amount, of other series of Preferred Stock and/or Junior Stock will not be deemed to adversely affect the powers, preferences, privileges or rights of the Series B Preferred Stock.

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The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required will be effected, all outstanding shares of Series B Preferred Stock have been redeemed or called for redemption upon proper notice and sufficient funds have been set aside by USB for the benefit of the holders of the Series B Preferred Stock to effect such redemption.

Series F Preferred Stock

General — The depositary is the sole holder of the Series F Preferred Stock, as described below under the section entitled “—Description of Depositary Shares,” and all references herein to the holders of the Series F Preferred Stock mean the depositary. However, the holders of depositary shares will be entitled, through the depositary, to exercise the rights and preferences of the holders of the Series F Preferred Stock, as described below under “—Description of Depositary Shares.” The holders of the Series F Preferred Stock have no preemptive rights with respect to any shares of USB’s capital stock or any of its other securities convertible into or carrying rights or options to purchase any such capital stock.

The holders of Series F Preferred Stock will be entitled to receive non-cumulative cash dividends when, as and if declared out of assets legally available for payment of dividends. In the event USB does not declare dividends or does not pay dividends in full on the Series F Preferred Stock on any date on which dividends are due, then such unpaid dividends will not cumulate and will no longer accrue and be payable.

The Series F Preferred Stock is perpetual and will not be convertible into shares of USB’s Common Stock or any other class or series of USB’s capital stock, and will not be subject to any sinking fund or other obligation for their repurchase or retirement.

Rank — With respect to the payment of dividends and amounts upon liquidation, the Series F Preferred Stock ranks equally with the Series A Preferred Stock, the Series B Preferred Stock, the Series H Preferred Stock, the Series I Preferred Stock, the Series J Preferred Stock and the Series K Preferred Stock. and with any future class or series of USB’s capital stock that ranks on a par with the Series F Preferred Stock in the payment of dividends and in the distribution of assets on USB’s liquidation, dissolution or winding up. With respect to the payment of dividends and amounts upon liquidation, the Series F Preferred Stock ranks senior to USB’s Common Stock and any other future class or series of USB’s capital stock over which the Series F Preferred Stock has preference or priority in the payment of dividends or in the distribution of assets on USB’s liquidation, dissolution or winding up. USB may not issue any class of series of capital stock having a preference or priority in the payment of dividends or in the distribution of assets on USB’s liquidation, dissolution or winding up over the Series F Preferred Stock without the affirmative vote or consent of the holders of at least 66-2/3% of all of the shares of the Series F Preferred Stock and all other Parity Stock, at the time outstanding, voting as a single class without regard to series.

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In particular, during a dividend period and subject to certain exceptions, no dividend will be paid or declared and no distribution will be made on any Junior Stock, other than a dividend payable solely in Junior Stock, no shares of Junior Stock may be repurchased, redeemed or otherwise acquired for consideration by USB, directly or indirectly (other than as a result of reclassification of Junior Stock for or into Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock, and other than through the use of the proceeds of a substantially contemporaneous sale of other shares of Junior Stock), nor will any monies be paid to or made available for a sinking fund for the redemption of any such securities by USB, and no shares of Parity Stock may be purchased, redeemed or otherwise acquired for consideration by USB otherwise than pursuant to pro rata offers to purchase all, or a pro rata portion, of the Series F Preferred Stock and such Parity Stock except by conversion into or exchange for Junior Stock, unless full dividends for such dividend period on all outstanding shares of Series F Preferred Stock have been paid or declared and a sum sufficient for the payment thereof set aside.

Dividends — Dividends on shares of the Series F Preferred Stock will not be mandatory. Holders of Series F Preferred Stock will be entitled to receive, when, as and if declared by USB’s board of directors or a duly authorized committee of the board, out of assets legally available for the payment of dividends under Delaware law, non-cumulative cash dividends payable quarterly in arrears on each January 15, April 15, July 15 or October 15 (or, if such day is not a business day, the next business day). Dividends on each share of Series F Preferred Stock will accrue on the liquidation preference amount of $25,000 per share (1) from the date of issuance of the Series F Preferred Stock to but excluding January 15, 2022 at a rate per annum equal to 6.50% and (2) thereafter for each related dividend period at a rate per annum equal to three-month LIBOR (computed as provided below) plus 4.468%. In the case that any date on which dividends are payable on the Series F Preferred Stock is not a business day, then payment of the dividend payable on that date will be made on the next succeeding day that is a business day. However, no interest or other payment will be paid in respect of the delay. The record date for payment of dividends on the Series F Preferred Stock will be the last day of the immediately preceding calendar month during which the dividend payment date falls. The amount of dividends payable for any dividend period prior to January 15, 2022 will be computed on the basis of a 360-day year consisting of twelve 30-day months and dividends for dividend periods thereafter will be computed on the basis of a 360-day year and the actual number of days elapsed. For purposes of the Series F Preferred Stock, the term “business day” means each Monday, Tuesday, Wednesday, Thursday or Friday on which banking institutions are not authorized or obligated by law, regulation or executive order to close in New York, New York. Dividends on the Series F Preferred Stock will not be declared, paid or set aside for payment to the extent such act would cause USB to fail to comply with any applicable laws and regulations, including applicable capital adequacy guidelines.

For any dividend period beginning on or after January 15, 2022, three-month LIBOR will be determined by the calculation agent on the second London Banking Day immediately preceding the first day of such dividend period in the following manner:

• Three-month LIBOR will be the offered rate per annum for three-month deposits in U.S. dollars, beginning on the first day of such period, as that rate appears on Reuters Screen LIBOR01 as of 11:00 A.M., London time, on the second London Banking Day immediately preceding the first day of such dividend period.

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• If the rate described above does not appear on Reuters Screen LIBOR01 Page, three-month LIBOR will be determined on the basis of the rates at which deposits in U.S. dollars for a three-month period commencing on the first day of that dividend period and in a principal amount of not less than $1,000,000 are offered to prime banks in the London interbank market by four major banks in the London interbank market selected by USB, at approximately 11:00 a.m. (London time), on the second London banking day preceding the first day of that dividend period. The calculation agent will request the principal London office of each of such banks to provide a quotation of its rate. If at least two such quotations are provided, three-month LIBOR with respect to that dividend period will be the arithmetic mean of such quotations.

• If fewer than two quotations are provided as described above, three-month LIBOR will be the arithmetic mean of the rates quoted by three major banks in New York, New York, selected by the calculation agent, at approximately 11:00 a.m. (New York City time), on the first day of that dividend period for loans in U.S. dollars to leading European banks for a three-month period commencing on the first day of that dividend period and in a principal amount of not less than $1,000,000.

• If fewer than three banks are not quoting as described above, three-month LIBOR for the new dividend period will be three-month LIBOR in effect for the prior dividend period or, in the case of the first dividend period beginning on or after January 15, 2022, the most recent rate that could have been determined had the dividend rate been a floating rate during the period prior to January 15, 2022.

The calculation agent’s establishment of three-month LIBOR and calculation of the amount of dividends for each dividend period will be on file at USB’s principal offices, will be made available to any holder of Series F Preferred Stock upon request and will be final and binding in the absence of manifest error.

The term “Reuters Screen LIBOR01 Page” means the display designated on the Reuters 3000 Xtra (or such other page as may replace that page on that service or such other service as may be nominated by the British Bankers’ Association for the purpose of displaying London interbank offered rates for U.S. dollar deposits).

The right of holders of the Series F Preferred Stock to receive dividends is non-cumulative. If USB’s board of directors does not declare a dividend on the Series F Preferred Stock or declares less than a full dividend in respect of any dividend period, the holders of the Series F Preferred Stock will have no right to receive any dividend or a full dividend, as the case may be, for that dividend period, and USB will have no obligation to pay a dividend or to pay full dividends for that dividend period, whether or not dividends are declared and paid for any future dividend period with respect to the Series F Preferred Stock, Parity Stock, Junior Stock or any other class or series of USB’s authorized Preferred Stock.

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When dividends are not paid in full upon the Series F Preferred Stock and any other Parity Stock, dividends upon that stock will be declared on a proportional basis so that the amount of dividends declared per share will bear to each other the same ratio that accrued dividends for the current dividend period per share on the Series F Preferred Stock, and accrued dividends, including any accumulations on such Parity Stock, bear to each other. No interest will be payable in respect of any dividend payment on the Series F Preferred Stock that may be in arrears.

Redemption — The Series F Preferred Stock is not subject to any mandatory redemption, sinking fund or other similar provisions.

The Series F Preferred Stock will be redeemable at USB’s option, in whole or in part, at any time on or after the dividend payment date in January 2022 at a redemption price equal to $25,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends.

In addition, within 90 days following the occurrence of a Regulatory Capital Treatment Event (as defined below), USB, at its option, subject to the approval of the Appropriate Federal Banking Agency (as defined below), may redeem, at any time, all (but not less than all) of the shares of Series F Preferred Stock at the time outstanding, at a redemption price equal to $25,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends. For purposes of the Series F Preferred Stock, “Regulatory Capital Treatment Event” means the good faith determination by USB that, as a result of (i) any amendment to, or change in, the laws or regulations of the United States or any political subdivision of or in the United States that is enacted or becomes effective after the initial issuance of any share of Series F Preferred Stock, (ii) any proposed change in those laws or regulations that is announced after the initial issuance of any share of Series F Preferred Stock, or (iii) any official administrative decision or judicial decision or administrative action or other official pronouncement interpreting or applying those laws or regulations that is announced after the initial issuance of any share of Series F Preferred Stock, there is more than an insubstantial risk that USB will not be entitled to treat the full liquidation value of the shares of Series F Preferred Stock then outstanding as “tier 1 capital” (or its equivalent) for purposes of the capital adequacy guidelines of the Federal Reserve Board, Regulation Y, 12 CFR 225 (or, as and if applicable, the capital adequacy guidelines or regulations of any successor Appropriate Federal Banking Agency), as then in effect and applicable, for as long as any share of Series F Preferred Stock is outstanding. “Appropriate Federal Banking Agency” means the “appropriate Federal banking agency” with respect to USB as defined in Section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. Section 1813(q)), or any successor provision.

If shares of the Series F Preferred Stock are to be redeemed, the notice of redemption will be given by first class mail to the holders of record of the Series F Preferred Stock to be redeemed, mailed not less than 30 days nor more than 60 days prior to the date fixed for redemption thereof (provided that, if the depositary shares representing the Series F Preferred Stock are held in book-entry form through DTC, USB may give such notice in any manner permitted by the DTC). Each notice of redemption will include a statement setting forth: (i) the redemption date, (ii) the number of shares of the Series F Preferred Stock to be redeemed and, if

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less than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder, (iii) the redemption price, (iv) the place or places where the certificates evidencing shares of Series F Preferred Stock are to be surrendered for payment of the redemption price and (v) that dividends on the shares to be redeemed will cease to accrue on the redemption date. If notice of redemption of any shares of Series F Preferred Stock has been duly given and if the funds necessary for such redemption have been set aside by USB for the benefit of the holders of any shares of Series F Preferred Stock so called for redemption, then, on and after the redemption date, dividends will cease to accrue on such shares of Series F Preferred Stock, such shares of Series F Preferred Stock will no longer be deemed outstanding and all rights of the holders of such shares will terminate, except the right to receive the redemption price.

In case of any redemption of only part of the shares of the Series F Preferred Stock at the time outstanding, the shares to be redeemed will be selected either pro rata or in such other manner as USB may determine to be fair and equitable.

Under the Federal Reserve Board’s risk-based capital guidelines applicable to bank holding companies, any redemption of the Series F Preferred Stock is subject to prior approval of the Federal Reserve Board.

Rights Upon Liquidation, Dissolution or Winding Up — In the event of USB’s liquidation, dissolution or winding up, the holders of the Series F Preferred Stock at the time outstanding will be entitled to receive a liquidating distribution in the amount of the liquidation preference of $25,000 per share, plus any authorized, declared and unpaid dividends for the then-current dividend period to the date of liquidation, out of USB’s assets legally available for distribution to USB’s stockholders, before any distribution is made to holders of USB’s Common Stock or any Junior Stock and subject to the rights of the holders of any class or series of securities ranking senior to or on parity with the Series F Preferred Stock upon liquidation and the rights of USB’s depositors and other creditors.

If the amounts available for distribution upon USB’s liquidation, dissolution or winding up are not sufficient to satisfy the full liquidation rights of all the outstanding Series F Preferred Stock and all stock ranking equal to the Series F Preferred Stock, then the holders of each series of Preferred Stock will share ratably in any distribution of assets in proportion to the full respective preferential amount to which they are entitled. After the full amount of the liquidation preference is paid, the holders of Series F Preferred Stock will not be entitled to any further participation in any distribution of USB’s assets.

For such purposes, USB’s consolidation or merger with or into any other entity, the consolidation or merger of any other entity with or into USB, or the sale of all or substantially all of USB’s property or business will not be deemed to constitute USB’s liquidation, dissolution or winding up.

Voting Rights — Except as provided below, the holders of the Series F Preferred Stock will have no voting rights.

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Whenever dividends on any shares of the Series F Preferred Stock or any other class or series of Parity Stock have not been declared and paid for an amount equal to six or more quarterly dividend periods, whether consecutive or not, the holders of the Series F Preferred Stock (together with holders of any and all other classes of USB’s authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) will be entitled to vote as a single class for the election of a total of two additional members of USB’s board of directors, provided that the election of any such directors will not cause USB to violate the corporate governance requirement of the New York Stock Exchange (or any other exchange on which USB’s securities may be listed) that listed companies must have a majority of independent directors and provided further that USB’s board of directors will at no time include more than two Preferred Directors. In that event, the number of directors on USB’s board of directors will automatically increase by two and, at the request of any holder of Series F Preferred Stock, a special meeting of the holders of Series F Preferred Stock and any other class or series of Preferred Stock that ranks on parity with the Series F Preferred Stock as to payment of dividends and for which dividends have not been paid, will be called for the election of the two directors (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of the stockholders, in which event such election will be held at such next annual or special meeting of stockholders), followed by such election at each subsequent annual meeting. These voting rights will continue until full dividends have been paid regularly on the shares of the Series F Preferred Stock and any other class or series of Preferred Stock that ranks on parity with the Series F Preferred Stock as to payment of dividends for at least four consecutive dividend periods following the Nonpayment.

If and when full dividends have been regularly paid for at least four consecutive dividend periods following a Nonpayment on the Series F Preferred Stock and any other class or series of Parity Stock, the holders of the Series F Preferred Stock will be divested of the foregoing voting rights (subject to revesting in the event of each subsequent Nonpayment) and the term of office of each Preferred Director so elected will terminate and the number of directors on USB’s board of directors will automatically decrease by two. Any Preferred Director may be removed at any time without cause by the holders of record of a majority of the outstanding shares of the Series F Preferred Stock (together with holders of any and all other classes of USB’s authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) when they have the voting rights described above. So long as a Nonpayment continues, any vacancy in the office of a Preferred Director (other than prior to the initial election of the Preferred Directors) may be filled by the written consent of the Preferred Director remaining in office, or if none remains in office, by a vote of the holders of the outstanding shares of Series F Preferred Stock (together with holders of any and all other class of USB’s authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) to serve until the next annual meeting of stockholders. The Preferred Directors will each be entitled to one vote per director on any matter.

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If the holders of Series F Preferred Stock become entitled to vote for the election of directors, the Series F Preferred Stock may be considered a class of voting securities under interpretations adopted by the Federal Reserve Board. As a result, certain holders of the Series F Preferred Stock may become subject to regulations under the Bank Holding Company Act and/or certain acquisitions of the Series F Preferred Stock may be subject to prior approval by the Federal Reserve Board.

So long as any shares of Series F Preferred Stock remain outstanding:

• the affirmative vote or consent of the holders of at least two-thirds of all of the shares of the Series F Preferred Stock and all other Parity Stock at the time outstanding, voting as a single class without regard to series, will be required to issue, authorize or increase the authorized amount of, or to issue or authorize any obligation or security convertible into or evidencing the right to purchase, any class or series of stock ranking senior to the Series F Preferred Stock and all other parity stock with respect to payment of dividends or the distribution of assets upon USB’s liquidation, dissolution or winding up; and

• the affirmative vote or consent of the holders of at least two-thirds of all of the shares of the Series F Preferred Stock at the time outstanding, voting separately as a class, will be required to amend the provisions of USB’s Certificate of Incorporation or the Certificate of Designations of the Series F Preferred Stock or any other series of Preferred Stock so as to materially and adversely affect the powers, preferences, privileges or rights of the Series F Preferred Stock, taken as a whole; provided, however, that any increase in the amount of the authorized or issued Series F Preferred Stock or authorized Preferred Stock or the creation and issuance, or an increase in the authorized or issued amount, of other series of Preferred Stock and/or Junior Stock will not be deemed to adversely affect the powers, preferences, privileges or rights of the Series F Preferred Stock.

The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required will be effected, all outstanding shares of Series F Preferred Stock have been redeemed or called for redemption upon proper notice and sufficient funds have been set aside by USB for the benefit of the holders of the Series F Preferred Stock to effect such redemption.

Series H Preferred Stock

General — The depositary is the sole holder of the Series H Preferred Stock, as described below under the section entitled “—Description of Depositary Shares,” and all references herein to the holders of the Series H Preferred Stock mean the depositary. However, the holders of depositary shares will be entitled, through the depositary, to exercise the rights and preferences of the holders of the Series H Preferred Stock, as described below under “—Description of Depositary Shares.” The holders of the Series H Preferred Stock have no preemptive rights with respect to any shares of USB’s capital stock or any of its other securities convertible into or carrying rights or options to purchase any such capital stock.

The holders of Series H Preferred Stock will be entitled to receive non-cumulative cash dividends when, as and if declared out of assets legally available for payment of dividends. In the event USB does not declare dividends or does not pay dividends in full on the Series H Preferred Stock on any date on which dividends are due, then such unpaid dividends will not cumulate and will no longer accrue and be payable.

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The Series H Preferred Stock is perpetual and will not be convertible into shares of USB’s Common Stock or any other class or series of USB’s capital stock, and will not be subject to any sinking fund or other obligation for their repurchase or retirement.

Rank — With respect to the payment of dividends and amounts upon liquidation, the Series H Preferred Stock ranks equally with the Series A Preferred Stock, the Series B Preferred Stock, the Series F Preferred Stock, the Series I Preferred Stock, the Series J Preferred Stock and the Series K Preferred Stock. and with any future class or series of USB’s capital stock that ranks on a par with the Series H Preferred Stock in the payment of dividends and in the distribution of assets on USB’s liquidation, dissolution or winding up. With respect to the payment of dividends and amounts upon liquidation, the Series H Preferred Stock ranks senior to USB’s Common Stock and any other future class or series of USB’s capital stock over which the Series H Preferred Stock has preference or priority in the payment of dividends or in the distribution of assets on USB’s liquidation, dissolution or winding up. USB may not issue any class of series of capital stock having a preference or priority in the payment of dividends or in the distribution of assets on USB’s liquidation, dissolution or winding up over the Series H Preferred Stock without the affirmative vote or consent of the holders of at least 66-2/3% of all of the shares of the Series H Preferred Stock and all other Parity Stock, at the time outstanding, voting as a single class without regard to series.

In particular, during a dividend period and subject to certain exceptions, no dividend will be paid or declared and no distribution will be made on any Junior Stock, other than a dividend payable solely in Junior Stock, no shares of Junior Stock may be repurchased, redeemed or otherwise acquired for consideration by USB, directly or indirectly (other than as a result of reclassification of Junior Stock for or into Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock, and other than through the use of the proceeds of a substantially contemporaneous sale of other shares of Junior Stock), nor will any monies be paid to or made available for a sinking fund for the redemption of any such securities by USB, and no shares of Parity Stock may be purchased, redeemed or otherwise acquired for consideration by USB otherwise than pursuant to pro rata offers to purchase all, or a pro rata portion, of the Series H Preferred Stock and such Parity Stock except by conversion into or exchange for Junior Stock, unless full dividends for such dividend period on all outstanding shares of Series H Preferred Stock have been paid or declared and a sum sufficient for the payment thereof set aside.

Dividends — Dividends on shares of the Series H Preferred Stock will not be mandatory. Holders of Series H Preferred Stock will be entitled to receive, when, as and if declared by USB’s board of directors or a duly authorized committee of the board, out of assets legally available for the payment of dividends under Delaware law, non-cumulative cash dividends payable quarterly in arrears on each January 15, April 15, July 15 or October 15 (or, if such day is not a business day, the next business day). Dividends on each share of Series H Preferred Stock will accrue on the liquidation preference amount of $25,000 per share at a rate per annum equal to 5.15%. In the case that any date on which dividends are payable on the Series H

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Preferred Stock is not a business day, then payment of the dividend payable on that date will be made on the next succeeding day that is a business day. However, no interest or other payment will be paid in respect of the delay. The record date for payment of dividends on the Series H Preferred Stock will be the last day of the immediately preceding calendar month during which the dividend payment date falls. The amount of dividends payable for any dividend period will be computed on the basis of a 360-day year consisting of twelve 30-day months. For purposes of the Series H Preferred Stock, the term “business day” means each Monday, Tuesday, Wednesday, Thursday or Friday on which banking institutions are not authorized or obligated by law, regulation or executive order to close in New York, New York. Dividends on the Series H Preferred Stock will not be declared, paid or set aside for payment to the extent such act would cause USB to fail to comply with any applicable laws and regulations, including applicable capital adequacy guidelines.

The right of holders of the Series H Preferred Stock to receive dividends is non-cumulative. If USB’s board of directors does not declare a dividend on the Series H Preferred Stock or declares less than a full dividend in respect of any dividend period, the holders of the Series H Preferred Stock will have no right to receive any dividend or a full dividend, as the case may be, for that dividend period, and USB will have no obligation to pay a dividend or to pay full dividends for that dividend period, whether or not dividends are declared and paid for any future dividend period with respect to the Series H Preferred Stock, Parity Stock, Junior Stock or any other class or series of USB’s authorized Preferred Stock.

When dividends are not paid in full upon the Series H Preferred Stock and any other Parity Stock, dividends upon that stock will be declared on a proportional basis so that the amount of dividends declared per share will bear to each other the same ratio that accrued dividends for the current dividend period per share on the Series H Preferred Stock, and accrued dividends, including any accumulations on such Parity Stock, bear to each other. No interest will be payable in respect of any dividend payment on the Series H Preferred Stock that may be in arrears.

Redemption — The Series H Preferred Stock is not subject to any mandatory redemption, sinking fund or other similar provisions.

The Series H Preferred Stock will be redeemable at USB’s option, in whole or in part, at any time at a redemption price equal to $25,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends.

In addition, within 90 days following the occurrence of a Regulatory Capital Treatment Event, USB, at its option, subject to the approval of the Appropriate Federal Banking Agency, may redeem, at any time, all (but not less than all) of the shares of Series H Preferred Stock at the time outstanding, at a redemption price equal to $25,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends. For purposes of the Series H Preferred Stock, “Regulatory Capital Treatment Event” means the good faith determination by USB that, as a result of (i) any amendment to, or change in, the laws or regulations of the United States or any political subdivision of or in the United States that is enacted or becomes effective after the initial issuance of any share of Series H Preferred Stock, (ii) any proposed change in

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those laws or regulations that is announced after the initial issuance of any share of Series H Preferred Stock, or (iii) any official administrative decision or judicial decision or administrative action or other official pronouncement interpreting or applying those laws or regulations that is announced after the initial issuance of any share of Series H Preferred Stock, there is more than an insubstantial risk that USB will not be entitled to treat the full liquidation value of the shares of Series H Preferred Stock then outstanding as “tier 1 capital” (or its equivalent) for purposes of the capital adequacy guidelines of the Federal Reserve Board (or, as and if applicable, the capital adequacy guidelines or regulations of any successor Appropriate Federal Banking Agency), as then in effect and applicable, for as long as any share of Series H Preferred Stock is outstanding.

If shares of the Series H Preferred Stock are to be redeemed, the notice of redemption will be given by first class mail to the holders of record of the Series H Preferred Stock to be redeemed, mailed not less than 30 days nor more than 60 days prior to the date fixed for redemption thereof (provided that, if the depositary shares representing the Series H Preferred Stock are held in book-entry form through DTC, USB may give such notice in any manner permitted by the DTC). Each notice of redemption will include a statement setting forth: (i) the redemption date, (ii) the number of shares of the Series H Preferred Stock to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder, (iii) the redemption price, (iv) the place or places where the certificates evidencing shares of Series H Preferred Stock are to be surrendered for payment of the redemption price and (v) that dividends on the shares to be redeemed will cease to accrue on the redemption date. If notice of redemption of any shares of Series H Preferred Stock has been duly given and if the funds necessary for such redemption have been set aside by USB for the benefit of the holders of any shares of Series H Preferred Stock so called for redemption, then, on and after the redemption date, dividends will cease to accrue on such shares of Series H Preferred Stock, such shares of Series H Preferred Stock will no longer be deemed outstanding and all rights of the holders of such shares will terminate, except the right to receive the redemption price.

In case of any redemption of only part of the shares of the Series H Preferred Stock at the time outstanding, the shares to be redeemed will be selected either pro rata or in such other manner as USB may determine to be fair and equitable.

Under the Federal Reserve Board’s risk-based capital guidelines applicable to bank holding companies, any redemption of the Series H Preferred Stock is subject to prior approval of the Federal Reserve Board.

Rights Upon Liquidation, Dissolution or Winding Up — In the event of USB’s liquidation, dissolution or winding up, the holders of the Series H Preferred Stock at the time outstanding will be entitled to receive a liquidating distribution in the amount of the liquidation preference of $25,000 per share, plus any authorized, declared and unpaid dividends for the then-current dividend period to the date of liquidation, out of USB’s assets legally available for distribution to USB’s stockholders, before any distribution is made to holders of USB’s Common Stock or any Junior Stock and subject to the rights of the holders of any class or series of securities ranking senior to or on parity with the Series H Preferred Stock upon liquidation and the rights of USB’s depositors and other creditors.

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If the amounts available for distribution upon USB’s liquidation, dissolution or winding up are not sufficient to satisfy the full liquidation rights of all the outstanding Series H Preferred Stock and all stock ranking equal to the Series H Preferred Stock, then the holders of each series of Preferred Stock will share ratably in any distribution of assets in proportion to the full respective preferential amount to which they are entitled. After the full amount of the liquidation preference is paid, the holders of Series H Preferred Stock will not be entitled to any further participation in any distribution of USB’s assets.

For such purposes, USB’s consolidation or merger with or into any other entity, the consolidation or merger of any other entity with or into USB, or the sale of all or substantially all of USB’s property or business will not be deemed to constitute USB’s liquidation, dissolution or winding up.

Voting Rights — Except as provided below, the holders of the Series H Preferred Stock will have no voting rights.

Whenever dividends on any shares of the Series H Preferred Stock or any other class or series of Parity Stock have not been declared and paid for an amount equal to six or more quarterly dividend periods, whether consecutive or not, the holders of the Series H Preferred Stock (together with holders of any and all other classes of USB’s authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) will be entitled to vote as a single class for the election of a total of two additional members of USB’s board of directors, provided that the election of any such directors will not cause USB to violate the corporate governance requirement of the New York Stock Exchange (or any other exchange on which USB’s securities may be listed) that listed companies must have a majority of independent directors and provided further that USB’s board of directors will at no time include more than two Preferred Directors. In that event, the number of directors on USB’s board of directors will automatically increase by two and, at the request of any holder of Series H Preferred Stock, a special meeting of the holders of Series H Preferred Stock and any other class or series of Preferred Stock that ranks on parity with the Series H Preferred Stock as to payment of dividends and for which dividends have not been paid, will be called for the election of the two directors (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of the stockholders, in which event such election will be held at such next annual or special meeting of stockholders), followed by such election at each subsequent annual meeting. These voting rights will continue until full dividends have been paid regularly on the shares of the Series H Preferred Stock and any other class or series of Preferred Stock that ranks on parity with the Series H Preferred Stock as to payment of dividends for at least four consecutive dividend periods following the Nonpayment.

If and when full dividends have been regularly paid for at least four consecutive dividend periods following a Nonpayment on the Series H Preferred Stock and any other class or series of Parity Stock, the holders of the Series H Preferred Stock will be divested of the foregoing voting rights (subject to revesting in the event of each subsequent Nonpayment) and the term of office of each Preferred Director so elected will terminate and the number of directors on USB’s board

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of directors will automatically decrease by two. Any Preferred Director may be removed at any time without cause by the holders of record of a majority of the outstanding shares of the Series H Preferred Stock (together with holders of any and all other classes of USB’s authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) when they have the voting rights described above. So long as a Nonpayment continues, any vacancy in the office of a Preferred Director (other than prior to the initial election of the Preferred Directors) may be filled by the written consent of the Preferred Director remaining in office, or if none remains in office, by a vote of the holders of the outstanding shares of Series H Preferred Stock (together with holders of any and all other class of USB’s authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) to serve until the next annual meeting of stockholders. The Preferred Directors will each be entitled to one vote per director on any matter.

If the holders of Series H Preferred Stock become entitled to vote for the election of directors, the Series H Preferred Stock may be considered a class of voting securities under interpretations adopted by the Federal Reserve Board. As a result, certain holders of the Series H Preferred Stock may become subject to regulations under the Bank Holding Company Act and/or certain acquisitions of the Series H Preferred Stock may be subject to prior approval by the Federal Reserve Board.

So long as any shares of Series H Preferred Stock remain outstanding:

• the affirmative vote or consent of the holders of at least two-thirds of all of the shares of the Series H Preferred Stock and all other Parity Stock at the time outstanding, voting as a single class without regard to series, will be required to issue, authorize or increase the authorized amount of, or to issue or authorize any obligation or security convertible into or evidencing the right to purchase, any class or series of stock ranking senior to the Series H Preferred Stock and all other parity stock with respect to payment of dividends or the distribution of assets upon USB’s liquidation, dissolution or winding up; and

• the affirmative vote or consent of the holders of at least two-thirds of all of the shares of the Series H Preferred Stock at the time outstanding, voting separately as a class, will be required to amend the provisions of USB’s Certificate of Incorporation or the Certificate of Designations of the Series H Preferred Stock or any other series of Preferred Stock so as to materially and adversely affect the powers, preferences, privileges or rights of the Series H Preferred Stock, taken as a whole; provided, however, that any increase in the amount of the authorized or issued Series H Preferred Stock or authorized Preferred Stock or the creation and issuance, or an increase in the authorized or issued amount, of other series of Preferred Stock and/or Junior Stock will not be deemed to adversely affect the powers, preferences, privileges or rights of the Series H Preferred Stock.

The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required will be effected, all outstanding shares of Series H Preferred Stock have been redeemed or called for redemption upon proper notice and sufficient funds have been set aside by USB for the benefit of the holders of the Series H Preferred Stock to effect such redemption.

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Series I Preferred Stock

General — The depositary is the sole holder of the Series I Preferred Stock, as described below under the section entitled “—Description of Depositary Shares,” and all references herein to the holders of the Series I Preferred Stock mean the depositary. However, the holders of depositary shares will be entitled, through the depositary, to exercise the rights and preferences of the holders of the Series I Preferred Stock, as described below under “—Description of Depositary Shares.” The holders of the Series I Preferred Stock have no preemptive rights with respect to any shares of USB’s capital stock or any of its other securities convertible into or carrying rights or options to purchase any such capital stock.

The holders of Series I Preferred Stock will be entitled to receive non-cumulative cash dividends when, as and if declared out of assets legally available for payment of dividends. In the event USB does not declare dividends or does not pay dividends in full on the Series I Preferred Stock on any date on which dividends are due, then such unpaid dividends will not cumulate and will no longer accrue and be payable.

The Series I Preferred Stock is perpetual and will not be convertible into shares of USB’s Common Stock or any other class or series of USB’s capital stock, and will not be subject to any sinking fund or other obligation for their repurchase or retirement.

Rank — With respect to the payment of dividends and amounts upon liquidation, the Series I Preferred Stock ranks equally with the Series A Preferred Stock, the Series B Preferred Stock, the Series F Preferred Stock, the Series H Preferred Stock, the Series J Preferred Stock and the Series K Preferred Stock. and with any future class or series of USB’s capital stock that ranks on a par with the Series I Preferred Stock in the payment of dividends and in the distribution of assets on USB’s liquidation, dissolution or winding up. With respect to the payment of dividends and amounts upon liquidation, the Series I Preferred Stock ranks senior to USB’s Common Stock and any other future class or series of USB’s capital stock over which the Series I Preferred Stock has preference or priority in the payment of dividends or in the distribution of assets on USB’s liquidation, dissolution or winding up. USB may not issue any class of series of capital stock having a preference or priority in the payment of dividends or in the distribution of assets on USB’s liquidation, dissolution or winding up over the Series I Preferred Stock without the affirmative vote or consent of the holders of at least 66-2/3% of all of the shares of the Series I Preferred Stock and all other Parity Stock, at the time outstanding, voting as a single class without regard to series.

In particular, during a dividend period and subject to certain exceptions, no dividend will be paid or declared and no distribution will be made on any Junior Stock, other than a dividend payable solely in Junior Stock, no shares of Junior Stock may be repurchased, redeemed or otherwise acquired for consideration by USB, directly or indirectly (other than as a result of reclassification of Junior Stock for or into Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock, and other than through the use of

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the proceeds of a substantially contemporaneous sale of other shares of Junior Stock), nor will any monies be paid to or made available for a sinking fund for the redemption of any such securities by USB, and no shares of Parity Stock may be purchased, redeemed or otherwise acquired for consideration by USB otherwise than pursuant to pro rata offers to purchase all, or a pro rata portion, of the Series I Preferred Stock and such Parity Stock except by conversion into or exchange for Junior Stock, unless full dividends for such dividend period on all outstanding shares of Series I Preferred Stock have been paid or declared and a sum sufficient for the payment thereof set aside.

Dividends — Dividends on shares of the Series I Preferred Stock will not be mandatory. Holders of Series I Preferred Stock will be entitled to receive, when, as and if declared by USB’s board of directors or a duly authorized committee of the board, out of assets legally available for the payment of dividends under Delaware law, non-cumulative cash dividends. Dividends on each share of Series I Preferred Stock will accrue on the liquidation preference amount of $25,000 per share at a rate per annum equal to (1) from the date of issuance of the Series I Preferred Stock to but excluding January 15, 2021 at a rate per annum equal to 5.125% payable semi-annually in arrears on each January 15 and July 15, through, and including, January 15, 2021 and (2) from and including January 15, 2021, at a rate per annum equal to three-month LIBOR (computed as provided below) plus 3.486%. In the case that any date or on prior January 15, 2021 on which dividends are payable on the Series I Preferred Stock is not a business day, then payment of the dividend payable on that date will be made on the next succeeding day that is a business day, without any interest or other payment in respect of such delay, and if any date after January 15, 2021 on which dividends otherwise would be payable is not a business day, then payment of any dividend otherwise payable on that date will be made on the next succeeding business day unless that day falls in the next calendar month, in which case payment of any dividend otherwise payable on that date will be the immediately preceding business day, and dividends will accrue to the actual payment date. The record date for payment of dividends on the Series I Preferred Stock will be the last day of the immediately preceding calendar month during which the dividend payment date falls. The amount of dividends payable for any period prior to January 15, 2021 will be computed on the basis of a 360-day year consisting of twelve 30-day months and dividends for periods thereafter will be computed on the basis of a 360-day year and the actual number of days elapsed. For purposes of the Series I Preferred Stock, the term “business day” means, for dividend periods prior to January 15, 2021, each Monday, Tuesday, Wednesday, Thursday or Friday on which banking institutions are not authorized or obligated by law, regulation or executive order to close in New York, New York, and for dividend periods on and after January 15, 2021, it means any date that would be considered a Business Day for dividend periods prior to January 15, 2021 that is also a London Banking Day. Dividends on the Series I Preferred Stock will not be declared, paid or set aside for payment to the extent such act would cause USB to fail to comply with any applicable laws and regulations, including applicable capital adequacy guidelines.

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For any dividend period beginning on or after January 15, 2021, three-month LIBOR will be determined by the calculation agent on the second London Banking Day immediately preceding the first day of such dividend period in the following manner:

• Three-month LIBOR will be the offered rate per annum for three-month deposits in U.S. dollars, beginning on the first day of such period, as that rate appears on Reuters Screen LIBOR01 as of 11:00 A.M., London time, on the second London Banking Day immediately preceding the first day of such dividend period.

• If the rate described above does not appear on Reuters Screen LIBOR01 Page, three-month LIBOR will be determined on the basis of the rates at which deposits in U.S. dollars for a three-month period commencing on the first day of that dividend period and in a principal amount of not less than $1,000,000 are offered to prime banks in the London interbank market by four major banks in the London interbank market selected by USB, at approximately 11:00 a.m. (London time), on the second London banking day preceding the first day of that dividend period. The calculation agent will request the principal London office of each of such banks to provide a quotation of its rate. If at least two such quotations are provided, three-month LIBOR with respect to that dividend period will be the arithmetic mean of such quotations.

• If fewer than two quotations are provided as described above, three-month LIBOR will be the arithmetic mean of the rates quoted by three major banks in New York, New York, selected by the calculation agent, at approximately 11:00 a.m. (New York City time), on the first day of that dividend period for loans in U.S. dollars to leading European banks for a three-month period commencing on the first day of that dividend period and in a principal amount of not less than $1,000,000.

• If fewer than three banks are not quoting as described above, three-month LIBOR for the new dividend period will be three-month LIBOR in effect for the prior dividend period or, in the case of the first dividend period beginning on or after January 15, 2021, the most recent rate that could have been determined had the dividend rate been a floating rate during the period prior to January 15, 2021.

The calculation agent’s establishment of three-month LIBOR and calculation of the amount of dividends for each dividend period will be on file at USB’s principal offices, will be made available to any holder of Series I Preferred Stock upon request and will be final and binding in the absence of manifest error.

The term “Reuters Screen LIBOR01 Page” means the display designated on the Reuters 3000 Xtra (or such other page as may replace that page on that service or such other service as may be nominated by the British Bankers’ Association for the purpose of displaying London interbank offered rates for U.S. dollar deposits).

The right of holders of the Series I Preferred Stock to receive dividends is non-cumulative. If USB’s board of directors does not declare a dividend on the Series I Preferred Stock or declares less than a full dividend in respect of any dividend period, the holders of the Series I Preferred Stock will have no right to receive any dividend or a full dividend, as the case may be, for that dividend period, and USB will have no obligation to pay a dividend or to pay full dividends for that dividend period, whether or not dividends are declared and paid for any future dividend period with respect to the Series I Preferred Stock, Parity Stock, Junior Stock or any other class or series of USB’s authorized Preferred Stock.

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When dividends are not paid in full upon the Series I Preferred Stock and any other Parity Stock, dividends upon that stock will be declared on a proportional basis so that the amount of dividends declared per share will bear to each other the same ratio that accrued dividends for the current dividend period per share on the Series I Preferred Stock, and accrued dividends, including any accumulations on such Parity Stock, bear to each other. No interest will be payable in respect of any dividend payment on the Series I Preferred Stock that may be in arrears.

Redemption — The Series I Preferred Stock is not subject to any mandatory redemption, sinking fund or other similar provisions.

The Series I Preferred Stock will be redeemable at USB’s option, in whole or in part, at any time on or after January 15, 2021 at a redemption price equal to $25,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends.

In addition, within 90 days following the occurrence of a Regulatory Capital Treatment Event, USB, at its option, subject to the approval of the Appropriate Federal Banking Agency, may redeem, at any time, all (but not less than all) of the shares of Series I Preferred Stock at the time outstanding, at a redemption price equal to $25,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends. For purposes of the Series I Preferred Stock, “Regulatory Capital Treatment Event” means the good faith determination by USB that, as a result of (i) any amendment to, or change in, the laws or regulations of the United States or any political subdivision of or in the United States that is enacted or becomes effective after the initial issuance of any share of Series I Preferred Stock, (ii) any proposed change in those laws or regulations that is announced after the initial issuance of any share of Series I Preferred Stock, or (iii) any official administrative decision or judicial decision or administrative action or other official pronouncement interpreting or applying those laws or regulations that is announced after the initial issuance of any share of Series I Preferred Stock, there is more than an insubstantial risk that USB will not be entitled to treat the full liquidation value of the shares of Series I Preferred Stock then outstanding as “additional tier 1 capital” (or its equivalent) for purposes of the capital adequacy guidelines of the Federal Reserve Board (or, as and if applicable, the capital adequacy guidelines or regulations of any successor Appropriate Federal Banking Agency), as then in effect and applicable, for as long as any share of Series I Preferred Stock is outstanding.

If shares of the Series I Preferred Stock are to be redeemed, the notice of redemption will be given by first class mail to the holders of record of the Series I Preferred Stock to be redeemed, mailed not less than 30 days nor more than 60 days prior to the date fixed for redemption thereof (provided that, if the depositary shares representing the Series I Preferred Stock are held in book-entry form through DTC, USB may give such notice in any manner permitted by the DTC). Each notice of redemption will include a statement setting forth: (i) the redemption date, (ii) the number of shares of the Series I Preferred Stock to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder, (iii) the redemption price, (iv) the place or places where the

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certificates evidencing shares of Series I Preferred Stock are to be surrendered for payment of the redemption price and (v) that dividends on the shares to be redeemed will cease to accrue on the redemption date. If notice of redemption of any shares of Series I Preferred Stock has been duly given and if the funds necessary for such redemption have been set aside by USB for the benefit of the holders of any shares of Series I Preferred Stock so called for redemption, then, on and after the redemption date, dividends will cease to accrue on such shares of Series I Preferred Stock, such shares of Series I Preferred Stock will no longer be deemed outstanding and all rights of the holders of such shares will terminate, except the right to receive the redemption price.

In case of any redemption of only part of the shares of the Series I Preferred Stock at the time outstanding, the shares to be redeemed will be selected either pro rata or in such other manner as USB may determine to be fair and equitable.

Under the Federal Reserve Board’s risk-based capital guidelines applicable to bank holding companies, any redemption of the Series I Preferred Stock is subject to prior approval of the Federal Reserve Board.

Rights Upon Liquidation, Dissolution or Winding Up — In the event of USB’s liquidation, dissolution or winding up, the holders of the Series I Preferred Stock at the time outstanding will be entitled to receive a liquidating distribution in the amount of the liquidation preference of $25,000 per share, plus any authorized, declared and unpaid dividends for the then-current dividend period to the date of liquidation, out of USB’s assets legally available for distribution to USB’s stockholders, before any distribution is made to holders of USB’s Common Stock or any Junior Stock and subject to the rights of the holders of any class or series of securities ranking senior to or on parity with the Series I Preferred Stock upon liquidation and the rights of USB’s depositors and other creditors.

If the amounts available for distribution upon USB’s liquidation, dissolution or winding up are not sufficient to satisfy the full liquidation rights of all the outstanding Series I Preferred Stock and all stock ranking equal to the Series I Preferred Stock, then the holders of each series of Preferred Stock will share ratably in any distribution of assets in proportion to the full respective preferential amount to which they are entitled. After the full amount of the liquidation preference is paid, the holders of Series I Preferred Stock will not be entitled to any further participation in any distribution of USB’s assets.

For such purposes, USB’s consolidation or merger with or into any other entity, the consolidation or merger of any other entity with or into USB, or the sale of all or substantially all of USB’s property or business will not be deemed to constitute USB’s liquidation, dissolution or winding up.

Voting Rights — Except as provided below, the holders of the Series I Preferred Stock will have no voting rights.

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Whenever dividends on any shares of the Series I Preferred Stock or any other class or series of Parity Stock have not been declared and paid for an amount equal to six or more quarterly dividend periods, whether consecutive or not, the holders of the Series I Preferred Stock (together with holders of any and all other classes of USB’s authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) will be entitled to vote as a single class for the election of a total of two additional members of USB’s board of directors, provided that the election of any such directors will not cause USB to violate the corporate governance requirement of the New York Stock Exchange (or any other exchange on which USB’s securities may be listed) that listed companies must have a majority of independent directors and provided further that USB’s board of directors will at no time include more than two Preferred Directors. In that event, the number of directors on USB’s board of directors will automatically increase by two and, at the request of any holder of Series I Preferred Stock, a special meeting of the holders of Series I Preferred Stock and any other class or series of Preferred Stock that ranks on parity with the Series I Preferred Stock as to payment of dividends and for which dividends have not been paid, will be called for the election of the two directors (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of the stockholders, in which event such election will be held at such next annual or special meeting of stockholders), followed by such election at each subsequent annual meeting. These voting rights will continue until full dividends have been paid regularly on the shares of the Series I Preferred Stock and any other class or series of Preferred Stock that ranks on parity with the Series I Preferred Stock as to payment of dividends for at least four consecutive quarterly dividend periods following the Nonpayment.

If and when full dividends have been regularly paid for at least four consecutive quarterly dividend periods following a Nonpayment on the Series I Preferred Stock and any other class or series of Parity Stock, the holders of the Series I Preferred Stock will be divested of the foregoing voting rights (subject to revesting in the event of each subsequent Nonpayment) and the term of office of each Preferred Director so elected will terminate and the number of directors on USB’s board of directors will automatically decrease by two. Any Preferred Director may be removed at any time without cause by the holders of record of a majority of the outstanding shares of the Series I Preferred Stock (together with holders of any and all other classes of USB’s authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) when they have the voting rights described above. So long as a Nonpayment continues, any vacancy in the office of a Preferred Director (other than prior to the initial election of the Preferred Directors) may be filled by the written consent of the Preferred Director remaining in office, or if none remains in office, by a vote of the holders of the outstanding shares of Series I Preferred Stock (together with holders of any and all other class of USB’s authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) to serve until the next annual meeting of stockholders. The Preferred Directors will each be entitled to one vote per director on any matter.

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If the holders of Series I Preferred Stock become entitled to vote for the election of directors, the Series I Preferred Stock may be considered a class of voting securities under interpretations adopted by the Federal Reserve Board. As a result, certain holders of the Series I Preferred Stock may become subject to regulations under the Bank Holding Company Act and/or certain acquisitions of the Series I Preferred Stock may be subject to prior approval by the Federal Reserve Board.

So long as any shares of Series I Preferred Stock remain outstanding:

• the affirmative vote or consent of the holders of at least two-thirds of all of the shares of the Series I Preferred Stock and all other Parity Stock at the time outstanding, voting as a single class without regard to series, will be required to issue, authorize or increase the authorized amount of, or to issue or authorize any obligation or security convertible into or evidencing the right to purchase, any class or series of stock ranking senior to the Series I Preferred Stock and all other parity stock with respect to payment of dividends or the distribution of assets upon USB’s liquidation, dissolution or winding up; and

• the affirmative vote or consent of the holders of at least two-thirds of all of the shares of the Series I Preferred Stock at the time outstanding, voting separately as a class, will be required to amend the provisions of USB’s Certificate of Incorporation or the Certificate of Designations of the Series I Preferred Stock or any other series of Preferred Stock so as to materially and adversely affect the powers, preferences, privileges or rights of the Series I Preferred Stock, taken as a whole; provided, however, that any increase in the amount of the authorized or issued Series I Preferred Stock or authorized Preferred Stock or the creation and issuance, or an increase in the authorized or issued amount, of other series of Preferred Stock and/or Junior Stock will not be deemed to adversely affect the powers, preferences, privileges or rights of the Series I Preferred Stock.

The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required will be effected, all outstanding shares of Series I Preferred Stock have been redeemed or called for redemption upon proper notice and sufficient funds have been set aside by USB for the benefit of the holders of the Series I Preferred Stock to effect such redemption.

Series J Preferred Stock

General — The depositary is the sole holder of the Series J Preferred Stock, as described below under the section entitled “—Description of Depositary Shares,” and all references herein to the holders of the Series J Preferred Stock mean the depositary. However, the holders of depositary shares will be entitled, through the depositary, to exercise the rights and preferences of the holders of the Series J Preferred Stock, as described below under “—Description of Depositary Shares.” The holders of the Series J Preferred Stock have no preemptive rights with respect to any shares of USB’s capital stock or any of its other securities convertible into or carrying rights or options to purchase any such capital stock.

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The holders of Series J Preferred Stock will be entitled to receive non-cumulative cash dividends when, as and if declared out of assets legally available for payment of dividends. In the event USB does not declare dividends or does not pay dividends in full on the Series J Preferred Stock on any date on which dividends are due, then such unpaid dividends will not cumulate and will no longer accrue and be payable.

The Series J Preferred Stock is perpetual and will not be convertible into shares of USB’s Common Stock or any other class or series of USB’s capital stock, and will not be subject to any sinking fund or other obligation for their repurchase or retirement.

Rank — With respect to the payment of dividends and amounts upon liquidation, the Series J Preferred Stock ranks equally with the Series A Preferred Stock, the Series B Preferred Stock, the Series F Preferred Stock, the Series H Preferred Stock, the Series I Preferred Stock and the Series K Preferred Stock. and with any future class or series of USB’s capital stock that ranks on a par with the Series J Preferred Stock in the payment of dividends and in the distribution of assets on USB’s liquidation, dissolution or winding up. With respect to the payment of dividends and amounts upon liquidation, the Series J Preferred Stock ranks senior to USB’s Common Stock and any other future class or series of USB’s capital stock over which the Series J Preferred Stock has preference or priority in the payment of dividends or in the distribution of assets on USB’s liquidation, dissolution or winding up. USB may not issue any class of series of capital stock having a preference or priority in the payment of dividends or in the distribution of assets on USB’s liquidation, dissolution or winding up over the Series J Preferred Stock without the affirmative vote or consent of the holders of at least 66-2/3% of all of the shares of the Series J Preferred Stock and all other Parity Stock, at the time outstanding, voting as a single class without regard to series.

In particular, during a dividend period and subject to certain exceptions, no dividend will be paid or declared and no distribution will be made on any Junior Stock, other than a dividend payable solely in Junior Stock, no shares of Junior Stock may be repurchased, redeemed or otherwise acquired for consideration by USB, directly or indirectly (other than as a result of reclassification of Junior Stock for or into Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock, and other than through the use of the proceeds of a substantially contemporaneous sale of other shares of Junior Stock), nor will any monies be paid to or made available for a sinking fund for the redemption of any such securities by USB, and no shares of Parity Stock may be purchased, redeemed or otherwise acquired for consideration by USB otherwise than pursuant to pro rata offers to purchase all, or a pro rata portion, of the Series J Preferred Stock and such Parity Stock except by conversion into or exchange for Junior Stock, unless full dividends for such dividend period on all outstanding shares of Series J Preferred Stock have been paid or declared and a sum sufficient for the payment thereof set aside.

Dividends — Dividends on shares of the Series J Preferred Stock will not be mandatory. Holders of Series J Preferred Stock will be entitled to receive, when, as and if declared by USB’s board of directors or a duly authorized committee of the board, out of assets legally available for the payment of dividends under Delaware law, non-cumulative cash dividends. Dividends on each share of Series J Preferred Stock will accrue on the liquidation preference amount of

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$25,000 per share at a rate per annum equal to (1) from the date of issuance of the Series J Preferred Stock to but excluding April 15, 2027 at a rate per annum equal to 5.300% payable semi-annually in arrears on each April 15 and October 15, through and including, April 15, 2027 and (2) from and including April 15, 2027, at a rate per annum equal to three-month LIBOR (computed as provided below) plus 2.914% payable quarterly in arrears on each January 15, April 15, July 15 and October 15, commencing on July 15, 2027. In the case that any date or on prior April 15, 2027 on which dividends are payable on the Series J Preferred Stock is not a business day, then payment of the dividend payable on that date will be made on the next succeeding day that is a business day, without any interest or other payment in respect of such delay, and if any date after April 15, 2027 on which dividends otherwise would be payable is not a business day, then payment of any dividend otherwise payable on that date will be made on the next succeeding business day unless that day falls in the next calendar month, in which case payment of any dividend otherwise payable on that date will be the immediately preceding business day, and dividends will accrue to the actual payment date. The record date for payment of dividends on the Series J Preferred Stock will be the last day of the immediately preceding calendar month during which the dividend payment date falls. The amount of dividends payable for any period prior to April 15, 2027 will be computed on the basis of a 360-day year consisting of twelve 30-day months and dividends for periods thereafter will be computed on the basis of a 360-day year and the actual number of days elapsed. For purposes of the Series J Preferred Stock, the term “business day” means, for dividend periods prior to April 15, 2027, each Monday, Tuesday, Wednesday, Thursday or Friday on which banking institutions are not authorized or obligated by law, regulation or executive order to close in New York, New York, and for dividend periods on and after April 15, 2027, it means any date that would be considered a Business Day for dividend periods prior to April 15, 2027 that is also a London Banking Day. Dividends on the Series J Preferred Stock will not be declared, paid or set aside for payment to the extent such act would cause USB to fail to comply with any applicable laws and regulations, including applicable capital adequacy guidelines.

For any dividend period beginning on or after April 15, 2027, three-month LIBOR will be determined by the calculation agent on the second London Banking Day immediately preceding the first day of such dividend period in the following manner:

• Three-month LIBOR will be the offered rate per annum for three-month deposits in U.S. dollars, beginning on the first day of such period, as that rate appears on the Designated LIBOR Page as of 11:00 A.M., London time, on the second London Banking Day immediately preceding the first day of such dividend period.

• If the rate described above does not appear on the Designated LIBOR Page, three-month LIBOR will be determined on the basis of the rates at which deposits in U.S. dollars for a three-month period commencing on the first day of that dividend period and in a principal amount of not less than $1,000,000 are offered to prime banks in the London interbank market by four major banks in the London interbank market selected by USB, at approximately 11:00 a.m. (London time), on the second London banking day preceding the first day of that dividend period. The calculation agent will request the principal London office of each of such banks to provide a quotation of its rate. If at least two such quotations are provided, three-month LIBOR with respect to that dividend period will be the arithmetic mean of such quotations.

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• If fewer than two quotations are provided as described above, three-month LIBOR will be the arithmetic mean of the rates quoted by three major banks in New York, New York, selected by the calculation agent, at approximately 11:00 a.m. (New York City time), on the first day of that dividend period for loans in U.S. dollars to leading European banks for a three-month period commencing on the first day of that dividend period and in a principal amount of not less than $1,000,000.

• If fewer than three banks are not quoting as described above, three-month LIBOR for the new dividend period will be three-month LIBOR in effect for the prior dividend period or, in the case of the first dividend period beginning on or after April 15, 2027 , the most recent rate that could have been determined had the dividend rate been a floating rate during the period prior to April 15, 2027.

The calculation agent’s establishment of three-month LIBOR and calculation of the amount of dividends for each dividend period will be on file at USB’s principal offices, will be made available to any holder of Series J Preferred Stock upon request and will be final and binding in the absence of manifest error.

The term “Designated LIBOR Page” means the display on Bloomberg Page BBAM (or any successor or substitute page of such service, or any successor to such service selected by USB), for the purpose of displaying the London interbank offered rates for U.S. dollars.

The right of holders of the Series J Preferred Stock to receive dividends is non-cumulative. If USB’s board of directors does not declare a dividend on the Series J Preferred Stock or declares less than a full dividend in respect of any dividend period, the holders of the Series J Preferred Stock will have no right to receive any dividend or a full dividend, as the case may be, for that dividend period, and USB will have no obligation to pay a dividend or to pay full dividends for that dividend period, whether or not dividends are declared and paid for any future dividend period with respect to the Series J Preferred Stock, Parity Stock, Junior Stock or any other class or series of USB’s authorized Preferred Stock.

When dividends are not paid in full upon the Series J Preferred Stock and any other Parity Stock, dividends upon that stock will be declared on a proportional basis so that the amount of dividends declared per share will bear to each other the same ratio that accrued dividends for the current dividend period per share on the Series J Preferred Stock, and accrued dividends, including any accumulations on such Parity Stock, bear to each other. No interest will be payable in respect of any dividend payment on the Series J Preferred Stock that may be in arrears.

Redemption — The Series J Preferred Stock is not subject to any mandatory redemption, sinking fund or other similar provisions.

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The Series J Preferred Stock will be redeemable at USB’s option, in whole or in part, at any time on or after April 15, 2027 at a redemption price equal to $25,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends.

In addition, within 90 days following the occurrence of a Regulatory Capital Treatment Event, USB, at its option, subject to the approval of the Appropriate Federal Banking Agency, may redeem, at any time, all (but not less than all) of the shares of Series J Preferred Stock at the time outstanding, at a redemption price equal to $25,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends. For purposes of the Series J Preferred Stock, “Regulatory Capital Treatment Event” means the good faith determination by USB that, as a result of (i) any amendment to, or change in, the laws or regulations of the United States or any political subdivision of or in the United States that is enacted or becomes effective after the initial issuance of any share of Series J Preferred Stock, (ii) any proposed change in those laws or regulations that is announced after the initial issuance of any share of Series J Preferred Stock, or (iii) any official administrative decision or judicial decision or administrative action or other official pronouncement interpreting or applying those laws or regulations that is announced after the initial issuance of any share of Series J Preferred Stock, there is more than an insubstantial risk that USB will not be entitled to treat the full liquidation value of the shares of Series J Preferred Stock then outstanding as “additional tier 1 capital” (or its equivalent) for purposes of the capital adequacy guidelines of the Federal Reserve Board (or, as and if applicable, the capital adequacy guidelines or regulations of any successor Appropriate Federal Banking Agency), as then in effect and applicable, for as long as any share of Series J Preferred Stock is outstanding.

If shares of the Series J Preferred Stock are to be redeemed, the notice of redemption will be given by first class mail to the holders of record of the Series J Preferred Stock to be redeemed, mailed not less than 30 days nor more than 60 days prior to the date fixed for redemption thereof (provided that, if the depositary shares representing the Series J Preferred Stock are held in book-entry form through DTC, USB may give such notice in any manner permitted by the DTC). Each notice of redemption will include a statement setting forth: (i) the redemption date, (ii) the number of shares of the Series J Preferred Stock to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder, (iii) the redemption price, (iv) the place or places where the certificates evidencing shares of Series J Preferred Stock are to be surrendered for payment of the redemption price and (v) that dividends on the shares to be redeemed will cease to accrue on the redemption date. If notice of redemption of any shares of Series J Preferred Stock has been duly given and if the funds necessary for such redemption have been set aside by USB for the benefit of the holders of any shares of Series J Preferred Stock so called for redemption, then, on and after the redemption date, dividends will cease to accrue on such shares of Series J Preferred Stock, such shares of Series J Preferred Stock will no longer be deemed outstanding and all rights of the holders of such shares will terminate, except the right to receive the redemption price.

In case of any redemption of only part of the shares of the Series J Preferred Stock at the time outstanding, the shares to be redeemed will be selected either pro rata or in such other manner as USB may determine to be fair and equitable.

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Under the Federal Reserve Board’s risk-based capital guidelines applicable to bank holding companies, any redemption of the Series J Preferred Stock is subject to prior approval of the Federal Reserve Board.

Rights Upon Liquidation, Dissolution or Winding Up — In the event of USB’s liquidation, dissolution or winding up, the holders of the Series J Preferred Stock at the time outstanding will be entitled to receive a liquidating distribution in the amount of the liquidation preference of $25,000 per share, plus any authorized, declared and unpaid dividends for the then-current dividend period to the date of liquidation, out of USB’s assets legally available for distribution to USB’s stockholders, before any distribution is made to holders of USB’s Common Stock or any Junior Stock and subject to the rights of the holders of any class or series of securities ranking senior to or on parity with the Series J Preferred Stock upon liquidation and the rights of USB’s depositors and other creditors.

If the amounts available for distribution upon USB’s liquidation, dissolution or winding up are not sufficient to satisfy the full liquidation rights of all the outstanding Series J Preferred Stock and all stock ranking equal to the Series J Preferred Stock, then the holders of each series of Preferred Stock will share ratably in any distribution of assets in proportion to the full respective preferential amount to which they are entitled. After the full amount of the liquidation preference is paid, the holders of Series J Preferred Stock will not be entitled to any further participation in any distribution of USB’s assets.

For such purposes, USB’s consolidation or merger with or into any other entity, the consolidation or merger of any other entity with or into USB, or the sale of all or substantially all of USB’s property or business will not be deemed to constitute USB’s liquidation, dissolution or winding up.

Voting Rights — Except as provided below, the holders of the Series J Preferred Stock will have no voting rights.

Whenever dividends on any shares of the Series J Preferred Stock or any other class or series of Parity Stock have not been declared and paid for an amount equal to six or more quarterly dividend periods (whether consecutive or not) or their equivalent, the holders of the Series J Preferred Stock (together with holders of any and all other classes of USB’s authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) will be entitled to vote as a single class for the election of a total of two additional members of USB’s board of directors, provided that the election of any such directors will not cause USB to violate the corporate governance requirement of the New York Stock Exchange (or any other exchange on which USB’s securities may be listed) that listed companies must have a majority of independent directors and provided further that USB’s board of directors will at no time include more than two Preferred Directors. In that event, the number of directors on USB’s board of directors will automatically increase by two and, at the request of any holder of Series J Preferred Stock, a special meeting of the holders of Series J Preferred Stock and any other class or series of Preferred Stock that ranks on parity with the Series J Preferred Stock as to payment

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of dividends and for which dividends have not been paid, will be called for the election of the two directors (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of the stockholders, in which event such election will be held at such next annual or special meeting of stockholders), followed by such election at each subsequent annual meeting. These voting rights will continue until full dividends have been paid regularly on the shares of the Series J Preferred Stock and any other class or series of Preferred Stock that ranks on parity with the Series J Preferred Stock as to payment of dividends for at least four quarterly consecutive dividend periods or their equivalent following the Nonpayment.

If and when full dividends have been regularly paid for at least four consecutive quarterly dividend periods or their equivalent following a Nonpayment on the Series J Preferred Stock and any other class or series of Parity Stock, the holders of the Series J Preferred Stock will be divested of the foregoing voting rights (subject to revesting in the event of each subsequent Nonpayment) and the term of office of each Preferred Director so elected will terminate and the number of directors on USB’s board of directors will automatically decrease by two. Any Preferred Director may be removed at any time without cause by the holders of record of a majority of the outstanding shares of the Series J Preferred Stock (together with holders of any and all other classes of USB’s authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) when they have the voting rights described above. So long as a Nonpayment continues, any vacancy in the office of a Preferred Director (other than prior to the initial election of the Preferred Directors) may be filled by the written consent of the Preferred Director remaining in office, or if none remains in office, by a vote of the holders of the outstanding shares of Series J Preferred Stock (together with holders of any and all other class of USB’s authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) to serve until the next annual meeting of stockholders. The Preferred Directors will each be entitled to one vote per director on any matter.

If the holders of Series J Preferred Stock become entitled to vote for the election of directors, the Series J Preferred Stock may be considered a class of voting securities under interpretations adopted by the Federal Reserve Board. As a result, certain holders of the Series J Preferred Stock may become subject to regulations under the Bank Holding Company Act and/or certain acquisitions of the Series J Preferred Stock may be subject to prior approval by the Federal Reserve Board.

So long as any shares of Series J Preferred Stock remain outstanding:

• the affirmative vote or consent of the holders of at least two-thirds of all of the shares of the Series J Preferred Stock and all other Parity Stock at the time outstanding, voting as a single class without regard to series, will be required to issue, authorize or increase the authorized amount of, or to issue or authorize any obligation or security convertible into or evidencing the right to purchase, any class or series of stock ranking senior to the Series J Preferred Stock and all other parity stock with respect to payment of dividends or the distribution of assets upon USB’s liquidation, dissolution or winding up; and

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• the affirmative vote or consent of the holders of at least two-thirds of all of the shares of the Series J Preferred Stock at the time outstanding, voting separately as a class, will be required to amend the provisions of USB’s Certificate of Incorporation or the Certificate of Designations of the Series J Preferred Stock or any other series of Preferred Stock so as to materially and adversely affect the powers, preferences, privileges or rights of the Series J Preferred Stock, taken as a whole; provided, however, that any increase in the amount of the authorized or issued Series J Preferred Stock or authorized Preferred Stock or the creation and issuance, or an increase in the authorized or issued amount, of other series of Preferred Stock and/or Junior Stock will not be deemed to adversely affect the powers, preferences, privileges or rights of the Series J Preferred Stock.

The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required will be effected, all outstanding shares of Series J Preferred Stock have been redeemed or called for redemption upon proper notice and sufficient funds have been set aside by USB for the benefit of the holders of the Series J Preferred Stock to effect such redemption.

Series K Preferred Stock

General — The depositary is the sole holder of the Series K Preferred Stock, as described below under the section entitled “—Description of Depositary Shares,” and all references herein to the holders of the Series K Preferred Stock mean the depositary. However, the holders of depositary shares will be entitled, through the depositary, to exercise the rights and preferences of the holders of the Series K Preferred Stock, as described below under “—Description of Depositary Shares.” The holders of the Series K Preferred Stock have no preemptive rights with respect to any shares of USB’s capital stock or any of its other securities convertible into or carrying rights or options to purchase any such capital stock.

The holders of Series K Preferred Stock will be entitled to receive non-cumulative cash dividends when, as and if declared out of assets legally available for payment of dividends. In the event USB does not declare dividends or does not pay dividends in full on the Series K Preferred Stock on any date on which dividends are due, then such unpaid dividends will not cumulate and will no longer accrue and be payable.

The Series K Preferred Stock is perpetual and will not be convertible into shares of USB’s Common Stock or any other class or series of USB’s capital stock, and will not be subject to any sinking fund or other obligation for their repurchase or retirement.

Rank — With respect to the payment of dividends and amounts upon liquidation, the Series K Preferred Stock ranks equally with the Series A Preferred Stock, the Series B Preferred Stock, the Series F Preferred Stock, the Series H Preferred Stock, the Series I Preferred Stock and the Series J Preferred Stock. and with any future class or series of USB’s capital stock that ranks on a par with the Series K Preferred Stock in the payment of dividends and in the distribution of assets on USB’s liquidation, dissolution or winding up. With respect to the payment of dividends and amounts upon liquidation, the Series K Preferred Stock ranks senior to USB’s Common Stock and any other future class or series of USB’s capital stock over which the

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Series K Preferred Stock has preference or priority in the payment of dividends or in the distribution of assets on USB’s liquidation, dissolution or winding up. USB may not issue any class of series of capital stock having a preference or priority in the payment of dividends or in the distribution of assets on USB’s liquidation, dissolution or winding up over the Series K Preferred Stock without the affirmative vote or consent of the holders of at least 66-2/3% of all of the shares of the Series K Preferred Stock and all other Parity Stock, at the time outstanding, voting as a single class without regard to series.

In particular, during a dividend period and subject to certain exceptions, no dividend will be paid or declared and no distribution will be made on any Junior Stock, other than a dividend payable solely in Junior Stock, no shares of Junior Stock may be repurchased, redeemed or otherwise acquired for consideration by USB, directly or indirectly (other than as a result of reclassification of Junior Stock for or into Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock, and other than through the use of the proceeds of a substantially contemporaneous sale of other shares of Junior Stock), nor will any monies be paid to or made available for a sinking fund for the redemption of any such securities by USB, and no shares of Parity Stock may be purchased, redeemed or otherwise acquired for consideration by USB otherwise than pursuant to pro rata offers to purchase all, or a pro rata portion, of the Series K Preferred Stock and such Parity Stock except by conversion into or exchange for Junior Stock, unless full dividends for such dividend period on all outstanding shares of Series K Preferred Stock have been paid or declared and a sum sufficient for the payment thereof set aside.

Dividends — Dividends on shares of the Series K Preferred Stock will not be mandatory. Holders of Series K Preferred Stock will be entitled to receive, when, as and if declared by USB’s board of directors or a duly authorized committee of the board, out of assets legally available for the payment of dividends under Delaware law, non-cumulative cash dividends. Dividends on each share of Series K Preferred Stock will accrue on the liquidation preference amount of $25,000 per share at a rate per annum equal to 5.50% payable quarterly in arrears on each January 15, April 15, July 15 and October 15. If any day on which dividends are payable on the Series K Preferred Stock is not a business day, then payment of the dividend payable on that date will be made on the next succeeding day that is a business day, without any interest or other payment in respect of such delay. The record date for payment of dividends on the Series K Preferred Stock will be the last day of the immediately preceding calendar month during which the dividend payment date falls. The amount of dividends payable for any period will be computed on the basis of a 360-day year consisting of twelve 30-day months. For purposes of the Series K Preferred Stock, the term “business day” means each Monday, Tuesday, Wednesday, Thursday or Friday on which banking institutions are not authorized or obligated by law, regulation or executive order to close in New York, New York. Dividends on the Series K Preferred Stock will not be declared, paid or set aside for payment to the extent such act would cause USB to fail to comply with any applicable laws and regulations, including applicable capital adequacy guidelines.

The right of holders of the Series K Preferred Stock to receive dividends is non-cumulative. If USB’s board of directors does not declare a dividend on the Series K Preferred Stock or declares less than a full dividend in respect of any dividend period, the holders of the

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Series K Preferred Stock will have no right to receive any dividend or a full dividend, as the case may be, for that dividend period, and USB will have no obligation to pay a dividend or to pay full dividends for that dividend period, whether or not dividends are declared and paid for any future dividend period with respect to the Series K Preferred Stock, Parity Stock, Junior Stock or any other class or series of USB’s authorized Preferred Stock.

When dividends are not paid in full upon the Series K Preferred Stock and any other Parity Stock, dividends upon that stock will be declared on a proportional basis so that the amount of dividends declared per share will bear to each other the same ratio that accrued dividends for the current dividend period per share on the Series K Preferred Stock, and accrued dividends, including any accumulations on such Parity Stock, bear to each other. No interest will be payable in respect of any dividend payment on the Series K Preferred Stock that may be in arrears.

Redemption —The Series K Preferred Stock is not subject to any mandatory redemption, sinking fund or other similar provisions.

The Series K Preferred Stock will be redeemable at USB’s option, in whole or in part, at any time on or after October 15, 2023 at a redemption price equal to $25,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends.

In addition, within 90 days following the occurrence of a Regulatory Capital Treatment Event, USB, at its option, subject to the approval of the Appropriate Federal Banking Agency, may redeem, at any time, all (but not less than all) of the shares of Series K Preferred Stock at the time outstanding, at a redemption price equal to $25,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends. For purposes of the Series K Preferred Stock, “Regulatory Capital Treatment Event” means the good faith determination by USB that, as a result of (i) any amendment to, or change in, the laws or regulations of the United States or any political subdivision of or in the United States that is enacted or becomes effective after the initial issuance of any share of Series K Preferred Stock, (ii) any proposed change in those laws or regulations that is announced after the initial issuance of any share of Series K Preferred Stock, or (iii) any official administrative decision or judicial decision or administrative action or other official pronouncement interpreting or applying those laws or regulations that is announced after the initial issuance of any share of Series K Preferred Stock, there is more than an insubstantial risk that USB will not be entitled to treat the full liquidation value of the shares of Series K Preferred Stock then outstanding as “additional tier 1 capital” (or its equivalent) for purposes of the capital adequacy guidelines of the Federal Reserve Board (or, as and if applicable, the capital adequacy guidelines or regulations of any successor Appropriate Federal Banking Agency), as then in effect and applicable, for as long as any share of Series K Preferred Stock is outstanding.

If shares of the Series K Preferred Stock are to be redeemed, the notice of redemption will be given by first class mail to the holders of record of the Series K Preferred Stock to be redeemed, mailed not less than 30 days nor more than 60 days prior to the date fixed for redemption thereof (provided that, if the depositary shares representing the Series K Preferred Stock are held in book-entry form through DTC, USB may give such notice in any manner

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permitted by the DTC). Each notice of redemption will include a statement setting forth: (i) the redemption date, (ii) the number of shares of the Series K Preferred Stock to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder, (iii) the redemption price, (iv) the place or places where the certificates evidencing shares of Series K Preferred Stock are to be surrendered for payment of the redemption price and (v) that dividends on the shares to be redeemed will cease to accrue on the redemption date. If notice of redemption of any shares of Series K Preferred Stock has been duly given and if the funds necessary for such redemption have been set aside by USB for the benefit of the holders of any shares of Series K Preferred Stock so called for redemption, then, on and after the redemption date, dividends will cease to accrue on such shares of Series K Preferred Stock, such shares of Series K Preferred Stock will no longer be deemed outstanding and all rights of the holders of such shares will terminate, except the right to receive the redemption price.

In case of any redemption of only part of the shares of the Series K Preferred Stock at the time outstanding, the shares to be redeemed will be selected either pro rata or in such other manner as USB may determine to be fair and equitable.

Under the Federal Reserve Board’s risk-based capital guidelines applicable to bank holding companies, any redemption of the Series K Preferred Stock is subject to prior approval of the Federal Reserve Board.

Rights Upon Liquidation, Dissolution or Winding Up — In the event of USB’s liquidation, dissolution or winding up, the holders of the Series K Preferred Stock at the time outstanding will be entitled to receive a liquidating distribution in the amount of the liquidation preference of $25,000 per share, plus any authorized, declared and unpaid dividends for the then-current dividend period to the date of liquidation, out of USB’s assets legally available for distribution to USB’s stockholders, before any distribution is made to holders of USB’s Common Stock or any Junior Stock and subject to the rights of the holders of any class or series of securities ranking senior to or on parity with the Series K Preferred Stock upon liquidation and the rights of USB’s depositors and other creditors.

If the amounts available for distribution upon USB’s liquidation, dissolution or winding up are not sufficient to satisfy the full liquidation rights of all the outstanding Series K Preferred Stock and all stock ranking equal to the Series K Preferred Stock, then the holders of each series of Preferred Stock will share ratably in any distribution of assets in proportion to the full respective preferential amount to which they are entitled. After the full amount of the liquidation preference is paid, the holders of Series K Preferred Stock will not be entitled to any further participation in any distribution of USB’s assets.

For such purposes, USB’s consolidation or merger with or into any other entity, the consolidation or merger of any other entity with or into USB, or the sale of all or substantially all of USB’s property or business will not be deemed to constitute USB’s liquidation, dissolution or winding up.

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Voting Rights — Except as provided below, the holders of the Series K Preferred Stock will have no voting rights.

Whenever dividends on any shares of the Series K Preferred Stock or any other class or series of Parity Stock have not been declared and paid for an amount equal to six or more quarterly dividend periods (whether consecutive or not) or their equivalent, the holders of the Series K Preferred Stock (together with holders of any and all other classes of USB’s authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) will be entitled to vote as a single class for the election of a total of two additional members of USB’s board of directors, provided that the election of any such directors will not cause USB to violate the corporate governance requirement of the New York Stock Exchange (or any other exchange on which USB’s securities may be listed) that listed companies must have a majority of independent directors and provided further that USB’s board of directors will at no time include more than two Preferred Directors. In that event, the number of directors on USB’s board of directors will automatically increase by two and, at the request of any holder of Series K Preferred Stock, a special meeting of the holders of Series K Preferred Stock and any other class or series of Preferred Stock that ranks on parity with the Series K Preferred Stock as to payment of dividends and for which dividends have not been paid, will be called for the election of the two directors (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of the stockholders, in which event such election will be held at such next annual or special meeting of stockholders), followed by such election at each subsequent annual meeting. These voting rights will continue until full dividends have been paid regularly on the shares of the Series K Preferred Stock and any other class or series of Preferred Stock that ranks on parity with the Series K Preferred Stock as to payment of dividends for at least four quarterly consecutive dividend periods or their equivalent following the Nonpayment.

If and when full dividends have been regularly paid for at least four consecutive quarterly dividend periods or their equivalent following a Nonpayment on the Series K Preferred Stock and any other class or series of Parity Stock, the holders of the Series K Preferred Stock will be divested of the foregoing voting rights (subject to revesting in the event of each subsequent Nonpayment) and the term of office of each Preferred Director so elected will terminate and the number of directors on USB’s board of directors will automatically decrease by two. Any Preferred Director may be removed at any time without cause by the holders of record of a majority of the outstanding shares of the Series K Preferred Stock (together with holders of any and all other classes of USB’s authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) when they have the voting rights described above. So long as a Nonpayment continues, any vacancy in the office of a Preferred Director (other than prior to the initial election of the Preferred Directors) may be filled by the written consent of the Preferred Director remaining in office, or if none remains in office, by a vote of the holders of the outstanding shares of Series K Preferred Stock (together with holders of any and all other class of USB’s authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) to serve until the next annual meeting of stockholders. The Preferred Directors will each be entitled to one vote per director on any matter.

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If the holders of Series K Preferred Stock become entitled to vote for the election of directors, the Series K Preferred Stock may be considered a class of voting securities under interpretations adopted by the Federal Reserve Board. As a result, certain holders of the Series K Preferred Stock may become subject to regulations under the Bank Holding Company Act and/or certain acquisitions of the Series K Preferred Stock may be subject to prior approval by the Federal Reserve Board.

So long as any shares of Series K Preferred Stock remain outstanding:

• the affirmative vote or consent of the holders of at least two-thirds of all of the shares of the Series K Preferred Stock and all other Parity Stock at the time outstanding, voting as a single class without regard to series, will be required to issue, authorize or increase the authorized amount of, or to issue or authorize any obligation or security convertible into or evidencing the right to purchase, any class or series of stock ranking senior to the Series K Preferred Stock and all other parity stock with respect to payment of dividends or the distribution of assets upon USB’s liquidation, dissolution or winding up; and

• the affirmative vote or consent of the holders of at least two-thirds of all of the shares of the Series K Preferred Stock at the time outstanding, voting separately as a class, will be required to amend the provisions of USB’s Certificate of Incorporation or the Certificate of Designations of the Series K Preferred Stock or any other series of Preferred Stock so as to materially and adversely affect the powers, preferences, privileges or rights of the Series K Preferred Stock, taken as a whole; provided, however, that any increase in the amount of the authorized or issued Series K Preferred Stock or authorized Preferred Stock or the creation and issuance, or an increase in the authorized or issued amount, of other series of Preferred Stock and/or Junior Stock will not be deemed to adversely affect the powers, preferences, privileges or rights of the Series K Preferred Stock.

The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required will be effected, all outstanding shares of Series K Preferred Stock have been redeemed or called for redemption upon proper notice and sufficient funds have been set aside by USB for the benefit of the holders of the Series K Preferred Stock to effect such redemption.

Description of Depositary Shares

In this “Description of Capital Stock,” references to “holders” of depositary shares mean those who own depositary shares registered in their own names, on the books that USB or the depositary maintain for this purpose, and not indirect holders who own beneficial interests in depositary shares registered in street name or issued in book-entry form through DTC.

This “Description of Capital Stock” summarizes specific terms and provisions of the depositary shares relating to USB’s outstanding series of Preferred Stock. As described above, all of USB’s outstanding series of Preferred Stock were offered as fractional interests in such shares of Preferred Stock in the form of depositary shares. Each depositary share represents a

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fractional ownership interest in a share of Preferred Stock, and will be evidenced by a depositary receipt. The shares of each series of Preferred Stock represented by depositary shares have been deposited under a deposit agreement among USB, U.S. Bank National Association, as depositary, and the holders from time to time of the depositary receipts evidencing the depositary shares. Subject to the terms of the deposit agreement, each holder of a depositary share will be entitled, through the depositary, in proportion to the applicable fraction of a share of Preferred Stock represented by such depositary share, to all the rights and preferences of the applicable series of Preferred Stock represented thereby (including dividend, voting, redemption and liquidation rights).

The depositary will distribute any cash dividends or other cash distributions received in respect of the deposited Preferred Stock to the record holders of depositary shares relating to the underlying Preferred Stock in proportion to the number of depositary shares held by the holders. The depositary will distribute any property received by it other than cash to the record holders of depositary shares entitled to those distributions, unless it determines that the distribution cannot be made proportionally among those holders or that it is not feasible to make a distribution. In that event, the depositary may, with USB’s approval, sell the property and distribute the net proceeds from the sale to the holders of the depositary shares in proportion to the number of depositary shares they hold. Record dates for the payment of dividends and other matters relating to the depositary shares will be the same as the corresponding record dates for the applicable series of Preferred Stock. The amounts distributed to holders of depositary shares will be reduced by any amounts required to be withheld by the depositary or by USB on account of taxes or other governmental charges.

If USB redeems any shares of Preferred Stock represented by depositary shares, the corresponding depositary shares will be redeemed from the proceeds received by the depositary resulting from the redemption of the Preferred Stock held by the depositary. The redemption price per depositary share will be equal to the fraction of the share of Preferred Stock represented by the depositary share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends. Whenever USB redeems shares of Preferred Stock held by the depositary, the depositary will redeem, as of the same redemption date, the number of depositary shares representing the shares of Preferred Stock so redeemed. In case of any redemption of less than all of the outstanding depositary shares, the depositary shares to be redeemed will be selected by the depositary pro rata or in such other manner determined by the depositary to be equitable. In any such case, USB will redeem depositary shares only in increments equal to the denominator of the fraction of the share of Preferred Stock represented by one depositary share.

When the depositary receives notice of any meeting at which the holders of the applicable series of Preferred Stock are entitled to vote, the depositary will mail the information contained in the notice to the record holders of the depositary shares relating to such Preferred Stock. Each record holder of the depositary shares on the record date, which will be the same date as the record date for the applicable series of Preferred Stock, may instruct the depositary to vote the amount of the Preferred Stock represented by the holder’s depositary shares. To the extent possible, the depositary will vote the amount of the Preferred Stock represented by depositary shares in accordance with the instructions it receives. USB will agree to take all reasonable actions that the depositary determines are necessary to enable the depositary to vote as instructed. If the depositary does not receive specific instructions from the holders of any depositary shares, it will vote all depositary shares of that series held by it proportionately with instructions received.

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Anti-Takeover Provisions

Provisions of federal banking law, the Delaware General Corporation Law (the “DGCL”) and USB’s Certificate of Incorporation and Bylaws described below may be deemed to have an anti-takeover effect and, together with the ability of USB’s board of directors to issue shares of Preferred Stock and to set the voting rights, preferences and other terms of Preferred Stock, may discourage, delay or prevent takeover attempts not first approved by USB’s board of directors. These provisions also could discourage, delay or prevent the removal of incumbent directors or the assumption of control by stockholders. USB believes that these provisions are appropriate to protect its interests and USB’s stockholders.

Restrictions on Ownership. The Bank Holding Company Act requires any “bank holding company” (as defined in the Bank Holding Company Act) to obtain the approval of the Federal Reserve Board prior to acquiring more than five percent (5%) of USB’s outstanding Common Stock. Any person, other than a bank holding company, is required to obtain prior approval of the Federal Reserve Board to acquire ten percent (10%) or more of USB’s outstanding Common Stock under the Change in Bank Control Act. Any holder of twenty-five percent (25%) or more of USB’s outstanding Common Stock, other than an individual, is subject to regulation as a bank holding company, under the Bank Holding Company Act.

Stockholder Action by Written Consent. USB’s Certificate of Incorporation authorizes action by the stockholders of USB only pursuant to a meeting and not by a written consent.

Special Meetings of Stockholders. USB’s Bylaws provide that special meetings of stockholders may be called only by USB’s board of directors, USB’s chief executive officer or by USB’s secretary at the written request (a “Special Meeting Request”) of holders of record of at least 25% of the voting power of the outstanding stock of USB entitled to vote on the matter or matters to be brought before the proposed special meeting (the “Requisite Percentage”) (such percentage to be based on the number of outstanding voting shares of USB most recently disclosed prior to the date of the request for the special meeting by USB in its filings with the Securities and Exchange Commission (the “SEC”)). A Special Meeting Request must be signed by each stockholder requesting the special meeting (each, a “Requesting Stockholder”) and must be accompanied by a notice setting forth the information specified in USB’s Bylaws. Requesting Stockholders who collectively hold at least the Requisite Percentage on the date the Special Meeting Request is submitted to USB’s secretary must: (i) continue to hold at least the number of shares of stock set forth in the Special Meeting Request with respect to each such Requesting Stockholder through the date of the special meeting; and (ii) submit a written certification (an “Ownership Certification”) confirming the continuation of such holdings on the business day immediately preceding the special meeting, which Ownership Certification must include the information specified in USB’s Bylaws.

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A special meeting requested by stockholders will not be held if: (i) the Special Meeting Request does not comply with the substantive and procedural requirements of the Certificate of Incorporation; (ii) the Special Meeting Request relates to an item of business that is not a proper subject for stockholder action under applicable law; (iii) the Special Meeting Request is received by USB during the period commencing 90 days prior to the first anniversary of the date of the immediately preceding annual meeting of stockholders and ending on the date of the next annual meeting; (iv) an annual or special meeting of stockholders that included a substantially similar item of business (“Similar Business”) (as determined in good faith by USB’s board of directors) was held not more than 120 days before the Special Meeting Request was received by USB’s secretary; provided, however, that this clause (iv) does not apply if a material corporate event relating to the item of business has occurred since the date of such prior annual or special meeting; (v) two or more special meetings of stockholders called pursuant to the request of stockholders have been held within the 12-month period before the Special Meeting Request was received by the secretary; (vi) USB’s board of directors has called or calls for an annual or special meeting of stockholders to be held within 90 days after the Special Meeting Request is received by USB’s secretary, and USB’s board of directors determines in good faith that the business to be conducted at such meeting includes the Similar Business; or (vii) such Special Meeting Request was made in a manner that involved a violation of the proxy rules of the SEC or other applicable law.

Advance Notice to Nominate Directors. Nominations of persons for election as directors at a meeting of stockholders called for the purpose of electing directors may be made: (i) as specified in the notice of meeting (or any supplement thereto) given by or at the direction of USB’s board of directors, including nominations made as described below under “—Stockholder Nominations Included in USB’s Proxy Materials” or nominations to be made pursuant to a Special Meeting Request; or (ii) by any stockholder in the following manner.

For any nomination to be properly made by a stockholder, other than nominations described below under “—Stockholder Nominations Included in USB’s Proxy Materials” or nominations to be made pursuant to a Special Meeting Request, the stockholder must: (i) be a stockholder of record both at the time of giving of the notice referred to in the following clause and at the time of the meeting of stockholders called for the purpose of electing directors and be entitled to vote at such meeting; and (ii) give written notice to USB’s secretary so as to be received at USB’s principal executive offices not less than (A) with respect to an annual meeting of stockholders, 120 days in advance of the date of USB’s previous year’s annual meeting of stockholders, except that if no annual meeting was held in the previous year or the date of the annual meeting has been changed by more than 30 days from the date contemplated at the time of the previous year’s proxy statement, such notice must be so received by the later of: (1) the close of business on the date 90 days prior to the meeting date; or (2) the close of business on the tenth day following the date on which such meeting date is first publicly announced or disclosed; and (B) with respect to a special meeting of stockholders for the election of directors, the close of business on the seventh day following the date on which the notice of such meeting is first given to stockholders.

The required notice must contain the information specified in USB’s Bylaws. To be eligible as a nominee for election or reelection as a director, an individual must deliver (in accordance with the time periods prescribed for delivery of notice under USB’s Bylaws) to USB’s secretary at USB’s principal executive offices a completed written questionnaire with respect to the matters specified in USB’s Bylaws and a written representation and agreement as to the matters specified in USB’s Bylaws.

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Stockholder Nominations Included in USB’s Proxy Materials. If expressly requested in a Nomination Notice (as defined below), USB will, subject to certain exceptions specified in USB’s Bylaws, include in its proxy statement for any annual meeting of stockholders specified information regarding person(s) nominated for election (the “Nominee(s)”) by a Nominating Stockholder (as defined below), including any statement included in support of the election of the Nominee(s) to the board by the Nominating Stockholder in the Nomination Notice for inclusion in the proxy statement and other information that USB or its board of directors determines, in their discretion, to include in the proxy statement relating to the nomination of the Nominee(s), including a statement in opposition to the nomination. Any Nominee(s) will also be included on USB’s form of proxy and ballot.

A Nomination Notice may only be submitted by an Eligible Holder (as defined below) or group of up to 20 Eligible Holders that has (individually and collectively, in the case of a group) satisfied, as determined by USB’s board of directors, all applicable conditions and complied with all applicable procedures set forth in USB’s Bylaws (such Eligible Holder or group of Eligible Holders being a “Nominating Stockholder”), including those described below.

USB is not be required to include in the proxy statement for an annual meeting of stockholders more Nominees than that number of directors constituting the greater of (A) two and (B) 20% of the total number of USB directors on the last day on which a Nomination Notice may be submitted.

An “Eligible Holder” is a person who has either: (A) been a record holder of the Minimum Number (as defined below) of shares of common stock continuously throughout the three-year period preceding and including the date of submission of the Nomination Notice, and continues to own at least such shares of common stock through the date of the annual meeting; or (B) provides to the secretary, within the time period specified in USB’s Bylaws, appropriate evidence of continuous ownership of such shares for such three-year period from one or more securities intermediaries.

An Eligible Holder or group of up to 20 Eligible Holders may submit a Nomination Notice only if the person or group (in the aggregate) has continuously owned at least 3% of the number of outstanding shares of common stock as of the most recent date for which such amount is given in any filing by USB with the SEC prior to the submission of the Nomination Notice for the three–year period specified above.

To nominate a Nominee (or Nominees), the Nominating Stockholder must, no earlier than 150 calendar days and no later than 120 calendar days before the anniversary of the date that USB mailed its proxy statement for the prior year’s annual meeting of stockholders, submit to the secretary at USB’s principal executive office a notice (the “Nomination Notice”) containing all of the information and accompanied by the documents specified in USB’s Bylaws; provided, however, that if the annual meeting is not scheduled to be held within a period

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that commences 30 days before such anniversary date and ends 30 days after such anniversary date (an annual meeting date outside such period being referred to herein as an “Other Meeting Date”), the Nomination Notice will be given in the manner provided herein by the later of the close of business on the date that is 180 days prior to such Other Meeting Date or

the tenth day following the date such Other Meeting Date is first publicly announced or disclosed:

Advance Notice of Other Proposals. For business other than a nomination for director to be properly brought before an annual meeting by a stockholder, the stockholder must have given written notice to the secretary so as to be received at USB’s principal executive offices not less than 120 days in advance of the date of USB’s proxy statement released to stockholders in connection with the previous year’s annual meeting of stockholders, except that if no annual meeting was held in the previous year or the date of the annual meeting has been changed by more than 30 days from the date contemplated at the time of the previous year’s proxy statement, such notice must be so received a reasonable time before the solicitation is made. Each such notice must set forth as to each matter the stockholder proposes to bring before the annual meeting the information specified in USB’s Bylaws.

DESCRIPTION OF NOTES

The following description of the 0.850% Medium-Term Notes, Series X (Senior), due June 7, 2024 (the “Notes”) of USB was provided in the pricing supplement dated May 31, 2017 and filed with the Securities and Exchange Commission (the “Commission”) on June 1, 2017, and USB’s pricing supplement dated November 22, 2019 and filed with the Commission on November 22, 2019. The following description is qualified by reference to such pricing supplements and the description of the general terms and provisions of the Notes set forth in (i) USB’s prospectus dated April 21, 2017 and filed with the Commission on April 21, 2017 and (ii) USB’s prospectus supplement dated April 21, 2017 and filed with the Commission on April 21, 2017. The following description of specified provisions of the senior indenture, dated as of October 3, 1991, as amended by a first supplemental indenture, dated as of April 21, 2017, and as further amended or supplemented from time to time (the “Indenture”), between USB and Citibank, N.A., as trustee, and the Notes is qualified by reference to the actual provisions of the Indenture, including the definitions contained in the Indenture of some of the terms used below, and the Notes, copies of which are incorporated by reference as exhibits to USB’s Annual Report on Form 10-K.

The Notes are a tranche of USB’s Medium-Term Notes, Series X (Senior). As of December 31, 2019, the outstanding aggregate principal amount of the Notes was €1,175,000,000.

The Notes were issued in minimum denominations of €100,000 and integral multiples of €1,000 in excess thereof.

USB may from time to time, without giving notice to or seeking the consent of the holders of the Notes, issue additional debt securities having the same terms (except for the issue date, the offering price and, if applicable, the first interest payment date) and ranking equally and ratably with the Notes. Any such additional debt securities having such similar terms, together with the Notes, will constitute a single series of debt securities for all purposes under the Indenture, including, without limitation, waivers, amendments and redemptions.

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The Notes are USB’s general unsecured and unsubordinated obligations, rank equally with all of USB’s existing and future unsecured and unsubordinated indebtedness from time to time outstanding and are considered part of the same series of notes as any of USB’s other Medium-Term Notes, Series X (Senior), previously issued or issued in the future. The Notes will not be subject to any sinking fund provisions and will not be convertible into or exchangeable for any of USB’s equity interests.

The Notes are listed on the New York Stock Exchange under the symbol “USB24B”.

Interest and Principal Payments

The entire principal amount of the Notes will mature and become payable, together with unpaid interest, if any, accrued thereon on June 7, 2024 (the “Stated Maturity Date”) unless redeemed earlier as described below under “— Redemption for Tax Reasons.” The principal of each Note payable at maturity or earlier redemption, together with unpaid interest, if any, will be paid in euro against presentation and surrender at the office or agency maintained for such purpose.

The Notes bear interest at a rate of 0.850% per year. Interest on the Notes is payable annually in arrears on June 7 (each an “Interest Payment Date”). Interest payable on an Interest Payment Date will be paid to the persons in whose names the Notes are registered at the close of business on the regular record date; provided, however, that interest payable at the Stated Maturity Date or earlier redemption date will be payable to the person to whom principal shall be payable. The regular record date for the Notes will be May 23, whether or not a Business Day, immediately preceding the related Interest Payment Date; provided, however, that so long as the relevant global note is held by or on behalf of a common depositary for Euroclear Bank SA/NV (“Euroclear”), Clearstream Banking, S.A. (“Clearstream”) or any other clearing system, “record date” shall be a day when Euroclear, Clearstream or such other clearing system, as the case may be, is open for business. Interest payable on an Interest Payment Date will be computed on the basis of an Actual/Actual (ICMA) (as defined in the rulebook of the International Capital Market Association) day count convention.

If any Interest Payment Date, the Stated Maturity Date or earlier redemption date falls on a day that is not a Business Day, the related payment of principal, premium, if any, or interest will be made on the next succeeding Business Day as if made on the date the applicable payment was due, and no interest will accrue on the amount so payable for the period from and after such Interest Payment Date, the Stated Maturity Date or such redemption date, as the case may be, to the date of such payment on the next succeeding Business Day. For purposes of the Notes, “Business Day” means any day, other than a Saturday or Sunday, (i) which is not a day on which banking institutions in The City of New York or London are authorized or required by law, regulation or executive order to close and (ii) on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET 2) system (the TARGET 2 system) or any successor thereto, is open.

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So long as the relevant global note is held on behalf of Euroclear, Clearstream or any other clearing system, notices to holders of Notes represented by the global note may be given by delivery of the relevant notice to Euroclear, Clearstream or such other clearing system, as the case may be.

Currency of Payment

Principal, premium, if any, and interest payments in respect of the Notes, including any payments made upon any redemption of the Notes, will be payable in euro.

If the euro is unavailable in USB’s good faith judgment for the payment of principal, premium, if any, or interest with respect to the Notes, including any payments made upon any redemption of the Notes, due to the imposition of exchange controls or other circumstances beyond USB’s control, is no longer used by the member states of the European Monetary Union that have adopted the euro as their currency or is no longer used for the settlement of transactions by public institutions of or within the international banking community (and is not replaced by another currency), USB is entitled to satisfy its obligations to holders of the Notes by making that payment in U.S. dollars on the basis of the Market Exchange Rate as computed by the exchange rate agent on the second Business Day before that payment is due, or if such Market Exchange Rate is not then available, on the basis of the most recently available Market Exchange Rate on or before the date that payment is due or as otherwise determined by USB in good faith, if the foregoing is impracticable. Any payment in respect of the Notes so made in U.S. dollars will not constitute a default under the Indenture. Neither the trustee nor the paying agent shall be responsible for obtaining exchange rates, effecting conversions or otherwise handling redenominations.

The “Market Exchange Rate” means the noon buying rate in The City of New York for cable transfers of euros as certified for customs purposes (or, if not so certified, as otherwise determined) by the Federal Reserve Bank of New York.

In the event that the euro is no longer used by the member states of the European Monetary Union that have adopted the euro as their currency or an official redenomination of the euro, USB’s obligations with respect to payments on the Notes shall, in all cases, be regarded immediately following such redenomination as providing for the payment of that amount of euros representing the amount of such obligations immediately before such redenomination. The Notes do not provide for any adjustment to any amount payable under the Notes as a result of any change in the value of the euro relative to any other currency due solely to fluctuations in exchange rates.

All determinations referred to above made by the exchange rate agent will be at its sole discretion and will, in the absence of clear error, be conclusive for all purposes and binding on the holders of the Notes.

Payment of Additional Amounts

USB will, subject to the exceptions and limitations set forth below, pay as additional interest such additional amounts (“Additional Amounts”) as are necessary in order that the net amount of such payment of the principal of and interest on a Note to a holder who is a U.S. Alien (as such term is defined below), after deduction for any present or future tax, assessment or

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governmental charge of (a) the United States (as such term is defined below), or a political subdivision or authority thereof or therein or (b) any other jurisdiction in which any paying agent appointed by USB is organized or the location from which payment is made, or any political subdivision or authority thereof (each of (a) and (b), a “Relevant Jurisdiction”), imposed by withholding with respect to the payment, will not be less than the amount provided for in such Note to be then due and payable. However, the foregoing obligation to pay Additional Amounts shall not apply:

• to any tax, assessment or governmental charge that would not have been so imposed but for the existence of any present or former connection between such holder (or between a fiduciary, settlor, beneficiary, member or shareholder of, or holder of power over, such holder, if such holder is an estate, trust, partnership or corporation) and a Relevant Jurisdiction, including, without limitation, such holder (or such fiduciary, settlor, beneficiary, member, shareholder or holder of a power) being considered as:

• being or having been present or engaged in a trade or business in the Relevant Jurisdiction or having had a permanent establishment therein;

• having a current or former relationship with the Relevant Jurisdiction, including a relationship as a citizen or resident or being treated as a resident thereof; or

• being or having been, for United States federal income tax purposes, a “controlled foreign corporation,” a “passive foreign investment company” (including a qualified electing fund), a corporation that has accumulated earnings to avoid United States federal income tax or a private foundation or other tax-exempt organization;

• to any tax, assessment or other governmental charge imposed by reason of the holder (i) owning or having owned, directly or indirectly, actually or constructively, 10% or more of the total combined voting power of all classes of stock of USB entitled to vote, (ii) receiving interest described in Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the “Code”) or (iii) being a controlled foreign corporation with respect to the United States that is related to USB by actual or constructive stock ownership;

• to any holder who is a fiduciary or partnership or other than the sole beneficial owner of the Note, but only to the extent that a beneficiary or settlor with respect to such fiduciary or member of such partnership or a beneficial owner of the Note would not have been entitled to the payment of such Additional Amounts had such beneficiary, settlor, member or beneficial owner been the holder of such Note;

• to any tax, assessment or governmental charge that would not have been imposed or withheld but for the failure of the holder to comply with certification, identification or information reporting requirements under the Relevant Jurisdiction’s income tax laws, without regard to any tax treaty, with respect to the payment, concerning the nationality, residence, identity or connection with the Relevant Jurisdiction of the holder or a beneficial owner of such Note, if such compliance is required by the Relevant Jurisdiction’s income tax laws, without regard to any tax treaty, as a precondition to relief or exemption from such tax, assessment or governmental charge;

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• to any tax, assessment or governmental charge that would not have been so imposed or withheld but for the presentation by the holder of such Note for payment on a date more than 30 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later;

• to any estate, inheritance, gift, sales, transfer, excise, wealth or personal property tax or any similar tax, assessment or governmental charge;

• to any tax, assessment or governmental charge that is payable otherwise than by withholding by USB or the paying agent from the payment of the principal of or interest on such Note;

• to any tax, assessment or governmental charge required to be withheld by any paying agent from such payment of principal of or interest on any Note, if such payment can be made without such withholding by any other paying agent;

• to any withholding or deduction on or in respect of any Note pursuant to sections 1471 through 1474 of the Code, and the regulations, administrative guidance and official interpretations promulgated thereunder (“FATCA”), any agreement between USB and the United States or any authority thereof entered into for FATCA purposes or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of FATCA; or

• to any tax imposed as a result of any combination of the above.

The term “United States” means the United States of America, the States thereof (including the District of Columbia) and any other political subdivision or taxing authority thereof or therein affecting taxation, and the term “U.S. Alien” means any beneficial owner of a Note other than a beneficial owner of a Note that is (A) a citizen or resident of the United States; (B) a corporation, partnership or other entity treated as a corporation or a partnership for U.S. federal income tax purposes created or organized in or under the laws of the United States, any of its states or the District of Columbia; (C) an estate whose income is subject to U.S. federal income tax regardless of its source; or (D) a trust which is subject to the supervision of a court within the United States and the control of one or more United States persons as described in Section 7701(a)(30) of the Code or that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.

Redemption for Tax Reasons

If USB has or will become obliged to pay Additional Amounts as a result of any change in, or amendment to, the laws or regulations of a Relevant Jurisdiction affecting taxation, or any change in official position regarding the application or interpretation of such laws, regulations or rulings, which change or amendment becomes effective on or after June 7, 2017, and USB

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determines that such obligation cannot be avoided by the use of reasonable measures then available to it, USB may, at its option, at any time, having given not less than 10 nor more than 60 days’ prior written notice to holders of the Notes, redeem, in whole, but not in part, the Notes at a redemption price equal to 100% of their principal amount, together with unpaid interest, if any, on the Notes accrued to, but excluding, the redemption date, provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which USB would be obliged to pay such Additional Amounts if a payment in respect to the Notes were due on such date. Prior to the transmission or publication of any notice of redemption pursuant to this paragraph, USB will deliver to the trustee an officer’s certificate stating that it is entitled to effect such redemption and setting forth a statement of facts and including a written opinion of independent counsel selected by USB showing that the conditions precedent to its right to so redeem the Notes has occurred.

Restrictive Covenants

Subject to the provisions described under the section “—Consolidation, Merger and Sale of Assets,” the Indenture prohibits:

• the issue, sale or other disposition of shares of or securities convertible into, or options, warrants or rights to subscribe for or purchase shares of, voting stock of a principal subsidiary bank;

• the merger or consolidation of a principal subsidiary bank with or into any other corporation; or

• the sale or other disposition of all or substantially all of the assets of a principal subsidiary bank,

if, after giving effect to the transaction and issuing the maximum number of shares of voting stock that can be issued after the conversion or exercise of the convertible securities, options, warrants or rights, USB would own, directly or indirectly, 80% or less of the shares of voting stock of the principal subsidiary bank or of the successor bank or the bank which acquires the assets.

In the Indenture, USB also agreed that it will not create, assume, incur or cause to exist any pledge, encumbrance or lien, as security for indebtedness for money borrowed on:

• any shares of or securities convertible into voting stock of a principal subsidiary bank that USB owns directly or indirectly; or

• options, warrants or rights to subscribe for or purchase shares of, voting stock of a principal subsidiary bank that USB owns directly or indirectly,

without providing that the senior debt securities of all series, including the Notes, will be equally secured if, after treating the pledge, encumbrance or lien as a transfer to the secured party, and after giving effect to the issuance of the maximum number of shares of voting stock issuable after conversion or exercise of the convertible securities, options, warrants or rights, USB would own, directly or indirectly 80% or less of the shares of voting stock of the principal subsidiary bank.

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The Indenture defines the term “principal subsidiary bank” as U.S. Bank National Association.

The Indenture does not contain covenants specifically designed to protect holders from a highly leveraged transaction in which USB is involved.

Events of Default

The only events that constitute events of default under the Indenture with respect to the Notes are:

• USB’s failure to pay any interest on any Note when due, which failure continues for 30 days;

• USB’s failure to pay any principal of or premium on any Note when due;

• USB’s failure to make any sinking fund payment, when due, for any Note, if applicable;

• USB’s failure to perform any other covenant in the Indenture (other than a covenant included in the Indenture solely for the benefit of a series of senior debt securities other than the Notes), which failure continues for 60 days after written notice;

• default in the payment of indebtedness for money borrowed under any indenture or instrument under which USB has or a principal subsidiary bank has outstanding indebtedness in an amount in excess of $5,000,000 which has become due and has not been paid, or whose maturity has been accelerated and the default has not been cured or acceleration annulled within 60 days after written notice; and

• some events of bankruptcy, insolvency or reorganization which involve USB or a principal subsidiary bank.

If an event of default occurs and is continuing on any Notes outstanding under the Indenture, then the trustee or the holders of at least 25% in aggregate principal amount of the outstanding Notes may declare the principal amount (or, if any of the Notes are original issue discount notes, the amount payable at acceleration of maturity of such Notes to such holders) of all of the Notes to be due and payable immediately, by notice as provided in the Indenture. At any time after a declaration of acceleration has been made on the Notes, but before the trustee has obtained a judgment for payment, the holders of a majority in aggregate principal amount of the outstanding Notes may, under some circumstances, rescind and annul this acceleration.

Subject to provisions in the Indenture relating to the duties of the trustee during a default, the trustee will not be under any obligation to exercise any of its rights or powers under the Indenture at the request or direction of any of the holders of any Notes then outstanding under

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the Indenture, unless the holders offer to the trustee reasonable indemnity. The holders of a majority in aggregate principal amount of the outstanding Notes will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee for such series, or exercising any trust or power conferred on such trustee.

USB must furnish to the trustee, annually, a statement regarding its performance on some of its obligations under the Indenture and any default in its performance.

Modification and Waiver

Except as otherwise specifically provided in the Indenture, modifications and amendments of the Indenture generally will be permitted only with the consent of the holders of at least a majority in aggregate principal amount of the outstanding Notes affected by the modification or amendment. However, none of the following modifications are effective against any holder without the consent of the holders of each outstanding Note affected by the modification or amendment:

• changing the stated maturity of the principal of or any installment of principal or interest on any debt security;

• reducing the principal amount of, or premium or interest on any debt security;

• changing any of USB’s obligations to pay additional amounts;

• reducing the amount of principal of an original issue discount debt security that would be due and payable at declaration of acceleration of its maturity;

• changing the place for payment where, or coin or currency in which, any principal of, or premium or interest on, any debt security is payable;

• impairing the right to take legal action to enforce any payment of or related to any debt security;

• reducing the percentage in principal amount of outstanding debt securities of any series required to modify, amend, or waive compliance with some provisions of the Indenture or to waive some defaults; or

• modifying any of the above provisions.

The holders of at least a majority in aggregate principal amount of the outstanding Notes can waive, as far as that series is concerned, USB’s compliance with some restrictive provisions of the Indenture.

The holders of at least a majority in aggregate principal amount of the outstanding Notes may waive any past default under the Indenture, except:

• a default in the payment of principal of, or premium, or interest on any senior debt security; or

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• a default in a covenant or provision of the Indenture that cannot be modified or amended without the consent of the holder of each outstanding debt security of the series affected.

The Indenture provides that, in determining whether holders of the requisite principal amount of the outstanding Notes have given any request, demand, authorization, direction, notice, consent or waiver, or whether a quorum is present at a meeting of holders of Notes:

• the principal amount of an original issue discount note considered to be outstanding will be the amount of the principal of that original issue discount debt security that would be due and payable as of the date that the principal is determined at declaration of acceleration of the maturity of that original issue discount note; and

• the principal amount of a note denominated in a foreign currency or currency unit that is deemed to be outstanding will be the U.S. dollar equivalent, determined on the date of original issuance for that note, of the principal amount (or, in the case of an original issue discount note, the U.S. dollar equivalent, determined on the date of original issuance for that debt security, of the amount determined as provided in the bullet point above).

Consolidation, Merger and Sale of Assets

Without the consent of the holders of the outstanding Notes, USB cannot consolidate with or merge into another corporation, partnership or trust, or convey, transfer or lease substantially all of its properties and its assets, to a corporation, partnership or trust organized or validly existing under the laws of any domestic jurisdiction unless:

• the successor entity assumes USB’s obligations on the Notes and under the Indenture;

• immediately after the transaction, USB would not be in default under the Indenture and no event which, after notice or the lapse of time, would become an event of default under the Indenture, shall have occurred and be continuing; and

• other conditions are met.

Trustee, Paying Agent and Exchange Rate Agent

The Trustee for the Notes is Citibank, N.A. USB has designated Elavon Financial Services DAC as its paying agent and U.S. Bank Trust National Association as its exchange rate agent for the Notes.

Governing Law

The Indenture is, and the Notes are, governed by, and construed in accordance with, the laws of the State of New York.

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Book-Entry Delivery and Settlement

The Notes were issued in the form of one or more global notes in fully registered form, without coupons, and were deposited with, or on behalf of, a common depositary for, and in respect of interests held through, Euroclear and Clearstream. Except as described herein, certificates will not be issued in exchange for beneficial interests in the global notes.

Exchange of Global Notes for Certificated Notes

Subject to certain conditions, the Notes represented by the global notes are exchangeable for notes in definitive form of like tenor in minimum denominations of €100,000 principal amount and multiples of €1,000 in excess thereof if:

• Clearstream, Euroclear or any successor thereto notifies USB that it is unwilling to act as a clearing system for the Notes;

• USB, at its option, notifies the trustee in writing that it elects to cause the issuance of certificated notes; or

• there has occurred and is continuing an event of default with respect to the Notes.

In all cases, definitive notes delivered in exchange for any global note or beneficial interest therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of the common depositary (in accordance with its customary procedures).

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EX-10.36

Exhibit 10.36

U.S. BANCORP

PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT

THIS AGREEMENT is made as of <Grant Date> (the “Grant Date”), by and between U.S. Bancorp (the “Company”) and <Participant Name> (the “Participant”), together with the Completed Exhibit A which is incorporated herein by reference (collectively, the “Agreement”), sets forth the terms and conditions of a performance restricted stock unit award representing the right to receive <Number of Target Awards Granted> shares of common stock of the Company, par value $0.01 per share (the “Common Stock”). The grant of this performance restricted stock unit award is made pursuant to the Company’s 2015 Stock Incentive Plan, which was approved by shareholders on April 21, 2015 (the “Plan”) and is subject to its terms. Capitalized terms that are not defined in the Agreement shall have the meaning ascribed to such terms in the Plan.

The Company and Participant agree as follows:

1. Award

Subject to the terms and conditions of the Plan and the Agreement, the Company grants to Participant a performance restricted stock unit award (the “Units”) entitling Participant to <Number of Target Awards Granted> performance restricted stock units (such number of units, the “Target Award Number”). The Target Award Number shall be adjusted upward or downward as provided in the Completed Exhibit A. The number of Units that Participant will receive under the Agreement, after giving effect to such adjustment, is referred to herein as the “Final Award Number.” Each Unit represents the right to receive one share of Common Stock, subject to the vesting requirements and distribution provisions of the Agreement and the terms of the Plan. The shares of Common Stock distributable to Participant with respect to the Units granted hereunder are referred to as the “Shares.” The Completed Exhibit A sets forth (a) the performance period over which the Final Award Number will be determined (the “Performance Period”), and (b) the date on which the Final Award Number will be determined (the “Determination Date”).

2. Vesting; Forfeiture

(a) Time-Based Vesting Conditions. Subject to the terms and conditions of the Agreement, if the Participant remains continuously employed by the Company or an Affiliate of the Company through the Scheduled Vesting Date as set forth in Exhibit A, the number of Units equal to the Final Award Number shall become vested on the Scheduled Vesting Date and will be settled and Shares delivered in accordance with Section 3. Except as otherwise provided in the Agreement, if Participant ceases to be an employee of the Company and its Affiliates prior to the Scheduled Vesting Date, all Units that have not become vested previously shall be immediately and irrevocably forfeited. Units that have not become vested previously may also be forfeited if Participant has not complied with the terms of any confidentiality and non-solicitation agreement between the Company or an Affiliate and the Participant at all times since the Grant Date.

(b) Continued Vesting Upon Separation From Service Due to Retirement or Disability. Notwithstanding Section 2(a), if Participant has a Separation From Service (as defined in Section 10) with the Company or any Affiliate by reason of Retirement (as defined in Section 10) or Disability (as defined in Section 10), prior to the Scheduled Vesting Date, and provided such Separation From Service is not a Qualifying Termination (as defined in Section 10), the Units shall not be forfeited, but rather, the Final Award Number will be determined in accordance with Section 1 and the Units shall continue to vest on the Scheduled Vesting Date subject to the terms of the Agreement, including Section 2(e) hereof, and provided that Participant has at all times since the Grant Date complied with the terms of any confidentiality and non-solicitation agreement between the Company or an Affiliate and the Participant.

(c) Acceleration of Vesting Upon Death. If Participant ceases to be an employee by reason of death, or if Participant dies after a Separation From Service by reason of Retirement or Disability, prior to the Scheduled Vesting Date, then the Units will become vested in accordance with this Section 2(c). If such death occurs prior to the last day of the Performance Period, a number of Units equal to the Target Award Number will vest upon Participant’s death. If the death occurs on or after the last day of the Performance Period, then a number of Units equal to the Final Award Number will vest and be distributed to the Participant in accordance with Section 3(d). Notwithstanding the foregoing, such vesting is subject to the terms of the Agreement, including Section 2(e) hereof, and provided the Participant has at all times since the Grant Date complied with the terms of any confidentiality and non-solicitation agreement between the Company or an Affiliate and the Participant.

(d) Acceleration of Vesting Following a Qualifying Termination. Notwithstanding the vesting provisions contained in Sections 2(a) and 2(b) above, but subject to the other terms and conditions of the Agreement, if Participant experiences a Qualifying Termination prior to the Scheduled Vesting Date, then the Units will become vested in accordance with this Section 2(d). If the Qualifying Termination occurs prior to the last day of the Performance Period, a number of Units equal to the Target Award Number will vest upon Participant’s Qualifying Termination. If the Qualifying Termination occurs on or after the last date of the Performance Period, then a number of Units equal to the Final Award Number will vest and be distributed to the Participant in accordance with Section 3(b). Notwithstanding the foregoing, such accelerated vesting is subject to the terms of the Agreement, including Section 2(e) hereof, and provided that the Participant has at all times since the Grant Date complied with the terms of any confidentiality and non-solicitation agreement between the Company or an Affiliate and the Participant. Notwithstanding the foregoing, if in connection with a Change in Control the Units are adjusted, or units in the acquiring or surviving entity are substituted for the Units, or the Plan is terminated, in each case as permitted under the Plan and in accordance with Section 409A, then the terms of such adjustment, substitution or plan termination will govern the treatment of the Units.

(e) Special Risk-Related Cancellation Provisions. Notwithstanding any other provision of the Agreement, if at any time subsequent to the Grant Date the Committee determines, in its sole discretion, that Participant has subjected the Company to significant financial, reputational, or other risk by (i) failing to comply with Company policies and procedures, including the Code of Ethics and Business Conduct, (ii) violating any law or regulation, (iii) engaging in negligence or willful misconduct, or (iv) engaging in activity resulting in a significant or material control deficiency under the Sarbanes-Oxley Act of 2002, then all or part of the Units granted under the Agreement that have not been settled (and Shares delivered) at the time of such determination may be cancelled. If any Units are cancelled pursuant to this provision, Participant will have no rights with respect to the Units (including, without limitation, any rights to receive a distribution of Shares with respect to the Units and the right to receive Dividend Equivalents).

3. Distribution of Shares with Respect to Units

Subject to the terms of the Agreement, including the restrictions in this Section 3, following the vesting of Units and following the payment of any applicable withholding taxes pursuant to Section 7 hereof, the Company shall cause to be issued and delivered to Participant (including through book entry) Shares registered in the name of Participant or in the name of Participant’s legal representatives, beneficiaries or heirs, as the case may be, as follows:

(a) General Rule. As soon as administratively feasible following the Scheduled Vesting Date (but in no event later than December 31^st of the year in which such Scheduled Vesting Date occurs), all Shares issuable pursuant to Units that become vested in accordance with Sections 2(a) through 2(c) hereof shall be distributed to Participant, or in the event of Participant’s death, to the representatives of Participant or to any Person to whom the Units have been transferred by will or the applicable laws of descent and distribution.

(b) Qualifying Termination Distributions. As soon as administratively feasible following a Separation From Service in connection with a Qualifying Termination (and in any case no later than 60 days following such Separation From Service except as otherwise provided in this Section 3(b)), all Shares issuable pursuant to Units that become vested in accordance with Sections 2(d) hereof shall be distributed to Participant. Notwithstanding the foregoing, any Shares issuable to a Specified Employee (as defined in Section 10) as a result of a Separation From Service in connection with a Qualifying Termination will not be delivered to such Specified Employee until the date that is six months and one day after the date of the Separation From Service. If in connection with a Change in Control the Units are adjusted, or units in the acquiring or surviving entity are substituted for the Units, or the Plan is terminated, in each case as permitted under the Plan and in accordance with Section 409A, then the terms of such adjustment, substitution or plan termination will govern the treatment of the Units, including the time and manner of settlement of the Units.

(c) Distributions Following Retirement or Disability. If a Participant has a Separation From Service due to Retirement or Disability (so long as such Separation From Service is not in connection with a Qualifying Termination), the distribution of Shares with respect to Units will not be accelerated, and Shares will be distributed as soon as administratively feasible following the applicable Scheduled Vesting Dates (but in no event later than December 31^st of the year in which such Scheduled Vesting Date occurs).

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(d) Distributions Following Death. As soon as administratively feasible following the death of a Participant (but in no event later than 90 days following such death) all Shares issuable pursuant to Units that become vested pursuant to Section 2(c) shall be distributed to the Participant.

In the event that the number of Shares distributable pursuant to this Section 3 is a number that is not a whole number, then the number of Shares distributed shall be rounded down to the nearest whole number.

4. Rights as Shareholder; Dividend Equivalents

Prior to the distribution of Shares with respect to Units pursuant to Section 3 above, Participant shall not have ownership or rights of ownership of any Shares underlying the Units; provided, however, that Participant shall be entitled to accrue cash Dividend Equivalents on outstanding Units (i.e. Units that have not been forfeited, cancelled or settled), whether vested or unvested, if cash dividends on the Common Stock are declared by the Board on or after the Grant Date. Prior to the Determination Date, Participant will accrue cash Dividend Equivalents on Units equal to the Target Award Number. Specifically, when cash dividends are paid with respect to a share of outstanding Common Stock, an amount of cash per Unit equal to the cash dividend paid with respect to a share of outstanding Common Stock will be accrued with respect to each Unit in Participant’s Target Award Number. On the Determination Date, the dollar amount of Participant’s cumulative accrued Dividend Equivalents as of the Determination Date will be multiplied by Participant’s Target Award Number Percentage to determine the amount of cash Dividend Equivalents that will be paid to Participant. Dividend Equivalents will be paid in cash as soon as administratively feasible following the date on which the underlying Units giving rise to the Dividend Equivalents are settled and paid out, but in no event later than December 31^st of the year in which the underlying Units are distributed in accordance with Section 3. The Dividend Equivalents shall be treated as earnings on, and as a separate amount from, the Units for purposes of Section 409A of the Code.

5. Restriction on Transfer

Except for transfers by will or the applicable laws of descent and distribution, the Units cannot be sold, assigned, transferred, gifted, pledged, or in any manner encumbered, alienated, attached or disposed of, and any purported sale, assignment, transfer, gift, pledge, alienation, attachment or encumbrance shall be void and unenforceable against the Company. No such attempt to transfer the Units, whether voluntary or involuntary, by operation of law or otherwise (except by will or laws of descent and distribution), shall vest the purported transferee with any interest or right in or with respect to the Units or the Shares issuable with respect to the Units.

6. Securities Law Compliance

The delivery of all or any of the Shares in accordance with this Award shall be effective only at such time that the issuance of such Shares will not violate any state or federal securities or other laws. The Company is under no obligation to effect any registration of the Shares under the Securities Act of 1933 or to effect any state registration or qualification of the Shares. The Company may, in its sole discretion, delay the delivery of the Shares or place restrictive legends on such Shares in order to ensure that the issuance of any Shares will be in compliance with federal or state securities laws and the rules of the New York Stock Exchange or any other exchange upon which the Common Stock is traded.

7. Income Tax Withholding

In order to comply with all applicable federal, state, local and foreign income and payroll tax laws or regulations, the Company may take such action as it deems appropriate to ensure that all applicable withholding, income or other taxes, which are the sole and absolute responsibility of Participant, are withheld or collected from Participant. Without limiting the foregoing, the Company may, but is not obligated to, permit or require the satisfaction of tax withholding obligations through net Share settlement at the time of delivery of Shares (i.e. the Company withholds a portion of the Shares otherwise to be delivered with a Fair Market Value, as such term is defined in the Plan, equal to the amount of such taxes, but only to the extent necessary to satisfy certain statutory withholding requirements to avoid adverse accounting treatment under ASC 718) or through an open market sale of Shares otherwise to be delivered, in each case pursuant to such rules and procedures as may be established by the Company.

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8. Miscellaneous

(a) The Agreement is issued pursuant to the Plan and is subject to its terms. The Plan is available for inspection during business hours at the principal office of the Company. In addition, the Plan may be viewed on the Fidelity Website at (or the website of any other stock plan administrator selected by the Company in the future).

(b) The Agreement shall not confer on Participant any right with respect to continuance of employment with the Company or any Affiliate, nor will it interfere in any way with the right of the Company or any Affiliate to terminate such employment at any time.

(c) Participant acknowledges that the grant, vesting or any payment with respect to this Award, and the sale or other taxable disposition of the Shares issued with respect to the Units hereunder may have tax consequences pursuant to the Code or under local, state or international tax laws. It is intended that the Award shall comply with Section 409A of the Code, and the provisions of the Agreement and the Plan shall be construed and administered accordingly. Any amendment or modification of the Award (to the extent permitted under the terms of the Plan), will be undertaken in a manner intended to comply with Section 409A, to the extent applicable. Notwithstanding the foregoing, there is no guaranty or assurance as to the tax treatment of the Award. Participant acknowledges that Participant is relying solely and exclusively on Participant’s own professional tax and investment advisors with respect to any and all such matters (and is not relying, in any manner, on the Company or any of its employees or representatives). Participant understands and agrees that any and all tax consequences resulting from the Award and its grant, vesting, amendment, or any payment with respect thereto, and the sale or other taxable disposition of the Shares acquired pursuant to the Award, is solely and exclusively the responsibility of Participant without any expectation or understanding that the Company or any of its employees or representatives will pay or reimburse Participant for such taxes or other items.

9. Venue

Any claim or action brought with respect to this Award shall be brought in a federal or state court located in Minneapolis, Minnesota.

10. Definitions

For purposes of the Agreement, the following terms shall have the definitions as set forth below:

(a) “Change in Control” shall have the meaning ascribed to it in the Plan, but only if the event or circumstances constituting such change in control also constitute a change in ownership or effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company, within the meaning of Section 409A of the Code.

(b) “Disability” means leaving active employment and qualifying for and receiving disability benefits under the Company’s long-term disability programs as in effect from time to time.

(c) “Qualifying Termination” means:

(A) Participant’s Separation From Service as a result of the Company’s termination of Participant’s employment for any reason other than Cause within 12 months following a Change in Control; or

(B) Participant’s Separation From Service as a result of Disability within 12 months following a Change in Control; or

(C) Participant’s Separation From Service (other than as a result of Participant’s termination of employment by the Company for Cause) within 12 months following a Change in Control, if, at the time of such Separation From Service, Participant is age 55 or older and has had 10 or more years of employment with the Company or its Affiliates following such Participant’s most recent date of hire by the Company or its Affiliates. For purposes of this definition, the term Company shall be deemed to include any Person that has assumed this Award (or provided a substitute award to Participant) in connection with a Change in Control.

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(d) “Retirement” means a Separation From Service (other than for Cause) by a Participant who is age 55 or older and has had 10 or more years of employment with the Company or its Affiliates following such Participant’s most recent date of hire by the Company or its Affiliates.

(e) “Separation From Service” means a Participant’s separation from service with the Company and its affiliates, as determined under Treasury Regulation section 1.409A-1(h)(1), provided, that the term “affiliate” shall mean a business entity which is affiliated in ownership with the Company and that is treated as a single employer under the rules of section 414(b) and (c) of the Code (applying the eighty percent common ownership standard).

(f) “Specified Employee” shall mean any Participant who is a specified employee for purposes of section 1.409A-1(i) of the U.S. Treasury Regulations, determined in accordance with the rules set forth in the separate document entitled “U.S. Bank Specified Employee Determination.”

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EXHIBIT A TO

PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT

This Exhibit A to the Performance Restricted Stock Unit Award Agreement sets forth the manner in which the Final Award Number will be determined for each Participant.

Definitions

Capitalized terms used but not defined herein shall have the same meanings assigned to them in the Plan, and the Performance Restricted Stock Unit Award Agreement. The following terms used in the text of this Exhibit A and in the ROE Performance Matrix shall have the meanings set forth below:

“Company ROE Maximum” means ____%.

“Company ROE Minimum” means ____%.

“Company ROE Result” means the ROE achieved by the Company during the Performance Period.

“Company ROE Target” means ____%.

“Determination Date” means the date on which the Final Award Number is determined, which date shall not be later than 45 days after the last day of the Performance Period.

“Final Award Number” means the “Final Award Number” determined in accordance with this Exhibit A.

“Peer Group Companies” means the following companies: _____________________________ .

“Peer Group ROE Ranking Maximum” means the ___ percentile.

“Peer Group ROE Ranking Minimum” means the ____ percentile.

“Peer Group ROE Ranking Target” means the ____ percentile.

“Peer Group ROE” means the ROE achieved by the Peer Group Companies during the Performance Period.

“Peer Group ROE Ranking” means the percentile rank of the Company ROE Result relative to Peer Group ROE.

“Performance Period” means the three-year period commencing on January 1, 20__ and ending December 31, 20__; provided, that performance shall be measured annually during the Performance Period.

“ROE” means the adjusted return on equity determined based on (a) net income applicable to the common shareholders of the company during the Performance Period, adjusted by: (i) deducting the provision for credit losses determined under the Current Expected Credit Losses (CECL) methodology net of the effective tax for the Performance Period, and (ii) adding net charge-offs net of the effective tax for the Performance Period, the sum of which is divided by (b) that company’s average common shareholders’ equity during the Performance Period.

“ROE Performance Matrix” means the ROE Performance Matrix set forth in this Exhibit A.

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“Scheduled Vesting Date” means ________________, 20__.

“Target Award Number” means the “Target Award Number” set forth in a Participant’s Performance Restricted Stock Unit Award Agreement.

“Target Award Number Percentage” means the “Target Award Number Percentage” determined in accordance with the ROE Performance Matrix and the related rules set forth in this Exhibit A.

Determination of Final Award Number

Each Participant has been granted a number of Units equal to the Target Award Number. The Target Award Number will be adjusted upward or downward depending on (a) whether the Company ROE Result is greater or less than the Company ROE Target, and (b) the Peer Group ROE Ranking. The Committee shall measure performance with respect to these performance goals following each calendar year during the Performance Period by calculating the Target Award Number Percentage for the year in accordance with the ROE Performance Matrix and related rules below. At the end of the Performance Period, the Target Award Number Percentage for each of the three years in the Performance Period will be averaged, and the Final Award Number for each Participant will be determined by multiplying (i) the average of the three Target Award Number Percentages by (ii) the Target Award Number.

ROE PERFORMANCE MATRIX

		Target Award Number Percentage
Company ROE Result (Vertical Axis)	Company ROE Maximum (____%) or more		75	%		125	%		150	%
	Company ROE Target (____%)		50	%		100	%		125	%
	Company ROE Minimum (____%) or less (but greater than zero)		25	%		50	%		75	%
	Company ROE is 0% or less		0	%		0	%		0	%
		Peer Group ROE Ranking Minimum or below			Peer Group ROE Ranking Target			Peer Group ROE Ranking Maximum or above
			Peer Group ROE Ranking (Horizontal Axis)

In determining the Target Award Number Percentage in accordance with the ROE Performance Matrix, the following rules will apply:

• If the Company ROE Result is greater than the Company ROE Minimum and less than the Company ROE Target, the Target Award Number Percentage on the vertical axis will be determined by interpolation of the Company ROE Result between the Company ROE Minimum and the Company ROE Target.

• If the Company ROE Result is greater than the Company ROE Target and less than the Company ROE Maximum, the Target Award Number Percentage on the vertical axis will be determined by interpolation of the Company ROE Result between the Company ROE Target and the Company ROE Maximum.

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• If the Peer Group ROE Ranking is greater than the Peer Group ROE Ranking Minimum and less than the Peer Group ROE Ranking Target, the Target Award Number Percentage on the horizontal axis will be determined by interpolation of the Peer Group ROE Ranking between the Peer Group ROE Minimum and the Peer Group ROE Target.

• If the Peer Group ROE Ranking is greater than the Peer ROE Group Ranking Target and less than the Peer Group ROE Ranking Maximum, the Target Award Number Percentage on the horizontal axis will be determined by interpolation of the Peer Group ROE Ranking between the Peer Group ROE Target and the Peer Group ROE Maximum.

• After the Target Award Number Percentage on each of the vertical axis and horizontal axis has been determined, the actual Target Award Number Percentage will be determined by interpolation of the data points (i.e., the percentages) set forth in the ROE Performance Matrix.

• In no event shall the Target Award Number Percentage be greater than 150.0%.

The Final Award Number for each Participant shall be determined by the Committee on the Determination Date.

Committee Determinations

The Committee shall make all determinations necessary to arrive at the Final Award Number for each Participant. The Committee shall determine the Company ROE Result by reference to the Company’s audited financial statements as of and for each calendar year during the Performance Period. The Committee shall determine the Peer Group ROE Ranking by reference to publicly available financial information regarding the Peer Companies for each calendar year during the Performance Period. The Committee may adjust ROE during each calendar year during the Performance Period to exclude the impact of any of the following events or occurrences which the Committee determines should appropriately be excluded: (a) asset write-downs and discontinued operations; (b) litigation, claims, judgments or settlements; (c) the effect of changes in tax law or other such laws or regulations affecting reported results; (d) acquisitions, mergers or restructuring costs; (e) any change in applicable accounting rules or principles or the Company’s method of accounting; and (f) any other extraordinary or unusual items or events applied on a consistent basis. The Committee also may adjust the Peer Group Companies to account for members that cease to be a public company during the Performance Period (whether by merger, consolidation, liquidation or otherwise) and include additional companies consistent with previously approved methodology for selecting Peer Group Companies. Any determination by the Committee pursuant to this Exhibit A will be binding upon each Participant and the Company.

No Fractional Units

In the event the Final Award Number is a number of Units that is not a whole number, then the Final Award Number shall be rounded down to the nearest whole number.

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EX-10.37

Exhibit 10.37

U.S. BANCORP

RESTRICTED STOCK UNIT AWARD AGREEMENT

THIS AGREEMENT is made as of <Grant Date> (the “Grant Date”) by and between U.S. Bancorp (the “Company”) and <Participant Name> (the “Participant”). This Agreement (the “Agreement”) sets forth the terms and conditions of a restricted stock unit award representing the right to receive <Number of Awards Granted> shares of common stock of the Company, par value $0.01 per share (the “Common Stock”). The grant of this restricted stock unit award is made pursuant to the Company’s 2015 Stock Incentive Plan, which was approved by shareholders on April 21, 2015 (the “Plan”) and is subject to its terms. Capitalized terms that are not defined in the Agreement shall have the meaning ascribed to such terms in the Plan.

The Company and Participant agree as follows:

1. Award

Subject to the terms and conditions of the Plan and the Agreement, the Company grants to Participant a restricted stock unit award (the “Units”) entitling the Participant to <Number of Awards Granted> restricted stock units. Each Unit represents the right to receive one share of Common Stock, subject to the vesting requirements and distribution provisions of the Agreement and the terms of the Plan. The shares of Common Stock distributable to Participant with respect to the Units granted hereunder are referred to as the “Shares.”

2. Vesting; Forfeiture

(a) Time-Based Vesting Conditions. Subject to the terms and conditions of the Agreement, the Units shall vest in installments on the date or dates set forth in the vesting schedule (the “Vesting Schedule”) detailed at the end of this Agreement in the Appendix: Vesting Schedule (the “Scheduled Vesting Date”) and will be settled and Shares delivered in accordance with Section 3. Except as otherwise provided in the Agreement, if Participant ceases to be an employee of the Company or any Affiliate prior to an applicable Scheduled Vesting Date, all Units that have not become vested previously in accordance with the Vesting Schedule shall be immediately and irrevocably forfeited. Units that have not become vested previously may also be forfeited if Participant has not complied with the terms of any confidentiality and non-solicitation agreement between the Company or an Affiliate and the Participant at all times since the Grant Date.

(b) Continued Vesting Upon Separation From Service Due to Retirement or Disability. Notwithstanding Section 2(a), if Participant has a Separation From Service (as defined in Section 10) with the Company or any Affiliate by reason of Disability (as defined in Section 10) or Retirement (as defined in Section 10), the Units shall not be forfeited. Rather the Units shall continue to vest on the Scheduled Vesting Dates subject to the terms of the Agreement, including Section 2(e) hereof, as though such Separation From Service had never occurred, and will be settled and Shares delivered in accordance with Section 3(c) provided that Participant has at all times since the Grant Date complied with the terms of any confidentiality and non-solicitation agreement between the Company or an Affiliate and the Participant.

(c) Acceleration of Vesting upon Death. If Participant ceases to be an employee by reason of death, or if Participant dies after a Separation From Service due to Disability or Retirement but prior to any Scheduled Vesting Date, and Participant has at all times since the Grant Date complied with the terms of any confidentiality and non-solicitation agreement between the Company or an Affiliate and the Participant, then the Units will become vested as of the date of death and will be settled and Shares delivered in accordance with Section 3(d).

(d) Acceleration of Vesting Upon Qualifying Termination. Notwithstanding the vesting provisions contained in Sections 2(a) and 2(b) above, but subject to the other terms and conditions of the Agreement, if Participant has been continuously employed by the Company or any Affiliate until the date such Participant experiences a Qualifying Termination (as defined in Section 10) that occurs prior to a Scheduled Vesting Date, and provided that Participant has at all times since the Grant Date complied with the terms of any confidentiality and non-solicitation agreement between the Company or an Affiliate and the Participant, then, immediately upon such Qualifying Termination, the Units shall become vested and will be settled and Shares delivered in accordance with Section 3(b).

(e) Special Risk-Related Cancellation Provisions. Notwithstanding any other provision of the Agreement, if at any time subsequent to the Grant Date the Committee determines, in its sole discretion, that Participant has subjected the Company to significant financial, reputational, or other risk by (i) failing to comply with Company policies and procedures, including the Code of Ethics and Business Conduct, (ii) violating any law or regulation, (iii) engaging in negligence or willful misconduct, or (iv) engaging in activity resulting in a significant or material control deficiency under the Sarbanes-Oxley Act of 2002, then all or part of the Units granted under the Agreement that have not been settled (and Shares delivered) at the time of such determination may be cancelled. If any Units are cancelled pursuant to this provision, Participant will have no rights with respect to the Units (including, without limitation, any rights to receive a distribution of Shares with respect to the Units and the right to receive Dividend Equivalents).

3. Distribution of Shares with Respect to Units

Subject to the terms of the Agreement, including the restrictions in this Section 3, following the vesting of Units and following the payment of any applicable withholding taxes pursuant to Section 7 hereof, the Company shall cause to be issued and delivered to Participant (including through book entry) Shares registered in the name of Participant or in the name of Participant’s legal representatives, beneficiaries or heirs, as the case may be, as follows:

(a) Scheduled Vesting Date Distributions. As soon as administratively feasible following each Scheduled Vesting Date (but in no event later than December 31^st of the year in which such Scheduled Vesting Date occurs), all Shares issuable pursuant to Units that become vested pursuant to Sections 2(a) (and with respect to which Shares have not been distributed previously) shall be distributed to Participant, or in the event of Participant’s death, to the representatives of Participant or to any Person to whom the Units have been transferred by will or the applicable laws of descent and distribution.

(b) Qualifying Termination Distributions. As soon as administratively feasible following a Separation From Service in connection with a Qualifying Termination (and in any case no later than 60 days following such Separation From Service except as otherwise provided in this Section 3(b)), all Shares issuable pursuant to Units that become vested as a result of such Qualifying Termination (and with respect to which Shares have not been distributed previously) shall be distributed to Participant. Notwithstanding the foregoing, any Shares issuable to a Specified Employee (as defined in Section 10) as a result of a Separation From Service in connection with a Qualifying Termination will not be delivered to such Specified Employee until the date that is six months and one day after the date of the Separation From Service. If in connection with a Change in Control the Units are adjusted, or units in the acquiring or surviving entity are substituted for the Units, or the Plan is terminated, in each case as permitted under the Plan and in accordance with Section 409A, then the terms of such adjustment, substitution or plan termination will govern the treatment of the Units, including the time and manner of settlement of the Units.

(c) Distributions Following Retirement or Disability. If a Participant has a Separation From Service due to Retirement or Disability (so long as such Separation From Service is not in connection with a Qualifying Termination), the distribution of Shares with respect to Units will not be accelerated, and Shares will be distributed as soon as administratively feasible following the applicable Scheduled Vesting Dates (but in no event later than December 31^st of the year in which such Scheduled Vesting Date occurs).

(d) Distributions Following Death. As soon as administratively feasible following the death of a Participant (but in no event later than 90 days following such death) all Shares issuable pursuant to Units that become vested pursuant to Section 2(c) (and with respect to which Shares have not been distributed previously) shall be distributed to the Participant.

In the event that the number of Shares distributable pursuant to this Section 3 is a number that is not a whole number, then the number of Shares distributed shall be rounded down to the nearest whole number.

4. Rights as Shareholder; Dividend Equivalents

Prior to the distribution of Shares with respect to Units pursuant to Section 3 above, Participant shall not have ownership or rights of ownership of any Shares underlying the Units; provided, however, that Participant shall be entitled to receive cash Dividend Equivalents on outstanding Units (i.e. Units that have not been forfeited, cancelled or settled), whether vested or unvested, if cash dividends on the Common Stock are declared by the Board

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on or after the Grant Date. Such Dividend Equivalents will be in an amount of cash per Unit equal to the cash dividend paid with respect to a share of outstanding Common Stock. The Dividend Equivalents shall be treated as earnings on, and as a separate amount from, the Units for purposes of Section 409A of the Code and will be paid out as soon as administratively feasible following the Common Stock dividend payable date, but in no event later than December 31st of the year in which the payable date is declared. Dividend Equivalents paid with respect to dividends declared before the delivery of the Shares underlying the Units will be treated as compensation income for tax purposes and will be subject to income and payroll tax withholding by the Company.

5. Restriction on Transfer

Except for transfers by will or the applicable laws of descent and distribution, the Units cannot be sold, assigned, transferred, gifted, pledged, or in any manner encumbered, alienated, attached or disposed of, and any purported sale, assignment, transfer, gift, pledge, alienation, attachment or encumbrance shall be void and unenforceable against the Company. No such attempt to transfer the Units, whether voluntary or involuntary, by operation of law or otherwise (except by will or laws of descent and distribution), shall vest the purported transferee with any interest or right in or with respect to the Units or the Shares issuable with respect to the Units.

6. Securities Law Compliance

The delivery of all or any of the Shares in accordance with this Award shall be effective only at such time that the issuance of such Shares will not violate any state or federal securities or other laws. The Company is under no obligation to effect any registration of the Shares under the Securities Act of 1933 or to effect any state registration or qualification of the Shares. The Company may, in its sole discretion, delay the delivery of the Shares or place restrictive legends on such Shares in order to ensure that the issuance of any Shares will be in compliance with federal or state securities laws and the rules of the New York Stock Exchange or any other exchange upon which the Common Stock is traded.

7. Income Tax Withholding

In order to comply with all applicable federal, state, local and foreign income and payroll tax laws or regulations, the Company may take such action as it deems appropriate to ensure that all applicable withholding, income or other taxes, which are the sole and absolute responsibility of Participant, are withheld or collected from Participant. Without limiting the foregoing, the Company may, but is not obligated to, permit or require the satisfaction of tax withholding obligations through net Share settlement at the time of delivery of Shares (i.e. the Company withholds a portion of the Shares otherwise to be delivered with a Fair Market Value, as such term is defined in the Plan, equal to the amount of such taxes, but only to the extent necessary to satisfy certain statutory withholding requirements to avoid adverse accounting treatment under ASC 718) or through an open market sale of Shares otherwise to be delivered, in each case pursuant to such rules and procedures as may be established by the Company.

8. Miscellaneous

(a) The Agreement is issued pursuant to the Plan and is subject to its terms. The Plan is available for inspection during business hours at the principal office of the Company. In addition, the Plan may be viewed on the Fidelity Website at www.netbenefits.com (or the website of any other stock plan administrator selected by the Company in the future).

(b) The Agreement shall not confer on Participant any right with respect to continuance of employment with the Company or any Affiliate, nor will it interfere in any way with the right of the Company or any Affiliate to terminate such employment at any time.

(c) Participant acknowledges that the grant, vesting or any payment with respect to this Award, and the sale or other taxable disposition of the Shares issued with respect to the Units hereunder may have tax consequences pursuant to the Code or under local, state or international tax laws. It is intended that the Award shall comply with Section 409A of the Code, and the provisions of the Agreement and the Plan shall be construed and administered accordingly. Any amendment or modification of the Award (to the extent permitted under the terms of the Plan), will be undertaken in a manner intended to comply with Section 409A, to the extent applicable. Notwithstanding the foregoing, there is no guaranty or assurance as to the tax treatment of the Award. Participant

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acknowledges that Participant is relying solely and exclusively on Participant’s own professional tax and investment advisors with respect to any and all such matters (and is not relying, in any manner, on the Company or any of its employees or representatives). Participant understands and agrees that any and all tax consequences resulting from the Award and its grant, vesting, amendment, or any payment with respect thereto, and the sale or other taxable disposition of the Shares acquired pursuant to the Award, is solely and exclusively the responsibility of Participant without any expectation or understanding that the Company or any of its employees or representatives will pay or reimburse Participant for such taxes or other items.

9. Venue

Any claim or action brought with respect to this Award shall be brought in a federal or state court located in Minneapolis, Minnesota.

10. Definitions

For purposes of the Agreement, the following terms shall have the definitions as set forth below:

(a) “Change in Control” shall have the meaning ascribed to it in the Plan, but only if the event or circumstances constituting such change in control also constitute a change in ownership or effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company, within the meaning of Section 409A of the Code.

(b) “Disability” means leaving active employment and qualifying for and receiving disability benefits under the Company’s long-term disability programs as in effect from time to time.

(c) “Qualifying Termination” means:

(A) Participant’s Separation From Service as a result of the Company’s termination of Participant’s employment for any reason other than Cause within 12 months following a Change in Control;

(B) Participant’s Separation From Service as a result of Disability within 12 months following a Change in Control; or

(C) Participant’s Separation From Service (other than as a result of Participant’s termination of employment by the Company for Cause) within 12 months following a Change in Control, if, at the time of such Separation From Service, Participant is age 55 or older and has had 10 or more years of employment with the Company or its Affiliates following such Participant’s most recent date of hire by the Company or its Affiliates.

For purposes of this definition, the term Company shall be deemed to include any Person that has assumed this Award (or provided a substitute award to Participant) in connection with a Change in Control.

(d) “Retirement” means a Separation From Service (other than for Cause) by a Participant who is age 55 or older and has had 10 or more years of employment with the Company or its Affiliates following such Participant’s most recent date of hire by the Company or its Affiliates.

(e) “Separation From Service” means a Participant’s separation from service with the Company and its affiliates, as determined under Treasury Regulation section 1.409A-1(h)(1), provided, that the term “affiliate” shall mean a business entity which is affiliated in ownership with the Company and that is treated as a single employer under the rules of section 414(b) and (c) of the Code (applying the eighty percent common ownership standard).

(f) “Specified Employee” shall mean any Participant who is a specified employee for purposes of section 1.409A-1(i) of the U.S. Treasury Regulations, determined in accordance with the rules set forth in the separate document entitled “U.S. Bank Specified Employee Determination.”

Appendix

Vesting Schedule

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EX-13

EXHIBIT 13

The following pages discuss in detail the financial results we achieved in 2019 — results that reflect how we are creating the future now.

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

This report 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. Deterioration in general business and economic conditions or turbulence in domestic or global financial markets could adversely affect U.S. Bancorp’s revenues and the values of its assets and liabilities, reduce the availability of funding to certain financial institutions, lead to a tightening of credit, and increase stock price volatility. 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 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 its investment securities; legal and regulatory developments; litigation; increased competition from both banks and non-banks; changes in the level of tariffs and other trade policies of the United States and its global trading partners; changes in customer behavior and preferences; breaches in data security; failures to safeguard personal information; 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 reputation risk.

Additional factors could cause actual results to differ from expectations, including the risks discussed in the “Corporate Risk Profile” section on pages 36–56 and the “Risk Factors” section on pages 146–156 of this report. In addition, factors other than these risks also could adversely affect U.S. Bancorp’s results, and the reader should not consider these risks 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.

22	Management’s Discussion and Analysis
	22	Overview
	24	Statement of Income Analysis
	28	Balance Sheet Analysis
	36	Corporate Risk Profile
		36	Overview
		37	Credit Risk Management
		48	Residual Value Risk Management
		48	Operational Risk Management
		48	Compliance Risk Management
		49	Interest Rate Risk Management
		50	Market Risk Management
		51	Liquidity Risk Management
		55	Capital Management
	56	Fourth Quarter Summary
	58	Line of Business Financial Review
	62	Non-GAAP Financial Measures
	64	Accounting Changes
	64	Critical Accounting Policies
	66	Controls and Procedures
67	Reports of Management and Independent Accountants
71	Consolidated Financial Statements and Notes
140	Five-Year Consolidated Financial Statements
142	Quarterly Consolidated Financial Data
143	Supplemental Financial Data
146	Company Information
157	Executive Officers
159	Directors

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Management’s Discussion and Analysis

Overview

In 2019, U.S. Bancorp and its subsidiaries (the “Company”) continued to demonstrate its financial strength and shareholder focus. Despite a challenging interest rate environment, the Company had record net revenue and diluted earnings per share, while continuing to invest in digital capabilities and key business initiatives to drive growth and improve efficiencies in the future.

The Company earned $6.9 billion in 2019, a decrease of $182 million (2.6 percent) from 2018, reflecting higher noninterest expense, partially offset by net revenue growth. Net interest income increased as a result of loan growth and higher yields on the reinvestment of securities, partially offset by the impact of a flatter yield curve and changes in deposit and funding mix. Noninterest income increased due to growth in mortgage banking revenue, payment services revenue, trust and investment management fees, and commercial products revenue, partially offset by a decrease in deposit service charges. The Company’s continued focus on controlling expenses allowed it to achieve an industry-leading efficiency ratio of 55.8 percent in 2019. In addition, the Company’s return on average assets and return on average common equity were 1.45 percent and 14.1 percent, respectively.

The Company remains deeply committed to value creation for shareholders. During 2019, the Company increased its dividend rate per common share by 13.5 percent and expanded its common share repurchase program, resulting in the Company returning $7.0 billion of its earnings to common shareholders through dividends and common share repurchases during the year. This expanded capital distribution reflects the Company’s ability to prudently manage capital as it responds to changes in the regulatory landscape, while continuing to invest for the future.

The Company’s common equity tier 1 to risk-weighted assets ratio using the Basel III standardized approach was 9.1 percent at

December 31, 2019. Refer to Table 23 for a summary of the statutory capital ratios in effect for the Company at December 31, 2019 and 2018. Further, credit rating organizations rate the Company’s debt among the highest of any bank in the world. This comparative financial strength provides the Company with favorable funding costs, strong liquidity and the ability to attract new customers.

In 2019, average loans increased $10.0 billion (3.6 percent) over 2018, reflecting higher demand for loans from new and existing customers. Loan growth included increases in residential mortgages, commercial loans, credit card loans and other retail loans. These increases were partially offset by a decrease in commercial real estate loans, due to new originations being more than offset by customers paying down balances over the past year and prudent credit underwriting, given the later stage of the business cycle.

The Company’s provision for credit losses in 2019 increased $125 million (9.1 percent) over 2018 and was $50 million higher than net charge-offs in 2019, compared with $25 million higher than net charge-offs in 2018. The increases in the provision and allowance for credit losses during 2019 reflected loan portfolio growth.

The Company’s strong 2019 financial results and momentum in its lending and fee businesses position it well for 2020. The Company’s focus on value creation supported continued customer acquisition and deepening of existing relationships across the franchise, which in turn drove strong account and volume growth in its fee businesses and strong loan and deposit growth in its banking businesses. The Company remains committed to delivering best-in-class products and services and in 2020 will continue to enhance its digital capabilities aimed at improving the customer experience and making it simpler and more productive to do business with.

22    

  TABLE 1   Selected Financial Data

Year Ended December 31 (Dollars and Shares in Millions, Except Per Share Data)	2019			2018			2017			2016			2015
Condensed Income Statement
Net interest income	$	13,052		$	12,919		$	12,380		$	11,666		$	11,151
Taxable-equivalent adjustment(a)		103			116			205			203			213
Net interest income (taxable-equivalent basis)(b)		13,155			13,035			12,585			11,869			11,364
Noninterest income		9,758			9,572			9,260			9,268			8,818
Securities gains (losses), net		73			30			57			22			—
Total net revenue		22,986			22,637			21,902			21,159			20,182
Noninterest expense		12,785			12,464			12,790			11,527			10,807
Provision for credit losses		1,504			1,379			1,390			1,324			1,132
Income before taxes		8,697			8,794			7,722			8,308			8,243
Income taxes and taxable-equivalent adjustment		1,751			1,670			1,469			2,364			2,310
Net income		6,946			7,124			6,253			5,944			5,933
Net (income) loss attributable to noncontrolling interests		(32	)		(28	)		(35	)		(56	)		(54	)
Net income attributable to U.S. Bancorp	$	6,914		$	7,096		$	6,218		$	5,888		$	5,879
Net income applicable to U.S. Bancorp common shareholders	$	6,583		$	6,784		$	5,913		$	5,589		$	5,608
Per Common Share
Earnings per share	$	4.16		$	4.15		$	3.53		$	3.25		$	3.18
Diluted earnings per share		4.16			4.14			3.51			3.24			3.16
Dividends declared per share		1.58			1.34			1.16			1.07			1.01
Book value per share(c)		29.90			28.01			26.34			24.63			23.28
Market value per share		59.29			45.70			53.58			51.37			42.67
Average common shares outstanding		1,581			1,634			1,677			1,718			1,764
Average diluted common shares outstanding		1,583			1,638			1,683			1,724			1,772
Financial Ratios
Return on average assets		1.45	%		1.55	%		1.39	%		1.36	%		1.44	%
Return on average common equity		14.1			15.4			13.8			13.4			14.0
Net interest margin (taxable-equivalent basis)(a)		3.06			3.14			3.10			3.04			3.09
Efficiency ratio(b)		55.8			55.1			58.5			54.5			53.5
Net charge-offs as a percent of average loans outstanding		.50			.48			.48			.47			.47
Average Balances
Loans	$	290,686		$	280,701		$	276,537		$	267,811		$	250,459
Loans held for sale		3,769			3,230			3,574			4,181			5,784
Investment securities(d)		117,150			113,940			111,820			107,922			103,161
Earning assets		430,537			415,067			406,421			389,877			367,445
Assets		475,653			457,014			448,582			433,313			408,865
Noninterest-bearing deposits		73,863			78,196			81,933			81,176			79,203
Deposits		346,812			333,462			333,514			312,810			287,151
Short-term borrowings		18,137			21,790			15,022			19,906			27,960
Long-term debt		41,572			37,450			35,601			36,220			33,566
Total U.S. Bancorp shareholders’ equity		52,623			49,763			48,466			47,339			44,813
Period End Balances
Loans	$	296,102		$	286,810		$	280,432		$	273,207		$	260,849
Investment securities		122,613			112,165			112,499			109,275			105,587
Assets		495,426			467,374			462,040			445,964			421,853
Deposits		361,916			345,475			347,215			334,590			300,400
Long-term debt		40,167			41,340			32,259			33,323			32,078
Total U.S. Bancorp shareholders’ equity		51,853			51,029			49,040			47,298			46,131
Asset Quality
Nonperforming assets	$	829		$	989		$	1,200		$	1,603		$	1,523
Allowance for credit losses		4,491			4,441			4,417			4,357			4,306
Allowance for credit losses as a percentage of period-end loans		1.52	%		1.55	%		1.58	%		1.59	%		1.65	%
Capital Ratios
Basel III standardized approach:
Common equity tier 1 capital		9.1	%		9.1	%		9.3	%		9.4	%		9.6	%
Tier 1 capital		10.7			10.7			10.8			11.0			11.3
Total risk-based capital		12.7			12.6			12.9			13.2			13.3
Leverage		8.8			9.0			8.9			9.0			9.5
Tangible common equity to tangible assets(b)		7.5			7.8			7.6			7.5			7.6
Tangible common equity to risk-weighted assets(b)		9.3			9.4			9.4			9.2			9.2

(a) Based on federal income tax rates of 21 percent for 2019 and 2018 and 35 percent for 2017, 2016 and 2015, for those assets and liabilities whose income or expense is not included for federal income tax purposes.    

(b) See Non-GAAP Financial Measures beginning on page 62.    

(c) Calculated as U.S. Bancorp common shareholders’ equity divided by common shares outstanding at end of the period.    

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

23    

Results for 2018 Compared With 2017 For discussion related to changes in financial condition and results of operations for 2018 compared with 2017, refer to “Management’s Discussion and Analysis” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the Securities and Exchange Commission on February 21, 2019.

Earnings Summary The Company reported net income attributable to U.S. Bancorp of $6.9 billion in 2019, or $4.16 per diluted common share, compared with $7.1 billion, or $4.14 per diluted common share, in 2018. Return on average assets and return on average common equity were 1.45 percent and 14.1 percent, respectively, in 2019, compared with 1.55 percent and 15.4 percent, respectively, in 2018. The results for 2019 included the impact of restructuring charges including severance and certain asset impairments, and an increased derivative liability related to Visa shares previously sold by the Company. Combined, these items decreased 2019 diluted earnings per common share by $0.17.

Total net revenue for 2019 was $349 million (1.5 percent) higher than 2018, reflecting a 1.0 percent increase in net interest income (0.9 percent on a taxable-equivalent basis), and a 2.4 percent increase in noninterest income. The increase in net interest income from the prior year was mainly a result of loan growth and higher yields on the reinvestment of securities, partially offset by the impact of a flatter yield curve and changes in deposit and funding mix. The increase in noninterest income was primarily driven by growth in mortgage banking revenue, payment services revenue, trust and investment management fees, and commercial products revenue, partially offset by a decrease in deposit service charges, driven by the sale of the Company’s ATM third-party processing business in late 2018.

Noninterest expense in 2019 was $321 million (2.6 percent) higher than 2018, primarily due to an increase in personnel expense, reflecting the impact of hiring to support business growth and higher fee revenue production in mortgage activities, and higher technology and communications expense and net occupancy and equipment expense, both in support of business growth. Partially offsetting these increases was lower other noninterest expense driven by lower Federal Deposit Insurance Corporation (“FDIC”) assessment costs.

Statement of Income Analysis

Net Interest Income Net interest income, on a taxable-equivalent basis, was $13.2 billion in 2019, compared with $13.0 billion in 2018. The $120 million (0.9 percent) increase in net interest income, on a taxable-equivalent basis, in 2019 compared with 2018, was principally driven by earning assets growth and higher yields on reinvestment of securities, partially offset by declining interest rates and a flatter yield curve, as well as changes in deposit and funding mix. Average earning assets were $15.5 billion (3.7 percent) higher in 2019, compared with 2018, driven by increases in loans, investment securities and other earning assets. The net interest margin, on a taxable-equivalent basis, in 2019 was 3.06 percent, compared with 3.14 percent in 2018. The decrease in the net interest margin in 2019, compared with 2018, was primarily due to the impacts of changes in the yield curve in addition to changes in deposit and funding mix. Refer to the “Interest Rate Risk Management” section for further information on the sensitivity of the Company’s net interest income to changes in interest rates.

Average total loans were $290.7 billion in 2019, compared with $280.7 billion in 2018. The $10.0 billion (3.6 percent) increase was driven by growth in residential mortgages, commercial loans, credit card loans and other retail loans, partially offset by a decrease in commercial real estate loans and the fourth quarter of 2018 sale of the majority of the Company’s loans covered by FDIC loss-sharing agreements. Subsequent to the sale in the fourth quarter of 2018, any remaining covered loan balances were reclassified to their respective portfolio category. Average residential mortgages increased $5.9 billion (9.5 percent) as origination activity more than offset customers paying down balances. The $4.3 billion (4.4 percent) increase in average commercial loans was driven by higher demand for loans from new and existing customers. Average credit card balances increased $1.6 billion (7.6 percent) due to new and existing customer growth. The $910 million (1.6 percent) increase in average other retail loans was primarily due to higher installment, auto and retail leasing loans, partially offset by decreases in home equity loans and revolving credit balances. Average commercial real estate loans decreased $591 million (1.5 percent) in 2019, compared with 2018, due to new originations being more than offset by customers paying down balances and prudent credit underwriting, given the later stage of the business cycle.

24    

  TABLE 2   Analysis of Net Interest Income(a)

Year Ended December 31 (Dollars in Millions)	2019			2018			2017			2019 v 2018			2018 v 2017
Components of Net Interest Income
Income on earning assets (taxable-equivalent basis)	$	17,607		$	16,298		$	14,559		$	1,309		$	1,739
Expense on interest-bearing liabilities (taxable-equivalent basis)		4,452			3,263			1,974			1,189			1,289
Net interest income (taxable-equivalent basis)(b)	$	13,155		$	13,035		$	12,585		$	120		$	450
Net interest income, as reported	$	13,052		$	12,919		$	12,380		$	133		$	539
Average Yields and Rates Paid
Earning assets yield (taxable-equivalent basis)		4.09	%		3.93	%		3.58	%		.16	%		.35	%
Rate paid on interest-bearing liabilities (taxable-equivalent basis)		1.34			1.04			.65			.30			.39
Gross interest margin (taxable-equivalent basis)		2.75	%		2.89	%		2.93	%		(.14	)%		(.04	)%
Net interest margin (taxable-equivalent basis)		3.06	%		3.14	%		3.10	%		(.08	)%		.04	%
Average Balances
Investment securities(c)	$	117,150		$	113,940		$	111,820		$	3,210		$	2,120
Loans		290,686			280,701			276,537			9,985			4,164
Earning assets		430,537			415,067			406,421			15,470			8,646
Noninterest-bearing deposits		73,863			78,196			81,933			(4,333	)		(3,737	)
Interest-bearing deposits		272,949			255,266			251,581			17,683			3,685
Total deposits		346,812			333,462			333,514			13,350			(52	)
Interest-bearing liabilities		332,658			314,506			302,204			18,152			12,302

(a) Interest and rates are presented on a fully taxable-equivalent basis based on federal income tax rates of 21 percent for 2019 and 2018, and 35 percent for 2017.

(b) See Non-GAAP Financial Measures beginning on page 62.    

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

Average investment securities in 2019 were $3.2 billion (2.8 percent) higher than in 2018, primarily due to purchases of mortgage-backed securities, net of prepayments and maturities.

Average total deposits for 2019 were $13.4 billion (4.0 percent) higher than 2018. Average total savings deposits for 2019 were $11.9 billion (5.5 percent) higher than 2018, driven by increases in Wealth Management and Investment Services, Corporate and Commercial Banking, and Consumer and Business Banking balances. Average time deposits for 2019 were $5.8 billion (14.9 percent) higher than 2018. The increase was

primarily related to those deposits managed as an alternative to other funding sources, based largely on relative pricing and liquidity characteristics, in addition to the migration of consumer customer deposit balances to higher yielding products. Average noninterest-bearing deposits were $4.3 billion (5.5 percent) lower in 2019, compared with 2018, primarily due to the migration of balances to interest-bearing deposits and the continued deployment by customers of business deposits within Corporate and Commercial Banking.

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  TABLE 3   Net Interest Income — Changes Due to Rate and Volume(a)

	2019 v 2018									2018 v 2017
Year Ended December 31 (Dollars in Millions)	Volume			Yield/Rate			Total			Volume			Yield/Rate		Total
Increase (decrease) in
Interest Income
Investment securities	$	75		$	201		$	276		$	44		$	302	$	346
Loans held for sale		28			(31	)		(3	)		(14	)		35		21
Loans
Commercial		167			267			434			96			568		664
Commercial real estate		(28	)		66			38			(89	)		182		93
Residential mortgages		224			54			278			115			71		186
Credit card		192			(57	)		135			86			101		187
Other retail		40			176			216			30			164		194
Covered loans		(134	)		—			(134	)		(65	)		24		(41	)
Total loans		461			506			967			173			1,110		1,283
Other earning assets		27			42			69			34			55		89
Total earning assets		591			718			1,309			237			1,502		1,739
Interest Expense
Interest-bearing deposits
Interest checking		5			72			77			3			63		66
Money market savings		86			473			559			(29	)		463		434
Savings accounts		2			53			55			1			23		24
Time deposits		87			208			295			41			263		304
Total interest-bearing deposits		180			806			986			16			812		828
Short-term borrowings		(65	)		48			(17	)		68			170		238
Long-term debt		111			109			220			41			182		223
Total interest-bearing liabilities		226			963			1,189			125			1,164		1,289
Increase (decrease) in net interest income	$	365		$	(245	)	$	120		$	112		$	338	$	450

(a) This table shows the components of the change in net interest income by volume and rate on a taxable-equivalent basis based on federal income tax rates of 21 percent for 2019 and 2018, and 35 percent for 2017. This table does not take into account the level of noninterest-bearing funding, nor does it fully reflect changes in the mix of assets and liabilities. The change in interest not solely due to changes in volume or rates has been allocated on a pro-rata basis to volume and yield/rate.    

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

In 2019, the provision for credit losses was $1.5 billion, compared with $1.4 billion in 2018. The provision for credit losses was higher than net charge-offs by $50 million and $25 million in 2019 and 2018, respectively. The increase in the allowance for credit losses during 2019 reflected loan portfolio growth. Net charge-offs increased $100 million (7.4 percent) in 2019, compared with 2018, primarily due to higher credit card,

commercial and commercial real estate loan net charge-offs, partially offset by lower residential mortgage loan net charge-offs. Nonperforming assets decreased $160 million (16.2 percent) from December 31, 2018 to December 31, 2019, primarily driven by improvements in nonperforming residential mortgages, commercial real estate loans, other retail loans, and other real estate owned (“OREO”).

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

26    

  TABLE 4   Noninterest Income

Year Ended December 31 (Dollars in Millions)	2019		2018		2017		2019 v 2018			2018 v 2017
Credit and debit card revenue	$	1,413	$	1,401	$	1,289		.9	%		8.7	%
Corporate payment products revenue		664		644		575		3.1			12.0
Merchant processing services		1,601		1,531		1,486		4.6			3.0
Trust and investment management fees		1,673		1,619		1,522		3.3			6.4
Deposit service charges		909		1,070		1,035		(15.0	)		3.4
Treasury management fees		578		594		618		(2.7	)		(3.9	)
Commercial products revenue		934		895		954		4.4			(6.2	)
Mortgage banking revenue		874		720		834		21.4			(13.7	)
Investment products fees		186		188		173		(1.1	)		8.7
Securities gains (losses), net		73		30		57		*			(47.4	)
Other		926		910		774		1.8			17.6
Total noninterest income	$	9,831	$	9,602	$	9,317		2.4	%		3.1	%

* Not meaningful.    

Noninterest Income Noninterest income in 2019 was $9.8 billion, compared with $9.6 billion in 2018. The $229 million (2.4 percent) increase in 2019 over 2018 reflected growth in mortgage banking revenue, payment services revenue, trust and investment management fees, commercial products revenue and other noninterest income, partially offset by a decline in deposit service charges. Mortgage banking revenue increased 21.4 percent in 2019, compared with 2018, driven by higher mortgage production and gain on sale margins, partially offset by changes in mortgage servicing rights (“MSRs”) valuations, net of hedging activities. Payment services revenue was higher in 2019, compared with 2018, due to a 0.9 percent increase in credit and debit card revenue, a 3.1 percent increase in corporate payment products revenue and a 4.6 percent increase in merchant processing services revenue, all driven by higher sales volumes. Trust and investment management fees increased 3.3 percent due to business growth and favorable market conditions. Commercial products revenue increased 4.4 percent primarily due to higher corporate bond fees and trading revenue related to

stronger capital markets activities. Other noninterest income increased 1.8 percent in 2019, compared with 2018, primarily due to higher transition services agreement revenue associated with the sale of the Company’s ATM third-party servicing business in 2018, a 2019 gain on the sale of a loan portfolio and higher equity investment income, partially offset by a 2019 charge of $140 million for an increased derivative liability related to Visa shares previously sold by the Company and the 2018 net impact of the $340 million gain recorded from the sale of the ATM third-party servicing business and $264 million of asset impairment charges related to the sale of a majority of the Company’s covered loans and certain other assets. The change in value of the derivative liability related to the Visa shares reflected judgement as to the estimated resolution date of the Visa litigation discussed in Note 22 of the Notes to Consolidated Financial Statements. Deposit service charges decreased 15.0 percent in 2019, compared with 2018, primarily due to the ATM third-party servicing business sale.

  TABLE 5   Noninterest Expense

Year Ended December 31 (Dollars in Millions)	2019			2018			2017			2019 v 2018			2018 v 2017
Compensation	$	6,325		$	6,162		$	5,746			2.6	%		7.2	%
Employee benefits		1,286			1,231			1,134			4.5			8.6
Net occupancy and equipment		1,123			1,063			1,019			5.6			4.3
Professional services		454			407			419			11.5			(2.9	)
Marketing and business development		426			429			542			(.7	)		(20.8	)
Technology and communications		1,095			978			903			12.0			8.3
Postage, printing and supplies		290			324			323			(10.5	)		.3
Other intangibles		168			161			175			4.3			(8.0	)
Other		1,618			1,709			2,529			(5.3	)		(32.4	)
Total noninterest expense	$	12,785		$	12,464		$	12,790			2.6	%		(2.5	)%
Efficiency ratio(a)		55.8	%		55.1	%		58.5	%

(a) See Non-GAAP Financial Measures beginning on page 62.                     

27    

Noninterest Expense Noninterest expense in 2019 was $12.8 billion, compared with $12.5 billion in 2018. The Company’s efficiency ratio was 55.8 percent in 2019, compared with 55.1 percent in 2018. The $321 million (2.6 percent) increase in noninterest expense in 2019 over 2018 reflected higher personnel expense, technology and communications expense, net occupancy and equipment expense, and professional services expense, partially offset by lower other noninterest expense. Compensation expense increased 2.6 percent in 2019 over 2018, principally due to the impact of hiring to support business growth, merit increases and higher variable compensation related to business production within mortgage banking, while employee benefits expense increased 4.5 percent primarily due to increased medical costs. Technology and communications expense increased 12.0 percent and net occupancy and equipment expense increased 5.6 percent, primarily to support business growth. Professional services expense increased 11.5 percent primarily due to business investments and enhancements to risk management programs. Other noninterest expense decreased 5.3 percent in 2019, compared with 2018, due to lower FDIC assessment costs driven by the elimination of the surcharge in late 2018, and lower costs related to tax-advantaged projects. These decreases in other noninterest expense were partially offset by the net impact of $200 million of severance charges and asset impairment accruals recorded in 2019, and $174 million of severance charges and legal matter accruals recorded in 2018.

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

The Company’s pension accounting reflects the long-term nature of the benefit obligations and the investment horizon of plan assets. Amounts recorded in the financial statements reflect actuarial assumptions about participant benefits and plan asset returns. Changes in actuarial assumptions and differences in actual plan experience, compared with actuarial assumptions, are deferred and recognized in expense in future periods.

Pension expense is expected to increase by approximately $45 million in 2020 primarily due to a lower discount rate. Because of the complexity of forecasting pension plan activities, the accounting methods utilized for pension plans, the Company’s ability to respond to factors affecting the plans and the hypothetical nature of actuarial assumptions, the actual pension expense increase may differ from the expected amount.

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

The following table shows the effect of hypothetical changes in the discount rate and long-term rate of return (“LTROR”) on the Company’s expected 2020 pension expense:

Discount Rate (Dollars in Millions)	Down 100 Basis Points			Up 100 Basis Points
Incremental benefit (expense)	$	(92	)	$	77
Percent of 2019 net income		(.99	)%		.83	%
LTROR (Dollars in Millions)	Down 100 Basis Points			Up 100 Basis Points
Incremental benefit (expense)	$	(55	)	$	55
Percent of 2019 net income		(.59	)%		.59	%

Income Tax Expense The provision for income taxes was $1.6 billion (an effective rate of 19.2 percent) in 2019, compared with $1.6 billion (an effective rate of 17.9 percent) in 2018. In late 2017, tax reform was enacted that, among other provisions, reduced the federal statutory rate for corporations from 35 percent to 21 percent effective in 2018. The Company revalued its deferred tax assets and liabilities at December 31, 2017 resulting in the recording of a deferred tax benefit in the provision for income taxes in 2017. The 2018 provision for income taxes reflected the currently effective statutory rate and the favorable impact of deferred tax assets and liabilities adjustments related to tax reform estimates.

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

Balance Sheet Analysis

Average earning assets were $430.5 billion in 2019, compared with $415.1 billion in 2018. The increase in average earning assets of $15.4 billion (3.7 percent) was primarily due to increases in loans of $10.0 billion (3.6 percent), investment securities of $3.2 billion (2.8 percent) and other earning assets of $1.7 billion (10.1 percent).

For average balance information, refer to Consolidated Daily Average Balance Sheet and Related Yields and Rates on pages 144 and 145.

Loans The Company’s loan portfolio was $296.1 billion at December 31, 2019, compared with $286.8 billion at December 31, 2018, an increase of $9.3 billion (3.2 percent). The increase was driven by increases in residential mortgages of $5.6 billion (8.5 percent), credit card loans of $1.4 billion (6.1 percent), commercial loans of $1.4 billion (1.4 percent), other retail loans of $688 million (1.2 percent) and commercial real estate loans of $207 million (0.5 percent). Table 6 provides a summary of the loan distribution by product type, while Table 12 provides a summary of the selected loan maturity distribution by loan category. Average total loans increased $10.0 billion (3.6 percent) in 2019, compared with 2018. The increase was due to growth in most loan portfolio categories in 2019.

Commercial Commercial loans, including lease financing, increased $1.4 billion (1.4 percent) at December 31, 2019, compared with December 31, 2018. Average commercial loans

28    

increased $4.3 billion (4.4 percent) in 2019, compared with 2018. The growth was primarily driven by higher demand from new and existing customers. Table 7 provides a summary of commercial loans by industry and geographical location.

Commercial Real Estate The Company’s portfolio of commercial real estate loans, which includes commercial mortgages and construction and development loans, increased $207 million (0.5 percent) at December 31, 2019, compared with December 31, 2018, primarily the result of new originations, partially offset by customers paying down balances. Average commercial real estate loans decreased $591 million (1.5 percent) in 2019, compared with 2018. Table 8 provides a summary of commercial real estate loans by property type and geographical location.

The Company reclassifies construction loans to the commercial mortgage category if permanent financing criteria are

met. In 2019, approximately $493 million of construction loans were reclassified to the commercial mortgage category. At December 31, 2019 and 2018, $101 million and $130 million, respectively, of tax-exempt industrial development loans were secured by real estate. The Company’s commercial mortgage and construction and development loans had unfunded commitments of $11.3 billion and $10.3 billion at December 31, 2019 and 2018, respectively.

The Company also finances the operations of real estate developers and other entities with operations related to real estate. These loans are not secured directly by real estate but have similar characteristics to commercial real estate loans. These loans were included in the commercial loan category and totaled $9.5 billion and $9.8 billion at December 31, 2019 and 2018, respectively.

  TABLE 6   Loan Portfolio Distribution

	2019					2018					2017					2016					2015
At December 31 (Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total			Amount		Percent of Total			Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	98,168		33.2	%	$	96,849		33.8	%	$	91,958		32.8	%	$	87,928		32.2	%	$	83,116		31.9	%
Lease financing		5,695		1.9			5,595		1.9			5,603		2.0			5,458		2.0			5,286		2.0
Total commercial		103,863		35.1			102,444		35.7			97,561		34.8			93,386		34.2			88,402		33.9
Commercial Real Estate
Commercial mortgages		29,404		9.9			28,596		10.0			29,367		10.5			31,592		11.6			31,773		12.2
Construction and development		10,342		3.5			10,943		3.8			11,096		4.0			11,506		4.2			10,364		3.9
Total commercial real estate		39,746		13.4			39,539		13.8			40,463		14.5			43,098		15.8			42,137		16.1
Residential Mortgages
Residential mortgages		59,865		20.2			53,034		18.5			46,685		16.6			43,632		16.0			40,425		15.5
Home equity loans, first liens		10,721		3.6			12,000		4.2			13,098		4.7			13,642		5.0			13,071		5.0
Total residential mortgages		70,586		23.8			65,034		22.7			59,783		21.3			57,274		21.0			53,496		20.5
Credit Card		24,789		8.4			23,363		8.1			22,180		7.9			21,749		7.9			21,012		8.1
Other Retail
Retail leasing		8,490		2.9			8,546		3.0			7,988		2.8			6,316		2.3			5,232		2.0
Home equity and second mortgages		15,036		5.1			16,122		5.6			16,327		5.8			16,369		6.0			16,384		6.3
Revolving credit		2,899		1.0			3,088		1.1			3,183		1.1			3,282		1.2			3,354		1.3
Installment		11,038		3.7			9,676		3.4			8,989		3.2			8,087		3.0			7,030		2.7
Automobile		19,435		6.5			18,719		6.5			18,934		6.8			17,571		6.4			16,587		6.3
Student		220		.1			279		.1			1,903		.7			2,239		.8			2,619		1.0
Total other retail		57,118		19.3			56,430		19.7			57,324		20.4			53,864		19.7			51,206		19.6
Covered Loans		—		—			—		—			3,121		1.1			3,836		1.4			4,596		1.8
Total loans	$	296,102		100.0	%	$	286,810		100.0	%	$	280,432		100.0	%	$	273,207		100.0	%	$	260,849		100.0	%

29    

  TABLE 7   Commercial Loans by Industry Group and Geography

	2019					2018
At December 31 (Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Industry Group
Manufacturing	$	14,889		14.3	%	$	15,064		14.7	%
Real estate, rental and leasing		12,347		11.9			12,270		12.0
Finance and insurance		11,990		11.5			10,301		10.0
Wholesale trade		8,392		8.1			8,310		8.1
Retail trade		7,674		7.4			8,211		8.0
Healthcare and social assistance		5,229		5.0			5,769		5.6
Transport and storage		4,270		4.1			3,559		3.5
Public administration		4,263		4.1			4,773		4.7
Professional, scientific and technical services		3,928		3.8			3,358		3.3
Information		3,537		3.4			3,576		3.5
Arts, entertainment and recreation		3,239		3.1			4,089		4.0
Educational services		2,774		2.7			3,139		3.1
Utilities		2,134		2.1			2,760		2.7
Mining		2,126		2.0			1,636		1.6
Other services		1,714		1.7			1,691		1.6
Agriculture, forestry, fishing and hunting		1,162		1.1			1,235		1.2
Other		14,195		13.7			12,703		12.4
Total	$	103,863		100.0	%	$	102,444		100.0	%
Geography
California	$	12,432		12.0	%	$	13,507		13.2	%
Colorado		4,025		3.9			4,071		4.0
Illinois		5,482		5.3			5,356		5.2
Minnesota		7,294		7.0			7,832		7.6
Missouri		3,875		3.7			3,274		3.2
Ohio		4,777		4.6			4,913		4.8
Oregon		1,986		1.9			2,135		2.1
Washington		3,910		3.8			3,672		3.6
Wisconsin		3,975		3.8			3,630		3.5
Iowa, Kansas, Nebraska, North Dakota, South Dakota		4,375		4.2			5,094		5.0
Arkansas, Indiana, Kentucky, North Carolina, Tennessee		6,461		6.2			6,439		6.3
Idaho, Montana, Wyoming		1,010		1.0			1,114		1.1
Arizona, Nevada, New Mexico, Utah		4,194		4.0			4,183		4.1
Total banking region		63,796		61.4			65,220		63.7
Florida, Michigan, New York, Pennsylvania, Texas		20,869		20.1			18,031		17.6
All other states		19,198		18.5			19,193		18.7
Total outside Company’s banking region		40,067		38.6			37,224		36.3
Total	$	103,863		100.0	%	$	102,444		100.0	%

Residential Mortgages Residential mortgages held in the loan portfolio at December 31, 2019, increased $5.6 billion (8.5 percent) over December 31, 2018, as origination activity more than offset the effect of customers paying down balances during 2019. Average residential mortgages increased $5.9 billion (9.5 percent) in 2019, compared with 2018. Residential mortgages originated and placed in the Company’s loan portfolio include well-secured jumbo mortgages and branch-originated first lien home equity loans to borrowers with high credit quality.

Credit Card Total credit card loans increased $1.4 billion (6.1 percent) at December 31, 2019, compared with December 31, 2018, reflecting new and existing customer growth during the year. Average credit card balances increased $1.6 billion (7.6 percent) in 2019, compared with 2018.

30    

  TABLE 8   Commercial Real Estate Loans by Property Type and Geography

	2019					2018
At December 31 (Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Property Type
Business owner occupied	$	9,111		22.9	%	$	9,769		24.7	%
Commercial property
Industrial		2,650		6.7			1,695		4.3
Office		5,783		14.5			5,351		13.5
Retail		3,947		9.9			4,150		10.5
Other commercial		3,542		8.9			3,399		8.6
Multi-family		8,260		20.8			8,592		21.7
Hotel/motel		3,154		7.9			3,520		8.9
Residential homebuilders		3,040		7.7			2,764		7.0
Healthcare facilities		259		.7			299		.8
Total	$	39,746		100.0	%	$	39,539		100.0	%
Geography
California	$	9,980		25.1	%	$	9,784		24.7	%
Colorado		1,649		4.1			1,883		4.8
Illinois		1,379		3.5			1,484		3.8
Minnesota		1,927		4.9			1,896		4.8
Missouri		1,114		2.8			1,157		2.9
Ohio		1,235		3.1			1,278		3.2
Oregon		1,735		4.4			1,718		4.4
Washington		3,505		8.8			3,383		8.6
Wisconsin		1,713		4.3			1,892		4.8
Iowa, Kansas, Nebraska, North Dakota, South Dakota		2,049		5.2			2,085		5.3
Arkansas, Indiana, Kentucky, North Carolina, Tennessee		2,828		7.1			2,742		6.9
Idaho, Montana, Wyoming		1,004		2.5			962		2.4
Arizona, Nevada, New Mexico, Utah		3,056		7.7			3,130		7.9
Total banking region		33,174		83.5			33,394		84.5
Florida, Michigan, New York, Pennsylvania, Texas		3,892		9.8			3,613		9.1
All other states		2,680		6.7			2,532		6.4
Total outside Company’s banking region		6,572		16.5			6,145		15.5
Total	$	39,746		100.0	%	$	39,539		100.0	%

Other Retail Total other retail loans, which include retail leasing, home equity and second mortgages and other retail loans, increased $688 million (1.2 percent) at December 31, 2019, compared with December 31, 2018, reflecting increases in installment loans and auto loans, partially offset by decreases in home equity loans and revolving credit balances. Average other retail loans increased $910 million (1.6 percent) in 2019, compared with 2018. Of the total residential mortgages, credit

card and other retail loans outstanding at December 31, 2019, approximately 73.2 percent were to customers located in the Company’s primary banking region, compared with 74.0 percent at December 31, 2018. Tables 9, 10 and 11 provide a geographic summary of residential mortgages, credit card loans and other retail loans outstanding, respectively, as of December 31, 2019 and 2018.

31    

  TABLE 9   Residential Mortgages by Geography

	2019					2018
At December 31 (Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
California	$	22,945		32.5	%	$	20,176		31.0	%
Colorado		3,864		5.5			3,586		5.5
Illinois		3,488		4.9			3,301		5.1
Minnesota		4,359		6.2			4,322		6.6
Missouri		1,704		2.4			1,710		2.6
Ohio		2,017		2.9			2,062		3.2
Oregon		2,485		3.5			2,427		3.7
Washington		4,075		5.8			3,702		5.7
Wisconsin		1,503		2.1			1,527		2.3
Iowa, Kansas, Nebraska, North Dakota, South Dakota		1,970		2.8			2,055		3.2
Arkansas, Indiana, Kentucky, North Carolina, Tennessee		3,921		5.6			3,804		5.9
Idaho, Montana, Wyoming		1,354		1.9			1,326		2.0
Arizona, Nevada, New Mexico, Utah		5,229		7.4			4,851		7.5
Total banking region		58,914		83.5			54,849		84.3
Florida, Michigan, New York, Pennsylvania, Texas		5,162		7.3			4,744		7.3
All other states		6,510		9.2			5,441		8.4
Total outside Company’s banking region		11,672		16.5			10,185		15.7
Total	$	70,586		100.0	%	$	65,034		100.0	%

  TABLE 10   Credit Card Loans by Geography

	2019					2018
At December 31 (Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
California	$	2,550		10.3	%	$	2,399		10.3	%
Colorado		854		3.4			808		3.5
Illinois		1,257		5.1			1,176		5.0
Minnesota		1,305		5.3			1,275		5.5
Missouri		787		3.2			758		3.2
Ohio		1,272		5.1			1,215		5.2
Oregon		710		2.9			684		2.9
Washington		903		3.6			877		3.8
Wisconsin		1,043		4.2			1,017		4.3
Iowa, Kansas, Nebraska, North Dakota, South Dakota		1,122		4.5			1,100		4.7
Arkansas, Indiana, Kentucky, North Carolina, Tennessee		2,106		8.5			1,985		8.5
Idaho, Montana, Wyoming		395		1.6			384		1.6
Arizona, Nevada, New Mexico, Utah		1,286		5.2			1,183		5.1
Total banking region		15,590		62.9			14,861		63.6
Florida, Michigan, New York, Pennsylvania, Texas		4,763		19.2			4,440		19.0
All other states		4,436		17.9			4,062		17.4
Total outside Company’s banking region		9,199		37.1			8,502		36.4
Total	$	24,789		100.0	%	$	23,363		100.0	%

32    

  TABLE 11   Other Retail Loans by Geography

	2019					2018
At December 31 (Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
California	$	9,596		16.8	%	$	9,826		17.4	%
Colorado		2,015		3.5			2,079		3.7
Illinois		2,772		4.8			2,938		5.2
Minnesota		3,147		5.5			3,298		5.8
Missouri		1,820		3.2			1,961		3.5
Ohio		2,594		4.5			2,626		4.7
Oregon		1,530		2.7			1,530		2.7
Washington		1,810		3.2			1,755		3.1
Wisconsin		1,289		2.3			1,350		2.4
Iowa, Kansas, Nebraska, North Dakota, South Dakota		2,320		4.1			2,343		4.2
Arkansas, Indiana, Kentucky, North Carolina, Tennessee		3,927		6.9			3,797		6.7
Idaho, Montana, Wyoming		1,090		1.9			1,043		1.8
Arizona, Nevada, New Mexico, Utah		3,144		5.5			2,976		5.3
Total banking region		37,054		64.9			37,522		66.5
Florida, Michigan, New York, Pennsylvania, Texas		12,564		22.0			11,752		20.8
All other states		7,500		13.1			7,156		12.7
Total outside Company’s banking region		20,064		35.1			18,908		33.5
Total	$	57,118		100.0	%	$	56,430		100.0	%

  TABLE 12   Selected Loan Maturity Distribution

At December 31, 2019 (Dollars in Millions)	One Year or Less		Over One Through Five Years		Over Five Years		Total
Commercial	$	40,211	$	59,926	$	3,726	$	103,863
Commercial real estate		10,322		22,028		7,396		39,746
Residential mortgages		2,490		9,041		59,055		70,586
Credit card		24,789		—		—		24,789
Other retail		10,830		24,741		21,547		57,118
Total loans	$	88,642	$	115,736	$	91,724	$	296,102
Total of loans due after one year with
Predetermined interest rates							$	97,933
Floating interest rates							$	109,527

The Company generally retains portfolio loans through maturity; however, the Company’s intent may change over time based upon various factors such as ongoing asset/liability management activities, assessment of product profitability, credit risk, liquidity needs, and capital implications. If the Company’s intent or ability to hold an existing portfolio loan changes, it is transferred to loans held for sale.

Loans Held for Sale Loans held for sale, consisting primarily of residential mortgages to be sold in the secondary market, were

$5.6 billion at December 31, 2019, compared with $2.1 billion at December 31, 2018. The increase in loans held for sale was principally due to a higher level of mortgage loan closings in late 2019, compared with the same period of 2018, reflecting the impact of declining interest rates. Almost all of the residential mortgage loans the Company originates or purchases for sale follow guidelines that allow the loans to be sold into existing, highly liquid secondary markets; in particular in government agency transactions and to government sponsored enterprises (“GSEs”).

33    

  TABLE 13   Investment Securities

	2019									2018
At December 31 (Dollars in Millions)	Amortized Cost		Fair Value		Weighted- Average Maturity in Years		Weighted- Average Yield(e)			Amortized Cost		Fair Value		Weighted- Average Maturity in Years		Weighted- Average Yield(e)
U.S. Treasury and agencies	$	19,845	$	19,839		2.7		1.68	%	$	24,706	$	24,218		3.0		1.77	%
Mortgage-backed securities(a)		95,385		95,564		4.4		2.39			81,464		79,725		5.6		2.60
Asset-backed securities(a)		375		383		3.1		3.09			402		411		3.5		3.69
Obligations of state and political subdivisions(b)(c)		6,499		6,814		6.6		4.29			6,842		6,708		10.4		4.35
Other		13		13		.3		2.66			17		17		1.0		3.52
Total investment securities(d)	$	122,117	$	122,613		4.2		2.38	%	$	113,431	$	111,079		5.3		2.52	%

(a) Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities that take into account anticipated future prepayments.

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

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

(d) At December 31, 2019, all investment securities were classified as available-for-sale. At December 31, 2018, total investment securities included held-to-maturity investment securities with a total amortized cost and fair value of $46.0 billion and $45.0 billion, respectively, and available-for-sale investment securities with a total amortized cost and fair value of $67.4 billion and $66.1 billion, respectively. Held-to-maturity investment securities are carried at historical cost, adjusted for amortization of premiums and accretion of discounts. Available-for-sale investment securities are carried at fair value with unrealized net gains or losses reported within accumulated other comprehensive income (loss) in shareholders’ equity.

(e) Weighted-average yields for obligations of state and political subdivisions are presented on a fully-taxable equivalent basis based on a federal income tax rate of 21 percent. Yields on investment securities are computed based on amortized cost balances, excluding any premiums or discounts recorded related to the transfer of investment securities at fair value from available-for-sale to held-to-maturity.

Investment Securities The Company uses its investment securities portfolio to manage interest rate risk, provide liquidity (including the ability to meet regulatory requirements), generate interest and dividend income, and as collateral for public deposits and wholesale funding sources. While the Company intends to hold its investment securities indefinitely, it may sell available-for-sale securities in response to structural changes in the balance sheet and related interest rate risk and to meet liquidity requirements, among other factors.

Investment securities totaled $122.6 billion at December 31, 2019, compared with $112.2 billion at December 31, 2018. The $10.4 billion (9.3 percent) increase reflected $8.7 billion of net investment purchases and a $1.8 billion favorable change in net unrealized gains (losses) on available-for-sale investment securities. On December 31, 2019, the Company transferred all $43.6 billion of its held-to-maturity investment securities to the available-for-sale category to reflect its new intent for these securities, as a result of changes to regulatory capital requirements promulgated in 2019.

Average investment securities were $117.2 billion in 2019, compared with $113.9 billion in 2018. The weighted-average yield of the investment securities portfolio was 2.38 percent at December 31, 2019, compared with 2.52 percent at December 31, 2018. The weighted-average maturity of the investment securities portfolio was 4.2 years at December 31, 2019, compared with 5.3 years at December 31, 2018. Investment securities by type are shown in Table 13.

The Company’s available-for-sale securities are carried at fair value with changes in fair value reflected in other comprehensive income (loss) unless a security is deemed to be other-than-temporarily impaired. At December 31, 2019, the Company’s net unrealized gains on available-for-sale securities were $496 million, compared with $1.3 billion of net unrealized losses at December 31, 2018. The favorable change in net unrealized gains (losses) was primarily due to increases in the fair value of U.S. Treasury, mortgage-backed and state and political securities as a result of changes in interest rates. Gross unrealized losses on available-for-sale securities totaled $448 million at December 31, 2019, compared with $1.4 billion at December 31, 2018. The Company conducts a regular assessment of its investment portfolio to determine whether any securities are other-than-temporarily impaired. When assessing unrealized losses for other-than-temporary impairment, the Company considers the nature of the investment, the financial condition of the issuer, the extent and duration of unrealized losses, expected cash flows of underlying assets and market conditions. At December 31, 2019, the Company had no plans to sell securities with unrealized losses, and believes it is more likely than not that it would not be required to sell such securities before recovery of their amortized cost.

Refer to Notes 4 and 21 in the Notes to Consolidated Financial Statements for further information on investment securities.

34    

  TABLE 14   Deposits

The composition of deposits was as follows:

	2019					2018					2017					2016					2015
At December 31 (Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total			Amount		Percent of Total			Amount		Percent of Total			Amount		Percent of Total
Noninterest-bearing deposits	$	75,590		20.9	%	$	81,811		23.7	%	$	87,557		25.2	%	$	86,097		25.7	%	$	83,766		27.9	%
Interest-bearing deposits
Interest checking		75,949		21.0			73,994		21.4			74,520		21.5			66,298		19.8			59,169		19.7
Money market savings		120,082		33.2			100,396		29.1			107,973		31.1			109,947		32.9			86,159		28.7
Savings accounts		47,401		13.1			44,720		12.9			43,809		12.6			41,783		12.5			38,468		12.8
Total savings deposits		243,432		67.3			219,110		63.4			226,302		65.2			218,028		65.2			183,796		61.2
Time deposits less than $100,000		10,624		2.9			7,422		2.1			7,315		2.1			8,040		2.4			9,050		3.0
Time deposits greater than $100,000
Domestic		13,077		3.6			19,958		5.8			10,792		3.1			7,230		2.2			7,272		2.4
Foreign		19,193		5.3			17,174		5.0			15,249		4.4			15,195		4.5			16,516		5.5
Total interest-bearing deposits		286,326		79.1			263,664		76.3			259,658		74.8			248,493		74.3			216,634		72.1
Total deposits	$	361,916		100.0	%	$	345,475		100.0	%	$	347,215		100.0	%	$	334,590		100.0	%	$	300,400		100.0	%

The maturity of time deposits was as follows:

	Time Deposits Less Than $100,000		Time Deposits Greater Than $100,000
At December 31, 2019 (Dollars in Millions)			Domestic		Foreign		Total
Three months or less	$	3,807	$	5,020	$	19,158	$	27,985
Three months through six months		2,019		2,958		34		5,011
Six months through one year		2,065		2,669		1		4,735
Thereafter		2,733		2,430		—		5,163
Total	$	10,624	$	13,077	$	19,193	$	42,894

Deposits Total deposits were $361.9 billion at December 31, 2019, compared with $345.5 billion at December 31, 2018. The $16.4 billion (4.8 percent) increase in total deposits reflected an increase in total savings deposits, partially offset by decreases in noninterest-bearing and time deposits. Average total deposits in 2019 increased $13.4 billion (4.0 percent) over 2018.

Interest-bearing savings deposits increased $24.3 billion (11.1 percent) at December 31, 2019, compared with December 31, 2018. The increase was related to higher money market, savings account and interest checking account deposit balances. Money market deposit balances increased $19.7 billion (19.6 percent), primarily due to higher Wealth Management and Investment Services, and Corporate and Commercial Banking balances. Savings account balances increased $2.7 billion (6.0 percent), primarily due to higher Consumer and Business Banking balances. Interest checking balances increased $2.0 billion (2.6 percent) primarily due to higher Consumer and Business Banking, and Corporate and Commercial Banking balances, partially offset by lower Wealth Management and Investment Services balances. Average interest-bearing savings deposits in 2019 increased $11.9 billion (5.5 percent), compared with 2018, reflecting higher Wealth Management and Investment Services, Corporate and Commercial Banking, and Consumer and Business Banking balances.

Noninterest-bearing deposits at December 31, 2019, decreased $6.2 billion (7.6 percent) from December 31, 2018. Average noninterest-bearing deposits decreased $4.3 billion (5.5 percent) in 2019, compared with 2018. The decreases were

primarily due to lower Wealth Management and Investment Services, and Corporate and Commercial Banking balances, resulting primarily from balance migration to interest-bearing deposits and continued deployment of deposits by customers.

Interest-bearing time deposits at December 31, 2019, decreased $1.7 billion (3.7 percent), compared with December 31, 2018. Average time deposits increased $5.8 billion (14.9 percent) in 2019, compared with 2018. The changes were primarily driven by those deposits managed as an alternative to other funding sources, based largely on relative pricing and liquidity characteristics, as well as the migration of consumer customer deposit balances to higher yielding products.

Borrowings The Company utilizes both short-term and long-term borrowings as part of its asset/liability management and funding strategies. Short-term borrowings, which include federal funds purchased, commercial paper, repurchase agreements, borrowings secured by high-grade assets and other short-term borrowings, were $23.7 billion at December 31, 2019, compared with $14.1 billion at December 31, 2018. The $9.6 billion (67.8 percent) increase in short-term borrowings was primarily due to higher commercial paper, federal funds purchased and other short-term borrowings balances, partially offset by lower repurchase agreement balances.

Long-term debt was $40.2 billion at December 31, 2019, compared with $41.3 billion at December 31, 2018. The $1.1 billion (2.8 percent) decrease was primarily due to $8.0 billion of bank note repayments and maturities, and $1.5 billion of medium-term note repayments, partially offset by

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issuances of $4.8 billion of bank notes, $2.7 billion of medium-term notes and $1.0 billion of subordinated notes.

Refer to Notes 12 and 13 of the Notes to Consolidated Financial Statements for additional information regarding short-term borrowings and long-term debt, and the “Liquidity Risk Management” section for discussion of liquidity management of the Company.

Corporate Risk Profile

Overview Managing risks is an essential part of successfully operating a financial services company. The Company’s Board of Directors has approved a risk management framework which establishes governance and risk management requirements for all risk-taking activities. This framework includes Company and business line risk appetite statements which set boundaries for the types and amount of risk that may be undertaken in pursuing business objectives and initiatives. The Board of Directors, primarily through its Risk Management Committee, oversees performance relative to the risk management framework, risk appetite statements, and other policy requirements.

The Executive Risk Committee (“ERC”), which is chaired by the Chief Risk Officer and includes the Chief Executive Officer and other members of the executive management team, oversees execution against the risk management framework and risk appetite statements. The ERC focuses on current and emerging risks, including strategic and reputation risks, by directing timely and comprehensive actions. Senior operating committees have also been established, each responsible for overseeing a specified category of risk.

The Company’s most prominent risk exposures are credit, interest rate, market, liquidity, operational, compliance, strategic, and reputation. Credit risk is the risk of not collecting the interest and/or the principal balance of a loan, investment or derivative contract when it is due. Interest rate risk is the potential reduction of net interest income or market valuations as a result of changes in interest rates. Market risk arises from fluctuations in interest rates, foreign exchange rates, and security prices that may result in changes in the values of financial instruments, such as trading and available-for-sale securities, mortgage loans held for sale (“MLHFS”), MSRs and derivatives that are accounted for on a fair value basis. Liquidity risk is the possible inability to fund obligations or new business at a reasonable cost and in a timely manner. Operational risk is the risk of loss arising from inadequate or failed internal processes or systems, people, or adverse external events, including the risk of loss resulting from breaches in data security. Operational risk can also include the risk of loss due to failures by third parties with which the Company does business. Compliance risk is the risk that the Company may suffer legal or regulatory sanctions, material financial loss, or loss to reputation through failure to comply with laws, regulations, rules, standards of good practice, and codes of conduct. Strategic risk is the risk to current or projected financial condition arising from adverse business decisions, poor implementation of business decisions, or lack of responsiveness to changes in the banking industry and operating

environment. Reputation risk is the risk to current or anticipated earnings, capital, or franchise or enterprise value arising from negative public opinion. This risk may impair the Company’s competitiveness by affecting its ability to establish new customer relationships, offer new services or continue serving existing customer relationships. In addition to the risks identified above, other risk factors exist that may impact the Company. Refer to “Risk Factors” beginning on page 146, for a detailed discussion of these factors.

The Company’s Board and management-level governance committees are supported by a “three lines of defense” model for establishing effective checks and balances. The first line of defense, the business lines, manages risks in conformity with established limits and policy requirements. In turn, business line leaders and their risk officers establish programs to ensure conformity with these limits and policy requirements. The second line of defense, which includes the Chief Risk Officer’s organization as well as policy and oversight activities of corporate support functions, translates risk appetite and strategy into actionable risk limits and policies. The second line of defense monitors first line of defense conformity with limits and policies, and provides reporting and escalation of emerging risks and other concerns to senior management and the Risk Management Committee of the Board of Directors. The third line of defense, internal audit, is responsible for providing the Audit Committee of the Board of Directors and senior management with independent assessment and assurance regarding the effectiveness of the Company’s governance, risk management and control processes.

Management regularly provides reports to the Risk Management Committee of the Board of Directors. The Risk Management Committee discusses with management the Company’s risk management performance, and provides a summary of key risks to the entire Board of Directors, covering the status of existing matters, areas of potential future concern and specific information on certain types of loss events. The Risk Management Committee considers quarterly reports by management assessing the Company’s performance relative to the risk appetite statements and the associated risk limits, including:

– Macroeconomic environment and other qualitative considerations, such as regulatory and compliance changes, litigation developments, and technology and cybersecurity;

– Credit measures, including adversely rated and nonperforming loans, leveraged transactions, credit concentrations and lending limits;

– Interest rate and market risk, including market value and net income simulation, and trading-related Value at Risk (“VaR”);

– Liquidity risk, including funding projections under various stressed scenarios;

– Operational and compliance risk, including losses stemming from events such as fraud, processing errors, control breaches, breaches in data security or adverse business decisions, as well as reporting on technology performance, and various legal and regulatory compliance measures;

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– Capital ratios and projections, including regulatory measures and stressed scenarios; and

– Strategic and reputation risk considerations, impacts and responses.

Credit Risk Management The Company’s strategy for credit risk management includes well-defined, centralized credit policies, uniform underwriting criteria, and ongoing risk monitoring and review processes for all commercial and consumer credit exposures. The strategy also emphasizes diversification on a geographic, industry and customer level, regular credit examinations and management reviews of loans exhibiting deterioration of credit quality. The Risk Management Committee oversees the Company’s credit risk management process.

In addition, credit quality ratings as defined by the Company, are an important part of the Company’s overall credit risk management and evaluation of its allowance for credit losses. Loans with a pass rating represent those loans not classified on the Company’s rating scale for problem credits, as minimal risk has been identified. Loans with a special mention or classified rating, including loans that are 90 days or more past due and still accruing, nonaccrual loans, those loans considered troubled debt restructurings (“TDRs”), and loans in a junior lien position that are current but are behind a modified or delinquent loan in a first lien position, encompass all loans held by the Company that it considers to have a potential or well-defined weakness that may put full collection of contractual cash flows at risk. The Company’s internal credit quality ratings for consumer loans are primarily based on delinquency and nonperforming status, except for a limited population of larger loans within those portfolios that are individually evaluated. For this limited population, the determination of the internal credit quality rating may also consider collateral value and customer cash flows. The Company strives to identify potential problem loans early, record any necessary charge-offs promptly and maintain appropriate allowance levels for probable loan losses. Refer to Notes 1 and 5 in the Notes to Consolidated Financial Statements for further discussion of the Company’s loan portfolios including internal credit quality ratings.

The Company categorizes its loan portfolio into two segments, which is the level at which it develops and documents a systematic methodology to determine the allowance for credit losses. The Company’s two loan portfolio segments are commercial lending and consumer lending.

The commercial lending segment includes loans and leases made to small business, middle market, large corporate, commercial real estate, financial institution, non-profit and public sector customers. Key risk characteristics relevant to commercial lending segment loans include the industry and geography of the borrower’s business, purpose of the loan, repayment source, borrower’s debt capacity and financial flexibility, loan covenants, and nature of pledged collateral, if any. These risk characteristics, among others, are considered in determining estimates about the likelihood of default by the borrowers and the severity of loss in the event of default. The Company considers these risk

characteristics in assigning internal risk ratings to, or forecasting losses on, these loans, which are the significant factors in determining the allowance for credit losses for loans in the commercial lending segment.

The consumer lending segment represents loans and leases made to consumer customers, including residential mortgages, credit card loans, and other retail loans such as revolving consumer lines, auto loans and leases, home equity loans and lines, and student loans, a run-off portfolio. Home equity or second mortgage loans are junior lien closed-end accounts fully disbursed at origination. These loans typically are fixed rate loans, secured by residential real estate, with a 10- or 15-year fixed payment amortization schedule. Home equity lines are revolving accounts giving the borrower the ability to draw and repay balances repeatedly, up to a maximum commitment, and are secured by residential real estate. These include accounts in either a first or junior lien position. Typical terms on home equity lines in the portfolio are variable rates benchmarked to the prime rate, with a 10- or 15-year draw period during which a minimum payment is equivalent to the monthly interest, followed by a 20- or 10-year amortization period, respectively. At December 31, 2019, substantially all of the Company’s home equity lines were in the draw period. Approximately $1.3 billion, or 10 percent, of the outstanding home equity line balances at December 31, 2019, will enter the amortization period within the next 36 months. Key risk characteristics relevant to consumer lending segment loans primarily relate to the borrowers’ capacity and willingness to repay and include unemployment rates and other economic factors, customer payment history and credit scores, and in some cases, updated loan-to-value (“LTV”) information reflecting current market conditions on real estate-based loans. These risk characteristics, among others, are reflected in forecasts of delinquency levels, bankruptcies and losses which are the primary factors in determining the allowance for credit losses for the consumer lending segment.

The Company further disaggregates its loan portfolio segments into various classes based on their underlying risk characteristics. The two classes within the commercial lending segment are commercial loans and commercial real estate loans. The three classes within the consumer lending segment are residential mortgages, credit card loans and other retail loans.

Because business processes and credit risks associated with unfunded credit commitments are essentially the same as for loans, the Company utilizes similar processes to estimate its liability for unfunded credit commitments. The Company also engages in non-lending activities that may give rise to credit risk, including derivative transactions for balance sheet hedging purposes, foreign exchange transactions, deposit overdrafts and interest rate contracts for customers, investments in securities and other financial assets, and settlement risk, including Automated Clearing House transactions and the processing of credit card transactions for merchants. These activities are subject to credit review, analysis and approval processes.

Economic and Other Factors In evaluating its credit risk, the Company considers changes, if any, in underwriting activities, the

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loan portfolio composition (including product mix and geographic, industry or customer-specific concentrations), collateral values, trends in loan performance and macroeconomic factors, such as changes in unemployment rates, gross domestic product and consumer bankruptcy filings, as well as the potential impact on customers and the domestic economy resulting from new tariffs or increases in existing tariffs.

During 2019, domestic economic conditions continued to be favorable as evidenced by overall growth and a strong labor market with the lowest unemployment rate in decades, despite the challenging headwinds created by trade conflict and slowing global growth. The domestic economy has experienced moderate productivity growth over the past few years supported by strong consumer spending, although business investment remains muted due to weak foreign growth and domestic trade policies. In an effort to reduce the impact of these risks to the domestic economy, the Federal Reserve Bank decreased short-term interest rates during 2019. Although the domestic economy is expected to grow at a modest pace in the next year, supported by strong consumer confidence and a healthy job market, uncertainty remains of the impact resulting from new tariffs, increases in existing tariffs, or future changes in interest rates or other domestic economic or trade policies. Current or anticipated changes to these policies that lessen their expansionary effect on the domestic economy could slow or further slow the expansion of the domestic and global economies.

Credit Diversification The Company manages its credit risk, in part, through diversification of its loan portfolio which is achieved through limit setting by product type criteria, such as industry, and identification of credit concentrations. As part of its normal business activities, the Company offers a broad array of traditional commercial lending products and specialized products such as asset-based lending, commercial lease financing, agricultural credit, warehouse mortgage lending, small business lending, commercial real estate lending, health care lending and correspondent banking financing. The Company also offers an array of consumer lending products, including residential mortgages, credit card loans, auto loans, retail leases, home equity loans and lines, revolving credit arrangements and other consumer loans. These consumer lending products are primarily offered through the branch office network, home mortgage and loan production offices, mobile and on-line banking, and indirect distribution channels, such as auto dealers. The Company monitors and manages the portfolio diversification by industry, customer and geography. Table 6 provides information with respect to the overall product diversification and changes in the mix during 2019.

The commercial loan class is diversified among various industries with higher concentrations in manufacturing, finance and insurance, wholesale trade, retail trade, and real estate, rental and leasing. Additionally, the commercial loan class is diversified across the Company’s geographical markets with 61.4 percent of total commercial loans within the Company’s Consumer and Business Banking region. Credit relationships outside of the Company’s Consumer and Business Banking region relate to the

corporate banking, mortgage banking, auto dealer and leasing businesses, focusing on large national customers and specifically targeted industries, such as healthcare, utilities, energy and public administration. Loans to mortgage banking customers are primarily warehouse lines which are collateralized with the underlying mortgages. The Company regularly monitors its mortgage collateral position to manage its risk exposure. Table 7 provides a summary of significant industry groups and geographical locations of commercial loans outstanding at December 31, 2019 and 2018.

The commercial real estate loan class reflects the Company’s focus on serving business owners within its geographic footprint as well as regional and national investment-based real estate owners and builders. Within the commercial real estate loan class, different property types have varying degrees of credit risk. Table 8 provides a summary of the significant property types and geographical locations of commercial real estate loans outstanding at December 31, 2019 and 2018. At December 31, 2019, approximately 22.9 percent of the commercial real estate loans represented business owner-occupied properties that tend to exhibit less credit risk than non owner-occupied properties. The investment-based real estate mortgages are diversified among various property types with somewhat higher concentrations in multi-family, office and retail properties. From a geographical perspective, the Company’s commercial real estate loan class is generally well diversified. However, at December 31, 2019, 25.1 percent of the Company’s commercial real estate loans were secured by collateral in California, which has historically experienced higher credit quality deterioration in recessionary periods due to excess inventory levels and declining valuations. Included in commercial real estate at year-end 2019 was approximately $407 million in loans related to land held for development and $433 million of loans related to residential and commercial acquisition and development properties. These loans are subject to quarterly monitoring for changes in local market conditions due to a higher credit risk profile. The commercial real estate loan class is diversified across the Company’s geographical markets with 83.5 percent of total commercial real estate loans outstanding at December 31, 2019, within the Company’s Consumer and Business Banking region.

The Company’s consumer lending segment utilizes several distinct business processes and channels to originate consumer credit, including traditional branch lending, mobile and on-line banking, indirect lending, correspondent banks and loan brokers. Each distinct underwriting and origination activity manages unique credit risk characteristics and prices its loan production commensurate with the differing risk profiles.

Residential mortgage originations are generally limited to prime borrowers and are performed through the Company’s branches, loan production offices, mobile and on-line services, and a wholesale network of originators. The Company may retain residential mortgage loans it originates on its balance sheet or sell the loans into the secondary market while retaining the servicing rights and customer relationships. Utilizing the secondary markets enables the Company to effectively reduce its credit and other

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asset/liability risks. For residential mortgages that are retained in the Company’s portfolio and for home equity and second mortgages, credit risk is also diversified by geography and managed by adherence to LTV and borrower credit criteria during the underwriting process.

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

The following tables provide summary information of residential mortgages and home equity and second mortgages by LTV and borrower type at December 31, 2019:

Residential Mortgages (Dollars in Millions)	Interest Only		Amortizing		Total		Percent of Total
Loan-to-Value
Less than or equal to 80%	$	2,536	$	57,774	$	60,310		85.5	%
Over 80% through 90%		12		5,942		5,954		8.4
Over 90% through 100%		1		719		720		1.0
Over 100%		–		189		189		.3
No LTV available		–		27		27		–
Loans purchased from GNMA mortgage pools(a)		–		3,386		3,386		4.8
Total	$	2,549	$	68,037	$	70,586		100.0	%
Borrower Type
Prime borrowers	$	2,549	$	64,048	$	66,597		94.3	%
Sub-prime borrowers		–		603		603		.9
Loans purchased from GNMA mortgage pools(a)		–		3,386		3,386		4.8
Total	$	2,549	$	68,037	$	70,586		100.0	%

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

Home Equity and Second Mortgages (Dollars in Millions)	Lines		Loans		Total		Percent of Total
Loan-to-Value
Less than or equal to 80%	$	11,124	$	937	$	12,061		80.2	%
Over 80% through 90%		1,653		679		2,332		15.5
Over 90% through 100%		328		61		389		2.6
Over 100%		120		10		130		.9
No LTV/CLTV available		118		6		124		.8
Total	$	13,343	$	1,693	$	15,036		100.0	%
Borrower Type
Prime borrowers	$	13,309	$	1,655	$	14,964		99.5	%
Sub-prime borrowers		34		38		72		.5
Total	$	13,343	$	1,693	$	15,036		100.0	%

Home equity and second mortgages were $15.0 billion at December 31, 2019, compared with $16.1 billion at December 31, 2018, and included $3.8 billion of home equity lines in a first lien position and $11.2 billion of home equity and second mortgage loans and lines in a junior lien position. Loans and lines in a junior lien position at December 31, 2019, included approximately $4.5 billion of loans and lines for which the Company also serviced the related first lien loan, and approximately $6.7 billion where the Company did not service the related first lien loan. The Company was able to determine the status of the related first liens using information the Company has as the servicer of the first lien or information reported on customer credit bureau files. The Company also evaluates other indicators of credit risk for these junior lien loans and lines, including delinquency, estimated average CLTV ratios and updated weighted-average credit scores in making its assessment of credit risk, related loss estimates and determining the allowance for credit losses.

The following table provides a summary of delinquency statistics and other credit quality indicators for the Company’s junior lien positions at December 31, 2019:

	Junior Liens Behind
(Dollars in Millions)	Company Owned or Serviced First Lien			Third Party First Lien			Total
Total	$	4,514		$	6,709		$	11,223
Percent 30 - 89 days past due		.30	%		.53	%		.44	%
Percent 90 days or more past due		.06	%		.07	%		.06	%
Weighted-average CLTV		69	%		66	%		67	%
Weighted-average credit score		780			776			778

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

Credit card and other retail loans are diversified across customer segments and geographies. Diversification in the credit card portfolio is achieved with broad customer relationship distribution through the Company’s and financial institution partners’ branches, retail and affinity partners, and digital channels.

Tables 9, 10 and 11 provide a geographical summary of the residential mortgage, credit card and other retail loan portfolios, respectively.

Loan Delinquencies Trends in delinquency ratios are an indicator, among other considerations, of credit risk within the Company’s loan portfolios. The entire balance of a loan account is considered delinquent if the minimum payment contractually required to be made is not received by the date specified on the billing statement. The Company measures delinquencies, both including and excluding nonperforming loans, to enable comparability with other companies. Delinquent loans purchased from Government National Mortgage Association (“GNMA”) mortgage pools whose repayments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of

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  TABLE 15   Delinquent Loan Ratios as a Percent of Ending Loan Balances

At December 31 90 days or more past due excluding nonperforming loans	2019			2018			2017			2016			2015
Commercial
Commercial		.08	%		.07	%		.06	%		.06	%		.06	%
Lease financing		–			–			–			–			–
Total commercial		.08			.07			.06			.06			.05
Commercial Real Estate
Commercial mortgages		.01			–			–			.01			–
Construction and development		–			–			.05			.05			.13
Total commercial real estate		.01			–			.01			.02			.03
Residential Mortgages(a)		.17			.18			.22			.27			.33
Credit Card		1.23			1.25			1.28			1.16			1.09
Other Retail
Retail leasing		.05			.04			.03			.02			.02
Home equity and second mortgages		.32			.35			.28			.25			.25
Other		.13			.15			.15			.13			.11
Total other retail		.17			.19			.17			.15			.15
Covered Loans		–			–			4.74			5.53			6.31
Total loans		.20	%		.20	%		.26	%		.28	%		.32	%

At December 31 90 days or more past due including nonperforming loans	2019			2018			2017			2016			2015
Commercial		.27	%		.27	%		.31	%		.57	%		.25	%
Commercial real estate		.21			.29			.37			.31			.33
Residential mortgages(a)		.51			.63			.96			1.31			1.66
Credit card		1.23			1.25			1.28			1.18			1.13
Other retail		.46			.54			.46			.45			.46
Covered loans		–			–			4.93			5.68			6.48
Total loans		.44	%		.49	%		.62	%		.78	%		.78	%

(a) Delinquent loan ratios exclude $1.7 billion, $1.7 billion, $1.9 billion, $2.5 billion, and $2.9 billion at December 31, 2019, 2018, 2017, 2016, and 2015, respectively, of loans purchased from GNMA mortgage pools whose repayments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. Including these loans, the ratio of residential mortgages 90 days or more past due including all nonperforming loans was 2.92 percent, 3.21 percent, 4.16 percent, 5.73 percent, and 7.15 percent at December 31, 2019, 2018, 2017, 2016, and 2015, respectively.    

Veterans Affairs, are excluded from delinquency statistics. In addition, in certain situations, a consumer lending customer’s account may be re-aged to remove it from delinquent status. Generally, the purpose of re-aging accounts is to assist customers who have recently overcome temporary financial difficulties and have demonstrated both the ability and willingness to resume regular payments. To qualify for re-aging, the account must have been open for at least nine months and cannot have been re-aged during the preceding 365 days. An account may not be re-aged more than two times in a five-year period. To qualify for re-aging, the customer must also have made three regular minimum monthly payments within the last 90 days. In addition, the Company may re-age the consumer lending account of a customer who has experienced longer-term financial difficulties and apply modified, concessionary terms and conditions to the account. Such additional re-ages are limited to

one in a five-year period and must meet the qualifications for re-aging described above. All re-aging strategies must be independently approved by the Company’s risk management department. Commercial lending loans are generally not subject to re-aging policies.

Accruing loans 90 days or more past due totaled $605 million at December 31, 2019, compared with $584 million at December 31, 2018. Accruing loans 90 days or more past due are not included in nonperforming assets and continue to accrue interest because they are adequately secured by collateral, are in the process of collection and are reasonably expected to result in repayment or restoration to current status, or are managed in homogeneous portfolios with specified charge-off timeframes adhering to regulatory guidelines. The ratio of accruing loans 90 days or more past due to total loans was 0.20 percent at December 31, 2019, unchanged from December 31, 2018.

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

	Amount				As a Percent of Ending Loan Balances
At December 31 (Dollars in Millions)	2019		2018		2019			2018
Residential Mortgages(a)
30-89 days	$	154	$	181		.22	%		.27	%
90 days or more		120		114		.17			.18
Nonperforming		241		296		.34			.46
Total	$	515	$	591		.73	%		.91	%
Credit Card
30-89 days	$	321	$	324		1.30	%		1.39	%
90 days or more		306		293		1.23			1.25
Nonperforming		—		—		—			—
Total	$	627	$	617		2.53	%		2.64	%
Other Retail
Retail Leasing
30-89 days	$	45	$	37		.53	%		.43	%
90 days or more		4		3		.05			.04
Nonperforming		13		12		.15			.14
Total	$	62	$	52		.73	%		.61	%
Home Equity and Second Mortgages
30-89 days	$	77	$	90		.51	%		.56	%
90 days or more		48		57		.32			.35
Nonperforming		116		145		.77			.90
Total	$	241	$	292		1.60	%		1.81	%
Other(b)
30-89 days	$	271	$	276		.81	%		.87	%
90 days or more		45		48		.13			.15
Nonperforming		36		40		.11			.13
Total	$	352	$	364		1.05	%		1.15	%

(a) Excludes $428 million of loans 30-89 days past due and $1.7 billion of loans 90 days or more past due at December 31, 2019, purchased from GNMA mortgage pools that continue to accrue interest, compared with $430 million and $1.7 billion at December 31, 2018, respectively.     

(b) Includes revolving credit, installment, automobile and student loans.    

Restructured Loans In certain circumstances, the Company may modify the terms of a loan to maximize the collection of amounts due when a borrower is experiencing financial difficulties or is expected to experience difficulties in the near-term. In most cases the modification is either a concessionary reduction in interest rate, extension of the maturity date or reduction in the principal balance that would otherwise not be considered.

Troubled Debt Restructurings Concessionary modifications are classified as TDRs unless the modification results in only an insignificant delay in the payments to be received. TDRs accrue interest if the borrower complies with the revised terms and conditions and has demonstrated repayment performance at a level commensurate with the modified terms over several payment cycles, which is generally six months or greater. At

December 31, 2019, performing TDRs were $3.8 billion, compared with $3.9 billion, $4.0 billion, $4.2 billion and $4.7 billion at December 31, 2018, 2017, 2016 and 2015, respectively. Loans classified as TDRs are considered impaired loans for reporting and measurement purposes.

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

The Company has also implemented certain residential mortgage loan restructuring programs that may result in TDRs. The Company modifies residential mortgage loans under Federal Housing Administration, United States Department of Veterans Affairs, and its own internal programs. Under these programs, the Company offers qualifying homeowners the opportunity to permanently modify their loan and achieve more affordable monthly payments by providing loan concessions. These concessions may include adjustments to interest rates, conversion of adjustable rates to fixed rates, extensions of maturity dates or deferrals of payments, capitalization of accrued interest and/or outstanding advances, or in limited situations, partial forgiveness of loan principal. In most instances, participation in residential mortgage loan restructuring programs requires the customer to complete a short-term trial period. A permanent loan modification is contingent on the customer successfully completing the trial period arrangement, and the loan documents are not modified until that time. The Company reports loans in a trial period arrangement as TDRs and continues to report them as TDRs after the trial period.

Credit card and other retail loan TDRs are generally part of distinct restructuring programs providing customers modification solutions over a specified time period, generally up to 60 months.

In accordance with regulatory guidance, the Company considers secured consumer loans that have had debt discharged through bankruptcy where the borrower has not reaffirmed the debt to be TDRs. If the loan amount exceeds the collateral value, the loan is charged down to collateral value and the remaining amount is reported as nonperforming.

Acquired loans restructured after acquisition are not considered TDRs for purposes of the Company’s accounting and disclosure if the loans evidenced credit deterioration as of the acquisition date and are accounted for in pools.

41    

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

			As a Percent of Performing TDRs
At December 31, 2019 (Dollars in Millions)	Performing TDRs		30-89 Days Past Due			90 Days or More Past Due			Nonperforming TDRs			Total TDRs
Commercial	$	279		4.4	%		2.2	%	$	87	(a)	$	366
Commercial real estate		160		.9			—			38	(b)		198
Residential mortgages		1,274		3.0			4.4			148			1,422	(d)
Credit card		263		10.8			6.3			—			263
Other retail		153		7.2			6.9			32	(c)		185	(e)
TDRs, excluding loans purchased from GNMA mortgage pools		2,129		4.3			4.2			305			2,434
Loans purchased from GNMA mortgage pools(g)		1,622		—			—			—			1,622	(f)
Total	$	3,751		2.4	%		2.4	%	$	305		$	4,056

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

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

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

(d) Includes $306 million of residential mortgage loans to borrowers that have had debt discharged through bankruptcy and $34 million in trial period arrangements or previously placed in trial period arrangements but not successfully completed.     

(e) Includes $85 million of other retail loans to borrowers that have had debt discharged through bankruptcy and $17 million in trial period arrangements or previously placed in trial period arrangements but not successfully completed.     

(f) Includes $137 million of Federal Housing Administration and United States Department of Veterans Affairs residential mortgage loans to borrowers that have had debt discharged through bankruptcy and $415 million in trial period arrangements or previously placed in trial period arrangements but not successfully completed.     

(g) Approximately 6.9 percent and 47.3 percent of the total TDR loans purchased from GNMA mortgage pools are 30-89 days past due and 90 days or more past due, respectively, but are not classified as delinquent as their repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs.     

Short-term Modifications The Company makes short-term modifications that it does not consider to be TDRs, in limited circumstances, to assist borrowers experiencing temporary hardships. Consumer lending programs include payment reductions, deferrals of up to three past due payments, and the ability to return to current status if the borrower makes required payments. The Company may also make short-term modifications to commercial lending loans, with the most common modification being an extension of the maturity date of three months or less. Such extensions generally are used when the maturity date is imminent and the borrower is experiencing some level of financial stress, but the Company believes the borrower will pay all contractual amounts owed. Short-term modifications were not material at December 31, 2019.

Nonperforming Assets The level of nonperforming assets represents another indicator of the potential for future credit losses. Nonperforming assets include nonaccrual loans, restructured loans not performing in accordance with modified terms and not accruing interest, restructured loans that have not met the performance period required to return to accrual status, OREO and other nonperforming assets owned by the Company.

Interest payments collected from assets on nonaccrual status are generally applied against the principal balance and not recorded as income. However, interest income may be recognized for interest payments if the remaining carrying amount of the loan is believed to be collectible.

At December 31, 2019, total nonperforming assets were $829 million, compared with $989 million at December 31, 2018. The $160 million (16.2 percent) decrease in nonperforming assets, from December 31, 2018 to December 31, 2019, was driven by improvements in nonperforming residential mortgages, commercial real estate loans, other retail loans and OREO. The ratio of total nonperforming assets to total loans and other real estate was 0.28 percent at December 31, 2019, compared with 0.34 percent at December 31, 2018.

OREO was $78 million at December 31, 2019, compared with $111 million at December 31, 2018, and was related to foreclosed properties that previously secured loan balances. These balances exclude foreclosed GNMA loans whose repayments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs.

42    

  TABLE 16   Nonperforming Assets(a)

At December 31 (Dollars in Millions)	2019			2018			2017			2016			2015
Commercial
Commercial	$	172		$	186		$	225		$	443		$	160
Lease financing		32			23			24			40			14
Total commercial		204			209			249			483			174
Commercial Real Estate
Commercial mortgages		74			76			108			87			92
Construction and development		8			39			34			37			35
Total commercial real estate		82			115			142			124			127
Residential Mortgages(b)		241			296			442			595			712
Credit Card		—			—			1			3			9
Other Retail
Retail leasing		13			12			8			2			3
Home equity and second mortgages		116			145			126			128			136
Other		36			40			34			27			23
Total other retail		165			197			168			157			162
Covered Loans		—			—			6			6			8
Total nonperforming loans		692			817			1,008			1,368			1,192
Other Real Estate(c)		78			111			141			186			280
Covered Other Real Estate		—			—			21			26			32
Other Assets		59			61			30			23			19
Total nonperforming assets	$	829		$	989		$	1,200		$	1,603		$	1,523
Accruing loans 90 days or more past due(b)	$	605		$	584		$	720		$	764		$	831
Nonperforming loans to total loans		.23	%		.28	%		.36	%		.50	%		.46	%
Nonperforming assets to total loans plus other real estate(c)		.28	%		.34	%		.43	%		.59	%		.58	%

Changes in Nonperforming Assets

(Dollars in Millions)	Commercial and Commercial Real Estate			Residential Mortgages, Credit Card and Other Retail			Total
Balance December 31, 2018	$	338		$	651		$	989
Additions to nonperforming assets
New nonaccrual loans and foreclosed properties		683			303			986
Advances on loans		14			2			16
Total additions		697			305			1,002
Reductions in nonperforming assets
Paydowns, payoffs		(217	)		(145	)		(362	)
Net sales		(266	)		(90	)		(356	)
Return to performing status		(13	)		(193	)		(206	)
Charge-offs(d)		(218	)		(20	)		(238	)
Total reductions		(714	)		(448	)		(1,162	)
Net additions to (reductions in) nonperforming assets		(17	)		(143	)		(160	)
Balance December 31, 2019	$	321		$	508		$	829

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

(b) Excludes $1.7 billion, $1.7 billion, $1.9 billion, $2.5 billion and $2.9 billion at December 31, 2019, 2018, 2017, 2016 and 2015, respectively, of loans purchased from GNMA mortgage pools that are 90 days or more past due that continue to accrue interest, as their repayments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs.    

(c) Foreclosed GNMA loans of $155 million, $235 million, $267 million, $373 million and $535 million at December 31, 2019, 2018, 2017, 2016 and 2015, respectively, continue to accrue interest and are recorded as other assets and excluded from nonperforming assets because they are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs.    

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

43    

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

	Amount				As a Percent of Ending Loan Balances
At December 31 (Dollars in Millions)	2019		2018		2019			2018
Residential
Illinois	$	10	$	11		.22	%		.25	%
California		7		11		.03			.04
Minnesota		6		5		.10			.08
New York		6		8		.66			.97
Oregon		4		5		.12			.15
All other states		41		66		.09			.16
Total residential		74		106		.09			.13
Commercial
California		3		3		.01			.01
Idaho		—		1		—			.09
All other states		1		1		—			—
Total commercial		4		5		—			—
Total	$	78	$	111		.03	%		.04	%

Analysis of Loan Net Charge-offs Total loan net charge-offs were $1.5 billion in 2019, compared with $1.4 billion in 2018. The $100 million (7.4 percent) increase in total net charge-offs in 2019, compared with 2018, reflected higher credit card, commercial, and commercial real estate loan net charge-offs, partially offset by lower residential mortgage loan net charge-offs. The ratio of total loan net charge-offs to average loans outstanding was 0.50 percent in 2019, compared with 0.48 percent in 2018.

Commercial and commercial real estate loan net charge-offs for 2019 were $299 million (0.21 percent of average loans outstanding), compared with $232 million (0.17 percent of average loans outstanding) in 2018. The increase in net charge-offs in 2019, compared with 2018, reflected higher commercial and commercial real estate loan charge-offs and lower commercial real estate loan recoveries.

Residential mortgage loan net charge-offs for 2019 were $3 million, compared with $17 million (0.03 percent of average loans outstanding) in 2018. Credit card loan net charge-offs in 2019 were $893 million (3.83 percent of average loans outstanding), compared with $846 million (3.90 percent of average loans outstanding) in 2018. Other retail loan net charge-offs for 2019 were $259 million (0.45 percent of average loans outstanding), compared with $259 million (0.46 percent of average loans outstanding) in 2018. The increase in total residential mortgage, credit card and other retail loan net charge-offs in 2019, compared with 2018, reflected higher credit card loan net charge-offs due to portfolio growth, partially offset by lower residential mortgage loan net charge-offs due to favorable economic conditions during 2019.

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  TABLE 17   Net Charge-offs as a Percent of Average Loans Outstanding

Year Ended December 31	2019			2018			2017			2016			2015
Commercial
Commercial		.28	%		.25	%		.27	%		.35	%		.26	%
Lease financing		.22			.25			.31			.34			.27
Total commercial		.28			.25			.28			.35			.26
Commercial Real Estate
Commercial mortgages		.04			(.06	)		.03			(.01	)		.02
Construction and development		.02			(.02	)		(.07	)		(.08	)		(.33	)
Total commercial real estate		.04			(.05	)		—			(.03	)		(.07	)
Residential Mortgages		—			.03			.06			.11			.21
Credit Card		3.83			3.90			3.76			3.30			3.61
Other Retail
Retail leasing		.15			.15			.14			.09			.09
Home equity and second mortgages		(.02	)		(.02	)		(.03	)		.01			.24
Other		.76			.79			.75			.71			.65
Total other retail		.45			.46			.44			.42			.45
Total loans		.50	%		.48	%		.48	%		.47	%		.47	%

Analysis and Determination of the Allowance for Credit Losses Through December 31, 2019, the allowance for credit losses was established to reserve for probable and estimable losses incurred in the Company’s loan and lease portfolio, including unfunded credit commitments. Effective January 1, 2020, the Company adopted new accounting guidance which changes previous impairment recognition to a model that is based on expected losses rather than incurred losses. The allowance for credit losses is increased through provisions charged to earnings and reduced by net charge-offs. Management evaluates the appropriateness of the allowance for credit losses on a quarterly basis. The evaluation of each element and the overall allowance is based on a continuing assessment of problem loans, recent loss experience and other factors, including external factors such as regulatory guidance and economic conditions. Because business processes and credit risks associated with unfunded credit commitments are essentially the same as for loans, the Company utilizes similar processes to estimate its liability for unfunded credit commitments, which is included in other liabilities in the Consolidated Balance Sheet. Both the allowance for loan losses and the liability for unfunded credit commitments are included in the Company’s analysis of credit losses and reported reserve ratios.

At December 31, 2019, the allowance for credit losses was $4.5 billion (1.52 percent of period-end loans), compared with an allowance of $4.4 billion (1.55 percent of period-end loans) at December 31, 2018. The ratio of the allowance for credit losses to nonperforming loans was 649 percent at December 31, 2019, compared with 544 percent at December 31, 2018. The ratio of the allowance for credit losses to annual loan net charge-offs at December 31, 2019, was 309 percent, compared with 328 percent at December 31, 2018. Management determined the allowance for credit losses was appropriate at December 31, 2019.

The allowance recorded for loans in the commercial lending segment through December 31, 2019, was based on reviews of individual credit relationships and considered the migration analysis of commercial lending segment loans and actual loss experience. For each loan type, this historical loss experience

was adjusted as necessary to consider any relevant changes in portfolio composition, lending policies, underwriting standards, risk management practices or economic conditions. The results of the analysis were evaluated quarterly to confirm the selected loss experience was appropriate for each commercial loan type. The allowance recorded for impaired loans greater than $5 million in the commercial lending segment was based on an individual loan analysis utilizing expected cash flows discounted using the original effective interest rate, the observable market price of the loan, or the fair value of the collateral, less selling costs, for collateral-dependent loans, rather than the migration analysis. The allowance recorded for all other commercial lending segment loans was determined on a homogenous pool basis and included consideration of product mix, risk characteristics of the portfolio, delinquency status, bankruptcy experience, portfolio growth and historical losses, adjusted for current trends. The allowance established for commercial lending segment loans was $2.3 billion at December 31, 2019 compared with $2.2 billion December 31, 2018, reflecting overall portfolio growth.

The allowance recorded for TDR loans and purchased impaired loans in the consumer lending segment through December 31, 2019, was determined on a homogenous pool basis utilizing expected cash flows discounted using the original effective interest rate of the pool, or the prior quarter effective rate, respectively. The allowance for collateral-dependent loans in the consumer lending segment was determined based on the fair value of the collateral less costs to sell. The allowance recorded for all other consumer lending segment loans was determined on a homogenous pool basis and included consideration of product mix, risk characteristics of the portfolio, bankruptcy experience, delinquency status, refreshed LTV ratios when possible, portfolio growth and historical losses, adjusted for current trends. Credit card and other retail loans 90 days or more past due are generally not placed on nonaccrual status because of the relatively short period of time to charge-off and, therefore, were excluded from nonperforming loans and measures that include nonperforming loans as part of the calculation.

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  TABLE 18   Summary of Allowance for Credit Losses

(Dollars in Millions)	2019			2018			2017			2016			2015
Balance at beginning of year	$	4,441		$	4,417		$	4,357		$	4,306		$	4,375
Charge-Offs
Commercial
Commercial		380			328			387			388			289
Lease financing		19			22			27			29			25
Total commercial		399			350			414			417			314
Commercial real estate
Commercial mortgages		17			6			28			12			20
Construction and development		4			3			2			10			2
Total commercial real estate		21			9			30			22			22
Residential mortgages		34			48			65			85			135
Credit card		1,028			970			887			759			726
Other retail
Retail leasing		24			21			16			9			8
Home equity and second mortgages		19			25			31			40			73
Other		342			337			308			283			238
Total other retail		385			383			355			332			319
Total charge-offs		1,867			1,760			1,751			1,615			1,516
Recoveries
Commercial
Commercial		107			91			140			81			84
Lease financing		7			8			10			11			11
Total commercial		114			99			150			92			95
Commercial real estate
Commercial mortgages		5			23			20			16			15
Construction and development		2			5			10			19			35
Total commercial real estate		7			28			30			35			50
Residential mortgages		31			31			28			25			26
Credit card		135			124			101			83			75
Other retail
Retail leasing		11			9			6			4			3
Home equity and second mortgages		22			28			36			39			35
Other		93			87			70			68			60
Total other retail		126			124			112			111			98
Total recoveries		413			406			421			346			344
Net Charge-Offs
Commercial
Commercial		273			237			247			307			205
Lease financing		12			14			17			18			14
Total commercial		285			251			264			325			219
Commercial real estate
Commercial mortgages		12			(17	)		8			(4	)		5
Construction and development		2			(2	)		(8	)		(9	)		(33	)
Total commercial real estate		14			(19	)		–			(13	)		(28	)
Residential mortgages		3			17			37			60			109
Credit card		893			846			786			676			651
Other retail
Retail leasing		13			12			10			5			5
Home equity and second mortgages		(3	)		(3	)		(5	)		1			38
Other		249			250			238			215			178
Total other retail		259			259			243			221			221
Total net charge-offs		1,454			1,354			1,330			1,269			1,172
Provision for credit losses		1,504			1,379			1,390			1,324			1,132
Other changes		–			(1	)		–			(4	)		(29	)
Balance at end of year	$	4,491		$	4,441		$	4,417		$	4,357		$	4,306
Components
Allowance for loan losses	$	4,020		$	3,973		$	3,925		$	3,813		$	3,863
Liability for unfunded credit commitments		471			468			492			544			443
Total allowance for credit losses	$	4,491		$	4,441		$	4,417		$	4,357		$	4,306
Allowance for Credit Losses as a Percentage of
Period-end loans		1.52	%		1.55	%		1.58	%		1.59	%		1.65	%
Nonperforming loans		649			544			438			318			361
Nonperforming and accruing loans 90 days or more past due		346			317			256			204			213
Nonperforming assets		542			449			368			272			283
Net charge-offs		309			328			332			343			367

46    

  TABLE 19   Elements of the Allowance for Credit Losses

	Allowance Amount										Allowance as a Percent of Loans
At December 31 (Dollars in Millions)	2019		2018		2017		2016		2015		2019			2018			2017			2016			2015
Commercial
Commercial	$	1,413	$	1,388	$	1,298	$	1,376	$	1,231		1.44	%		1.43	%		1.41	%		1.56	%		1.48	%
Lease financing		71		66		74		74		56		1.25			1.18			1.32			1.36			1.06
Total commercial		1,484		1,454		1,372		1,450		1,287		1.43			1.42			1.41			1.55			1.46
Commercial Real Estate
Commercial mortgages		272		269		295		282		285		.93			.94			1.00			.89			.90
Construction and development		527		531		536		530		439		5.10			4.85			4.83			4.61			4.24
Total commercial real estate		799		800		831		812		724		2.01			2.02			2.05			1.88			1.72
Residential Mortgages		433		455		449		510		631		.61			.70			.75			.89			1.18
Credit Card		1,128		1,102		1,056		934		883		4.55			4.72			4.76			4.29			4.20
Other Retail
Retail leasing		78		25		21		11		12		.92			.29			.26			.17			.23
Home equity and second mortgages		232		265		298		300		448		1.54			1.64			1.83			1.83			2.73
Other		337		340		359		306		283		1.00			1.07			1.09			.98			.96
Total other retail		647		630		678		617		743		1.13			1.12			1.18			1.15			1.45
Covered Loans		–		–		31		34		38		–			–			.99			.89			.83
Total allowance	$	4,491	$	4,441	$	4,417	$	4,357	$	4,306		1.52	%		1.55	%		1.58	%		1.59	%		1.65	%

When evaluating the appropriateness of the allowance for credit losses for any loans and lines in a junior lien position, the Company considered the delinquency and modification status of the first lien. At December 31, 2019, the Company serviced the first lien on 40 percent of the home equity loans and lines in a junior lien position. The Company also considered information received from its primary regulator on the status of the first liens that were serviced by other large servicers in the industry and the status of first lien mortgage accounts reported on customer credit bureau files. Regardless of whether or not the Company serviced the first lien, an assessment was made of economic conditions, problem loans, recent loss experience and other factors in determining the allowance for credit losses. Based on the available information, the Company estimated $273 million or 1.8 percent of its total home equity portfolio at December 31, 2019, represented non-delinquent junior liens where the first lien was delinquent or modified.

The Company used historical loss experience on the loans and lines in a junior lien position where the first lien was serviced by the Company, or could be identified in credit bureau data, to establish loss estimates for junior lien loans and lines the Company serviced that were current, but the first lien was delinquent or modified. Historically, the number of junior lien defaults has been a small percentage of the total portfolio (approximately 1 percent annually), while the long-term average loss rate on loans that default has been approximately 90 percent. In addition, the Company obtains updated credit scores on its home equity portfolio each quarter, and in some cases more frequently, and used this information to qualitatively supplement its loss estimation methods. Credit score distributions for the portfolio are monitored monthly and any changes in the distribution are one of the factors considered in

assessing the Company’s loss estimates. In its evaluation of the allowance for credit losses, the Company also considered the increased risk of loss associated with home equity lines that are contractually scheduled to convert from a revolving status to a fully amortizing payment and with residential lines and loans that have a balloon payoff provision.

The allowance established for consumer lending segment loans was $2.2 billion at December 31, 2019 and 2018, reflecting overall portfolio growth, partially offset by continued improvement in housing market conditions.

In addition, through December 31, 2019, the evaluation of the appropriate allowance for credit losses on purchased non-impaired loans acquired after January 1, 2009, in the various loan segments considered credit discounts recorded as a part of the initial determination of the fair value of the loans. For these loans, no allowance for credit losses was recorded at the purchase date. Credit discounts representing the principal losses expected over the life of the loans were a component of the initial fair value. Subsequent to the purchase date, the methods utilized to estimate the required allowance for credit losses for these loans was similar to originated loans; however, the Company recorded a provision for credit losses only when the required allowance exceeded any remaining credit discounts.

The evaluation of the appropriate allowance for credit losses for purchased impaired loans in the various loan segments through December 31, 2019, considered the expected cash flows to be collected from the borrower. These loans were initially recorded at fair value and, therefore, no allowance for credit losses was recorded at the purchase date.

Subsequent to the purchase date, the expected cash flows of purchased loans were subject to evaluation. Decreases in expected cash flows were recognized by recording an allowance

47    

for credit losses. If the expected cash flows on the purchased loans increased such that a previously recorded impairment allowance could have been reversed, the Company recorded a reduction in the allowance. Increases in expected cash flows of purchased loans, when there are no reversals of previous impairment allowances, were recognized over the remaining life of the loans. Refer to Note 1 of the Notes to Consolidated Financial Statements, for more information.

The Company’s methodology for determining the appropriate allowance for credit losses for both loan segments also considered the imprecision inherent in the methodologies used. As a result, in addition to the amounts determined under the methodologies described above, management also considered the potential impact of other qualitative factors which include, but are not limited to, the following: economic factors; geographic and other concentration risks; delinquency and nonaccrual trends; current business conditions; changes in lending policy, underwriting standards and other relevant business practices; results of internal review; and the regulatory environment. The consideration of these items resulted in adjustments to allowance amounts included in the Company’s allowance for credit losses for both loan segments. Table 19 shows the amount of the allowance for credit losses by loan class and underlying portfolio category.

Although the Company determined the amount of each element of the allowance separately and considers this process to be an important credit management tool, the entire allowance for credit losses is available for the entire loan portfolio. The actual amount of losses can vary significantly from the estimated amounts.

Residual Value Risk Management The Company manages its risk to changes in the residual value of leased vehicles, office and business equipment, and other assets through disciplined residual valuation setting at the inception of a lease, diversification of its leased assets, regular residual asset valuation reviews and monitoring of residual value gains or losses upon the disposition of assets. Lease originations are subject to the same well-defined underwriting standards referred to in the “Credit Risk Management” section, which includes an evaluation of the residual value risk. Retail lease residual value risk is mitigated further by effective end-of-term marketing of off-lease vehicles.

Included in the retail leasing portfolio was approximately $6.6 billion of retail leasing residuals at December 31, 2019 and 2018. The Company monitors concentrations of leases by manufacturer and vehicle type. As of December 31, 2019, vehicle lease residuals related to sport utility vehicles were 48.8 percent of the portfolio, while truck and crossover utility vehicle classes represented approximately 25.3 percent and 15.1 percent of the portfolio, respectively. At year-end 2019, the individual vehicle model with the largest residual value outstanding represented 12.2 percent of the aggregate residual value of all vehicles in the portfolio. At December 31, 2019, the weighted-average origination term of the portfolio was 41 months, compared with 40 months at December 31, 2018. At December 31, 2019, the

commercial leasing portfolio had $481 million of residuals, compared with $495 million at December 31, 2018. At year-end 2019, lease residuals related to business and office equipment represented 33.9 percent of the total residual portfolio, while trucks and other transportation equipment represented 31.2 percent.

Operational Risk Management Operational risk is the risk of loss arising from inadequate or failed internal processes or systems, people, or adverse external events, including the risk of loss resulting from fraud, litigation and breaches in data security. The Company operates in many different businesses in diverse markets and relies on the ability of its employees and systems to process a high number of transactions. Operational risk is inherent in all business activities, and the management of this risk is important to the achievement of the Company’s objectives. Business lines have direct and primary responsibility and accountability for identifying, controlling, and monitoring operational risks embedded in their business activities. The Company maintains a system of controls with the objective of providing proper transaction authorization and execution, proper system operations, proper oversight of third parties with whom it does business, safeguarding of assets from misuse or theft, and ensuring the reliability and security of financial and other data.

Business continuation and disaster recovery planning is also critical to effectively managing operational risks. Each business unit of the Company is required to develop, maintain and test these plans at least annually to ensure that recovery activities, if needed, can support mission critical functions, including technology, networks and data centers supporting customer applications and business operations.

While the Company believes it has designed effective processes to minimize operational risks, there is no absolute assurance that business disruption or operational losses would not occur from an external event or internal control breakdown. On an ongoing basis, management makes process changes and investments to enhance its systems of internal controls and business continuity and disaster recovery plans.

In the past, the Company has experienced attack attempts on its computer systems, including various denial-of-service attacks on customer-facing websites. The Company has not experienced any material losses relating to these attempts, as a result of its controls, processes and systems to protect its networks, computers, software and data from attack, damage or unauthorized access but future attacks could be more disruptive or damaging. Attack attempts on the Company’s computer systems are evolving and increasing, and the Company continues to develop and enhance its controls and processes to protect against these attempts.

Compliance Risk Management The Company may suffer legal or regulatory sanctions, material financial loss, or damage to its reputation through failure to comply with laws, regulations, rules, standards of good practice, and codes of conduct, including those related to compliance with Bank Secrecy Act/anti-money laundering requirements, sanctions compliance requirements as

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administered by the Office of Foreign Assets Control, consumer protection and other requirements. The Company has controls and processes in place for the assessment, identification, monitoring, management and reporting of compliance risks and issues. Refer to “Supervision and Regulation” in the Company’s Annual Report on Form 10-K for further discussion of the regulatory framework applicable to bank holding companies and their subsidiaries.

Interest Rate Risk Management In the banking industry, changes in interest rates are a significant risk that can impact earnings and the safety and soundness of an entity. The Company manages its exposure to changes in interest rates through asset and liability management activities within guidelines established by its Asset Liability Management Committee (“ALCO”) and approved by the Board of Directors. The ALCO has the responsibility for approving and ensuring compliance with the ALCO management policies, including interest rate risk exposure. One way the Company measures and analyzes its interest rate risk is through net interest income simulation analysis.

Simulation analysis incorporates substantially all of the Company’s assets and liabilities and off-balance sheet instruments, together with forecasted changes in the balance sheet and assumptions that reflect the current interest rate environment. Through this simulation, management estimates the impact on net interest income of various interest rate changes that differ in the direction, amount and speed of change over

time, as well as the shape of the yield curve. This simulation includes assumptions about how the balance sheet is likely to be affected by changes in loan and deposit growth. Assumptions are made to project interest rates for new loans and deposits based on historical analysis, management’s outlook and re-pricing strategies. These assumptions are reviewed and validated on a periodic basis with sensitivity analysis being provided for key variables of the simulation. The results are reviewed monthly by the ALCO and are used to guide asset/liability management strategies.

The Company manages its interest rate risk position by holding assets with desired interest rate risk characteristics on its balance sheet, implementing certain pricing strategies for loans and deposits and selecting derivatives and various funding and investment portfolio strategies.

Table 20 summarizes the projected impact to net interest income over the next 12 months of various potential interest rate changes. The sensitivity of the projected impact to net interest income over the next 12 months is dependent on balance sheet growth, product mix, deposit behavior, pricing and funding decisions. While the Company utilizes assumptions based on historical information and expected behaviors, actual outcomes could vary significantly. For example, if deposit outflows are more limited (stable) than the assumptions the Company used in preparing Table 20, the projected impact to net interest income would be an increase of 1.26 percent in the “Up 50 bps” and 1.93 percent in the “Up 200 bps” scenarios.

  TABLE 20   Sensitivity of Net Interest Income

	December 31, 2019											December 31, 2018
	Down 50 bps Immediate			Up 50 bps Immediate			Down 200 bps Gradual		Up 200 bps Gradual			Down 50 bps Immediate			Up 50 bps Immediate			Down 200 bps Gradual			Up 200 bps Gradual
Net interest income		(1.43	)%		.83	%		*		.21	%		(1.43	)%		1.02	%		(3.90	)%		1.45	%

* Given the level of interest rates, downward rate scenario is not computed.    

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

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

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

– To mitigate changes in value of the Company’s unfunded mortgage loan commitments, funded MLHFS and MSRs;

– To mitigate remeasurement volatility of foreign currency denominated balances; and

– To mitigate the volatility of the Company’s net investment in foreign operations driven by fluctuations in foreign currency exchange rates.

In addition, the Company enters into interest rate and foreign exchange derivative contracts to support the business requirements of its customers (customer-related positions). The Company minimizes the market and liquidity risks of customer-related positions by either entering into similar offsetting positions with broker-dealers, or on a portfolio basis by entering into other derivative or non-derivative financial instruments that partially or fully offset the exposure from these customer-related positions. The Company may enter into derivative contracts that are either exchange-traded, centrally cleared through clearinghouses or over-the-counter. The Company does not utilize derivatives for speculative purposes.

The Company does not designate all of the derivatives that it enters into for risk management purposes as accounting hedges because of the inefficiency of applying the accounting requirements and may instead elect fair value accounting for the related hedged items. In particular, the Company enters into interest rate swaps, swaptions, forward commitments to buy to-be-announced securities (“TBAs”), U.S. Treasury and Eurodollar futures and options on U.S. Treasury futures to mitigate fluctuations in the value of its MSRs, but does not designate those derivatives as accounting hedges. The estimated net sensitivity to changes in interest rates of the fair value of the MSRs and the related derivative instruments at December 31, 2019, to an immediate 25, 50 and 100 bps downward movement in interest rates would be a decrease of approximately $1 million, $10 million and $50 million, respectively. An immediate upward movement in interest rates at December 31, 2019, of 25, 50 and 100 bps would result in a decrease of approximately $2 million, $10 million and $65 million, in the fair value of the MSRs and related derivative instruments, respectively. Refer to Note 9 of the Notes to Consolidated Financial Statements for additional information regarding MSRs.

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

its residential mortgage loan production activities. At December 31, 2019, the Company had $6.9 billion of forward commitments to sell, hedging $4.6 billion of MLHFS and $3.0 billion of unfunded mortgage loan commitments. The forward commitments to sell and the unfunded mortgage loan commitments on loans intended to be sold are considered derivatives under the accounting guidance related to accounting for derivative instruments and hedging activities. The Company has elected the fair value option for the MLHFS.

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

For additional information on derivatives and hedging activities, refer to Notes 19 and 20 in the Notes to Consolidated Financial Statements.

LIBOR Transition In July 2017, the United Kingdom’s Financial Conduct Authority announced that it would no longer require banks to submit rates for the London InterBank Offered Rate (“LIBOR”) after 2021. The Company holds financial instruments that will be impacted by the discontinuance of LIBOR, including certain loans, investment securities, derivatives, borrowings and other financial instruments that use LIBOR as the benchmark rate. The Company also provides various services to customers in its capacity as trustee, which involve financial instruments that will be similarly impacted by the discontinuance of LIBOR. The Company anticipates these financial instruments will require transition to a new reference rate. This transition will occur over the next several years as many of these arrangements do not have an alternative rate referenced in their contracts or a clear path for the parties to agree upon an alternative reference rate. In order to facilitate the transition process, the Company has instituted a LIBOR Transition Office and commenced an enterprise-wide project to identify, assess and monitor risks associated with the expected discontinuance or unavailability of LIBOR, actively engage with industry working groups and regulators, achieve operational readiness and engage impacted customers. Refer to “Risk Factors” beginning on page 146, for further discussion on potential risks that could adversely affect the Company’s financial results as a result of the LIBOR transition.

Market Risk Management In addition to interest rate risk, the Company is exposed to other forms of market risk, principally related to trading activities which support customers’ strategies

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to manage their own foreign currency, interest rate risk and funding activities. For purposes of its internal capital adequacy assessment process, the Company considers risk arising from its trading activities, as well as the remeasurement volatility of foreign currency denominated balances included on its Consolidated Balance Sheet (collectively, “Covered Positions”), employing methodologies consistent with the requirements of regulatory rules for market risk. The Company’s Market Risk Committee (“MRC”), within the framework of the ALCO, oversees market risk management. The MRC monitors and reviews the Company’s Covered Positions and establishes policies for market risk management, including exposure limits for each portfolio. The Company uses a VaR approach to measure general market risk. Theoretically, VaR represents the statistical risk of loss the Company has to adverse market movements over a one-day time horizon. The Company uses the Historical Simulation method to calculate VaR for its Covered Positions measured at the ninety-ninth percentile using a one-year look-back period for distributions derived from past market data. The market factors used in the calculations include those pertinent to market risks inherent in the underlying trading portfolios, principally those that affect the Company’s corporate bond trading business, foreign currency transaction business, client derivatives business, loan trading business and municipal securities business, as well as those inherent in the Company’s foreign denominated balances and the derivatives used to mitigate the related measurement volatility. On average, the Company expects the one-day VaR to be exceeded by actual losses two to three times per year related to these positions. The Company monitors the accuracy of internal VaR models and modeling processes by back-testing model performance, regularly updating the historical data used by the VaR models and regular model validations to assess the accuracy of the models’ input, processing, and reporting components. All models are required to be independently reviewed and approved prior to being placed in use. If the Company were to experience market losses in excess of the estimated VaR more often than expected, the VaR models and associated assumptions would be analyzed and adjusted.

The average, high, low and period-end one-day VaR amounts for the Company’s Covered Positions were as follows:

Year Ended December 31 (Dollars in Millions)	2019		2018
Average	$	1	$	1
High		2		1
Low		1		1
Period-end		1		1

The Company did not experience any actual losses for its combined Covered Positions that exceeded VaR during 2019 and 2018. The Company stress tests its market risk measurements to provide management with perspectives on market events that may not be captured by its VaR models, including worst case historical market movement combinations that have not necessarily occurred on the same date.

The Company calculates Stressed VaR using the same underlying methodology and model as VaR, except that a historical continuous one-year look-back period is utilized that reflects a period of significant financial stress appropriate to the Company’s Covered Positions. The period selected by the Company includes the significant market volatility of the last four months of 2008.

The average, high, low and period-end one-day Stressed VaR amounts for the Company’s Covered Positions were as follows:

Year Ended December 31 (Dollars in Millions)	2019		2018
Average	$	6	$	5
High		9		8
Low		4		2
Period-end		5		6

Valuations of positions in client derivatives and foreign currency activities are based on discounted cash flow or other valuation techniques using market-based assumptions. These valuations are compared to third-party quotes or other market prices to determine if there are significant variances. Significant variances are approved by senior management in the Company’s corporate functions. Valuation of positions in the corporate bond trading, loan trading and municipal securities businesses are based on trader marks. These trader marks are evaluated against third-party prices, with significant variances approved by senior management in the Company’s corporate functions.

The Company also measures the market risk of its hedging activities related to residential MLHFS and MSRs using the Historical Simulation method. The VaRs are measured at the ninety-ninth percentile and employ factors pertinent to the market risks inherent in the valuation of the assets and hedges. A one-year look-back period is used to obtain past market data for the models.

The average, high and low VaR amounts for the residential MLHFS and related hedges and the MSRs and related hedges were as follows:

Year Ended December 31 (Dollars in Millions)	2019		2018
Residential Mortgage Loans Held For Sale and Related Hedges
Average	$	3	$	1
High		8		2
Low		–		–
Mortgage Servicing Rights and Related Hedges
Average	$	7	$	5
High		11		7
Low		4		4

Liquidity Risk Management The Company’s liquidity risk management process is designed to identify, measure, and manage the Company’s funding and liquidity risk to meet its daily funding needs and to address expected and unexpected

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

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

The Company’s liquidity policy requires it to maintain diversified wholesale funding sources to avoid maturity, entity and market concentrations. The Company operates a Cayman Islands branch for issuing Eurodollar time deposits. In addition, the Company has relationships with dealers to issue national market retail and institutional savings certificates and short-term and medium-term notes. The Company also maintains a significant correspondent banking network and relationships. Accordingly, the Company has access to national federal funds, funding through repurchase agreements and sources of stable certificates of deposit and commercial paper.

The Company regularly projects its funding needs under various stress scenarios and maintains a contingency funding plan consistent with the Company’s access to diversified sources of contingent funding. The Company maintains a substantial level of total available liquidity in the form of on-balance sheet and off-balance sheet funding sources. These liquidity sources include cash at the Federal Reserve Bank and certain European central banks, unencumbered liquid assets, and capacity to borrow from the FHLB and at Federal Reserve Bank’s Discount Window. Unencumbered liquid assets in the Company’s investment securities portfolio provides asset liquidity through the Company’s ability to sell the securities or pledge and borrow against them. At

December 31, 2019, the fair value of unencumbered investment securities totaled $114.2 billion, compared with $100.2 billion at December 31, 2018. Refer to Note 4 of the Notes to Consolidated Financial Statements and “Balance Sheet Analysis” for further information on investment securities maturities and trends. Asset liquidity is further enhanced by the Company’s practice of pledging loans to access secured borrowing facilities through the FHLB and Federal Reserve Bank. At December 31, 2019, the Company could have borrowed an additional $97.4 billion from the FHLB and Federal Reserve Bank based on collateral available for additional borrowings.

The Company’s diversified deposit base provides a sizeable source of relatively stable and low-cost funding, while reducing the Company’s reliance on the wholesale markets. Total deposits were $361.9 billion at December 31, 2019, compared with $345.5 billion at December 31, 2018. Refer to Table 14 and “Balance Sheet Analysis” for further information on the Company’s deposits.

Additional funding is provided by long-term debt and short-term borrowings. Long-term debt was $40.2 billion at December 31, 2019, and is an important funding source because of its multi-year borrowing structure. Refer to Note 13 of the Notes to Consolidated Financial Statements for information on the terms and maturities of the Company’s long-term debt issuances and “Balance Sheet Analysis” for discussion on long-term debt trends. Short-term borrowings were $23.7 billion at December 31, 2019, and supplement the Company’s other funding sources. Refer to Note 12 of the Notes to Consolidated Financial Statements and “Balance Sheet Analysis” for information on the terms and trends of the Company’s short-term borrowings.

The Company’s ability to raise negotiated funding at competitive prices is influenced by rating agencies’ views of the Company’s credit quality, liquidity, capital and earnings. Table 21 details the rating agencies’ most recent assessments.

In addition to assessing liquidity risk on a consolidated basis, the Company monitors the parent company’s liquidity. The parent company’s routine funding requirements consist primarily of operating expenses, dividends paid to shareholders, debt service, repurchases of common stock and funds used for

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  TABLE 21   Debt Ratings

	Moody’s		Standard & Poor’s		Fitch		Dominion Bond Rating Service
U.S. Bancorp
Long-term issuer rating		A1		A+		AA-		AA
Short-term issuer rating				A-1		F1+		R-1 (middle)
Senior unsecured debt		A1		A+		AA-		AA
Subordinated debt		A1		A-		A+		AA (low)
Junior subordinated debt		A2		BBB				AA (low)
Preferred stock		A3		BBB		BBB		A
Commercial paper		P-1				F1+
U.S. Bank National Association
Long-term issuer rating		A1		AA-		AA-		AA (high)
Short-term issuer rating		P-1		A-1+		F1+		R-1 (high)
Long-term deposits		Aa1				AA		AA (high)
Short-term deposits		P-1				F1+
Senior unsecured debt		A1		AA-		AA-		AA (high)
Subordinated debt		A1		A		A+		AA
Commercial paper		P-1		A-1+		F1+
Counterparty risk assessment		Aa2(cr)/P-1(cr)
Counterparty risk rating		Aa3/P-1
Baseline credit assessment		aa3

acquisitions. The parent company obtains funding to meet its obligations from dividends collected from its subsidiaries and the issuance of debt and capital securities. The Company establishes limits for the minimal number of months into the future where the parent company can meet existing and forecasted obligations with cash and securities held that can be readily monetized. The Company measures and manages this limit in both normal and adverse conditions. The Company maintains sufficient funding to meet expected capital and debt service obligations for 24 months without the support of dividends from subsidiaries and assuming access to the wholesale markets is maintained. The Company maintains sufficient liquidity to meet its capital and debt service obligations for 12 months under adverse conditions without the support of dividends from subsidiaries or access to the wholesale markets. The parent company is currently well in excess of required liquidity minimums.

Under United States Securities and Exchange Commission rules, the parent company is classified as a “well-known seasoned issuer,” which allows it to file a registration statement that does not have a limit on issuance capacity. “Well-known seasoned issuers” generally include those companies with outstanding common securities with a market value of at least $700 million held by non-affiliated parties or those companies that have issued at least $1 billion in aggregate principal amount of non-convertible securities, other than common equity, in the last three years. However, the parent company’s ability to issue debt and other securities under a registration statement filed with the United States Securities and Exchange Commission under these rules is limited by the debt issuance authority granted by the Company’s Board of Directors and/or the ALCO policy.

At December 31, 2019, parent company long-term debt outstanding was $18.6 billion, compared with $16.3 billion at

December 31, 2018. The increase was primarily due to $2.7 billion of medium-term note and $1.0 billion of subordinated note issuances, partially offset by $1.5 billion of medium-term note repayments. As of December 31, 2019, there was no parent company debt scheduled to mature in 2020. Future debt maturities may be met through medium-term note and capital security issuances and dividends from subsidiaries, as well as from parent company cash and cash equivalents.

Dividend payments to the Company by its subsidiary bank are subject to regulatory review and statutory limitations and, in some instances, regulatory approval. In general, dividends to the parent company from its banking subsidiary are limited by rules which compare dividends to net income for regulatorily-defined periods. For further information, see Note 24 of the Notes to Consolidated Financial Statements.

The Company is subject to a regulatory Liquidity Coverage Ratio (“LCR”) requirement which requires banks to maintain an adequate level of unencumbered high quality liquid assets to meet estimated liquidity needs over a 30-day stressed period. At December 31, 2019, the Company was compliant with this requirement.

European Exposures The Company provides merchant processing and corporate trust services in Europe either directly or through banking affiliations in Europe. Revenue generated from sources in Europe represented approximately 2 percent of the Company’s total net revenue for 2019. Operating cash for these businesses is deposited on a short-term basis typically with certain European central banks. For deposits placed at other European banks, exposure is mitigated by the Company placing deposits at multiple banks and managing the amounts on deposit at any bank based on institution-specific deposit limits. At December 31, 2019, the Company had an aggregate amount on

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  TABLE 22   Contractual Obligations

	Payments Due By Period
At December 31, 2019 (Dollars in Millions)	One Year or Less		Over One Through Three Years		Over Three Through Five Years		Over Five Years		Total
Contractual Obligations(a)
Long-term debt(b)	$	3,772	$	15,728	$	8,462	$	12,205	$	40,167
Operating leases		296		493		312		391		1,492
Benefit obligations(c)		25		56		63		212		356
Time deposits		37,731		3,883		1,275		5		42,894
Contractual interest payments(d)		1,758		1,523		925		738		4,944
Equity investment commitments		2,048		829		28		66		2,971
Other(e)		196		110		27		100		433
Total	$	45,826	$	22,622	$	11,092	$	13,717	$	93,257

(a) Unrecognized tax positions of $432 million at December 31, 2019, are excluded as the Company cannot make a reasonably reliable estimate of the period of cash settlement with the respective taxing authority.

(b) Includes obligations under finance leases.

(c) Amounts only include obligations related to the unfunded non-qualified pension plans.

(d) Includes accrued interest and future contractual interest obligations.

(e) Primarily includes purchase obligations for goods and services covered by noncancellable contracts including cancellation fees.

deposit with European banks of approximately $8.5 billion, predominately with the Central Bank of Ireland and Bank of England.

In addition, the Company provides financing to domestic multinational corporations that generate revenue from customers in European countries, transacts with various European banks as counterparties to certain derivative-related activities, and through a subsidiary, manages money market funds that hold certain investments in European sovereign debt. Any deterioration in economic conditions in Europe, including the potential negative impact of the United Kingdom’s withdrawal from the European Union (“Brexit”), is not expected to have a significant effect on the Company related to these activities. The Company is focused on providing continuity of services, with minimal disruption resulting from Brexit, to customers with activities in European countries. The Company has made certain structural changes to its legal entities and operations in the United Kingdom and European Union, where needed, and migrated certain business activities to the appropriate jurisdictions to continue to provide such services and generate revenue.

Off-Balance Sheet Arrangements Off-balance sheet arrangements include any contractual arrangements to which an unconsolidated entity is a party, under which the Company has an obligation to provide credit or liquidity enhancements or market risk support. Off-balance sheet arrangements also include any obligation related to a variable interest held in an unconsolidated entity that provides financing, liquidity, credit enhancement or market risk support. The Company has not utilized private label asset securitizations as a source of funding.

Commitments to extend credit are legally binding and generally have fixed expiration dates or other termination clauses. Many of the Company’s commitments to extend credit expire without being drawn and, therefore, total commitment amounts do not necessarily represent future liquidity requirements or the Company’s exposure to credit loss. Commitments to extend credit also include consumer credit lines that are cancelable upon

notification to the consumer. Total contractual amounts of commitments to extend credit at December 31, 2019 were $324.1 billion. The Company also issues and confirms various types of letters of credit, including standby and commercial. Total contractual amounts of letters of credit at December 31, 2019 were $10.6 billion. For more information on the Company’s commitments to extend credit and letters of credit, refer to Note 22 in the Notes to Consolidated Financial Statements.

The Company’s off-balance sheet arrangements with unconsolidated entities primarily consist of private investment funds or partnerships that make equity investments, provide debt financing or support community-based investments in tax-advantaged projects. In addition to providing investment returns, these arrangements in many cases assist the Company in complying with requirements of the Community Reinvestment Act. The investments in these entities generate a return primarily through the realization of federal and state income tax credits and other tax benefits, such as tax deductions from operating losses of the investments, over specified time periods. The entities in which the Company invests are generally considered variable interest entities (“VIEs”). The Company’s recorded net investment in these entities as of December 31, 2019 was approximately $3.2 billion.

The Company also has non-controlling financial investments in private funds and partnerships considered VIEs. The Company’s recorded investment in these entities was approximately $31 million at December 31, 2019, and the Company had unfunded commitments to invest an additional $24 million. For more information on the Company’s interests in unconsolidated VIEs, refer to Note 7 in the Notes to Consolidated Financial Statements.

Guarantees are contingent commitments issued by the Company to customers or other third parties requiring the Company to perform if certain conditions exist or upon the occurrence or nonoccurrence of a specified event, such as a scheduled payment to be made under contract. The Company’s

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primary guarantees include commitments from securities lending activities in which indemnifications are provided to customers; indemnification or buy-back provisions related to sales of loans and tax credit investments; and merchant charge-back guarantees through the Company’s involvement in providing merchant processing services. For certain guarantees, the Company may have access to collateral to support the guarantee, or through the exercise of other recourse provisions, be able to offset some or all of any payments made under these guarantees.

The Company and certain of its subsidiaries, along with other Visa U.S.A. Inc. member banks, have a contingent guarantee obligation to indemnify Visa Inc. for potential losses arising from antitrust lawsuits challenging the practices of Visa U.S.A. Inc. and MasterCard International. The indemnification by the Company and other Visa U.S.A. Inc. member banks has no maximum amount. Refer to Note 22 in the Notes to Consolidated Financial Statements for further details regarding guarantees, other commitments, and contingent liabilities, including maximum potential future payments and current carrying amounts.

Capital Management The Company is committed to managing capital to maintain strong protection for depositors and creditors and for maximum shareholder benefit. The Company continually assesses its business risks and capital position. The Company also manages its capital to exceed regulatory capital requirements for banking organizations. To achieve its capital goals, the Company employs a variety of capital management tools, including dividends, common share repurchases, and the issuance of subordinated debt, non-cumulative perpetual preferred stock, common stock and other capital instruments.

On September 17, 2019, the Company announced its Board of Directors had approved a 13.5 percent increase in the Company’s dividend rate per common share, from $0.37 per quarter to $0.42 per quarter.

The Company repurchased approximately 81 million shares of its common stock in 2019, compared with approximately 54 million shares in 2018. The average price paid for the shares repurchased in 2019 was $55.88 per share, compared with $52.57 per share in 2018. As of December 31, 2019, the approximate dollar value of shares that may yet be purchased by the Company under the current share repurchase program approved by the Board of Directors was $2.4 billion. For a more complete analysis of activities impacting shareholders’ equity and capital management programs, refer to Note 14 of the Notes to Consolidated Financial Statements.

Total U.S. Bancorp shareholders’ equity was $51.9 billion at December 31, 2019, compared with $51.0 billion at December 31, 2018. The increase was primarily the result of corporate earnings and changes in unrealized gains and losses on available-for-sale investment securities included in other comprehensive income (loss), partially offset by common share repurchases and dividends.

The regulatory capital requirements effective for the Company follow Basel III, which includes two comprehensive methodologies for calculating risk-weighted assets: a general standardized

approach and more risk-sensitive advanced approaches. Prior to December 31, 2019, the Company’s capital adequacy was evaluated against the methodology that was most restrictive. In November 2019, the Company’s regulators issued final rules which tailor regulations to reduce certain compliance requirements for banking organizations with less risk. These rules reduced the Company’s capital and liquidity requirements and no longer subject the Company to calculating its capital adequacy as a percentage of risk-weighted assets under advanced approaches effective December 31, 2019. Under Basel III, banking regulators define minimum capital requirements for banks and financial services holding companies. These requirements are expressed in the form of a minimum common equity tier 1 capital ratio, tier 1 capital ratio, total risk-based capital ratio, tier 1 leverage ratio and a tier 1 total leverage exposure, or supplementary leverage, ratio. The Company’s minimum required level for these ratios at December 31, 2019, which include a capital conservation buffer of 2.5 percent for the common equity tier 1 capital, tier 1 capital and total capital ratios, was 7.0 percent, 8.5 percent, 10.5 percent, 4.0 percent, and 3.0 percent, respectively. The Company targets its regulatory capital levels, at both the bank and bank holding company level, to exceed the “well-capitalized” threshold for these ratios under the FDIC Improvement Act prompt corrective action provisions that are applicable to all banks. At December 31, 2019, the Company’s minimum “well-capitalized” threshold for the common equity tier 1 capital ratio, tier 1 capital ratio, total risk-based capital ratio, tier 1 leverage ratio, and tier 1 total leverage exposure ratio was 6.5 percent, 8.0 percent, 10.0 percent, 5.0 percent, and 3.0 percent, respectively. The most recent notification from the Office of the Comptroller of the Currency categorized the Company’s bank subsidiary as “well-capitalized”. There are no conditions or events since that notification that management believes have changed the risk-based category of its covered subsidiary bank.

In addition, as a result of the November 2019 rule changes, the Company received approval from the Board of Governors of the Federal Reserve System in late 2019 to increase the authorization amount of its common stock repurchase program effective through June 30, 2020, which enabled it to reduce its common equity tier 1 capital ratio from 9.6 percent at September 30, 2019 to 9.1 percent at December 31, 2019.

As an approved mortgage seller and servicer, U.S. Bank National Association, through its mortgage banking division, is required to maintain various levels of shareholder’s equity, as specified by various agencies, including the United States Department of Housing and Urban Development, Government National Mortgage Association, Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association. At December 31, 2019, U.S. Bank National Association met these requirements.

Table 23 provides a summary of statutory regulatory capital ratios in effect for the Company at December 31, 2019 and 2018. All regulatory ratios exceeded regulatory “well-capitalized” requirements.

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  TABLE 23   Regulatory Capital Ratios

At December 31 (Dollars in Millions)	2019			2018
Basel III standardized approach:
Common equity tier 1 capital	$	35,713		$	34,724
Tier 1 capital		41,721			40,741
Total risk-based capital		49,744			48,178
Risk-weighted assets		391,269			381,661
Common equity tier 1 capital as a percent of risk-weighted assets		9.1	%		9.1	%
Tier 1 capital as a percent of risk-weighted assets		10.7			10.7
Total risk-based capital as a percent of risk-weighted assets		12.7			12.6
Tier 1 capital as a percent of adjusted quarterly average assets (leverage ratio)		8.8			9.0
Basel III advanced approaches:(a)
Common equity tier 1 capital				$	34,724
Tier 1 capital					40,741
Total risk-based capital					45,136
Risk-weighted assets					295,002
Common equity tier 1 capital as a percent of risk-weighted assets					11.8	%
Tier 1 capital as a percent of risk-weighted assets					13.8
Total risk-based capital as a percent of risk-weighted assets					15.3
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure (total leverage exposure ratio)		7.0	%		7.2

(a) Effective December 31, 2019, the Company is no longer subject to calculating its capital adequacy as a percentage of risk-weighted assets under advanced approaches.    

The Company believes certain other capital ratios are useful in evaluating its capital adequacy. The Company’s tangible common equity, as a percent of tangible assets and as a percent of risk-weighted assets calculated under the standardized approach, was 7.5 percent and 9.3 percent, respectively, at December 31, 2019, compared with 7.8 percent and 9.4 percent, respectively, at December 31, 2018. Refer to “Non-GAAP Financial Measures” beginning on page 62 for further information on these other capital ratios.

Fourth Quarter Summary

The Company reported net income attributable to U.S. Bancorp of $1.5 billion for the fourth quarter of 2019, or $0.90 per diluted common share, compared with $1.9 billion, or $1.10 per diluted common share, for the fourth quarter of 2018. Return on average assets and return on average common equity were 1.21 percent and 11.8 percent, respectively, for the fourth quarter of 2019, compared with 1.59 percent and 15.8 percent, respectively, for the fourth quarter of 2018. The results for the fourth quarter of 2019 included the impact of the severance and asset impairment restructuring charges, and the increased derivative liability related to Visa shares previously sold by the Company. Combined, these items decreased fourth quarter 2019 diluted earnings per common share by $0.18.

Total net revenue for the fourth quarter of 2019, was $162 million (2.8 percent) lower than the fourth quarter of 2018, reflecting a 2.9 percent decrease in net interest income (3.0 percent on a taxable-equivalent basis) and a 2.5 percent decrease in noninterest income. The decrease in net interest income from the fourth quarter of 2018 was mainly a result of the

impact of the yield curve and changes in deposit and funding mix, partially offset by higher yields on the reinvestment of securities in addition to loan growth. The noninterest income decrease was driven by lower other noninterest income and deposit service charges, partially offset by growth in payment services revenue, trust and investment management fees and mortgage banking revenue.

Noninterest expense in the fourth quarter of 2019 was $121 million (3.7 percent) higher than the fourth quarter of 2018, primarily due to increases in personnel expense driven by stronger fee revenue production in mortgage activities, technology and communications expense in support of business growth, net occupancy and equipment expense due to capital expenditures in support of business growth, and other noninterest expense.

Fourth quarter 2019 net interest income, on a taxable-equivalent basis, was $3.2 billion, compared with $3.3 billion in the fourth quarter of 2018. The $100 million (3.0 percent) decrease was principally driven by the impact of lower interest rates and a flatter yield curve in addition to changes in deposit and funding mix, partially offset by higher yields on reinvestment of securities and loan growth. Average earning assets were $19.3 billion (4.6 percent) higher in the fourth quarter of 2019, compared with the fourth quarter of 2018, reflecting increases of $11.2 billion (3.9 percent) in average loans and $7.5 billion (6.6 percent) in average investment securities. The net interest margin, on a taxable-equivalent basis, in the fourth quarter of 2019 was 2.92 percent, compared with 3.15 percent in the fourth quarter of 2018. The decrease in net interest margin was primarily due to the impact of declining interest rates on the yield curve in addition to changes in deposit and funding mix.

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  TABLE 24   Fourth Quarter Results

	Three Months Ended December 31
(Dollars and Shares in Millions, Except Per Share Data)	2019			2018
Condensed Income Statement
Net interest income	$	3,207		$	3,303
Taxable-equivalent adjustment(a)		24			28
Net interest income (taxable-equivalent basis)(b)		3,231			3,331
Noninterest income		2,410			2,493
Securities gains (losses), net		26			5
Total net revenue		5,667			5,829
Noninterest expense		3,401			3,280
Provision for credit losses		395			368
Income before taxes		1,871			2,181
Income taxes and taxable-equivalent adjustment		378			319
Net income		1,493			1,862
Net (income) loss attributable to noncontrolling interests		(7	)		(6	)
Net income attributable to U.S. Bancorp	$	1,486		$	1,856
Net income applicable to U.S. Bancorp common shareholders	$	1,408		$	1,777
Per Common Share
Earnings per share	$	.91		$	1.10
Diluted earnings per share	$	.90		$	1.10
Dividends declared per share	$	.42		$	.37
Average common shares outstanding		1,556			1,615
Average diluted common shares outstanding		1,558			1,618
Financial Ratios
Return on average assets		1.21	%		1.59	%
Return on average common equity		11.8			15.8
Net interest margin (taxable-equivalent basis)(a)		2.92			3.15
Efficiency ratio(b)		60.3			56.3

(a) Based on a federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes.

(b) See Non-GAAP Financial Measures beginning on page 62.

Noninterest income in the fourth quarter of 2019 was $2.4 billion, representing a decrease of $62 million (2.5 percent) from the fourth quarter of 2018. The decrease reflected lower other noninterest income and deposit service charges, partially offset by growth in payment services revenue, trust and investment management fees and mortgage banking revenue. Other noninterest income decreased $172 million (55.5 percent) in the fourth quarter of 2019, compared with the same period of the prior year, reflecting the net impact in the fourth quarter of 2019 of the $140 million charge for the increased derivative liability related to Visa shares previously sold by the Company, partially offset by a gain on the sale of a loan portfolio, and the net impact in the fourth quarter of 2018 of the $340 million gain recorded from the sale of the Company’s ATM servicing business, partially offset by $264 million of asset impairment charges related to the sale of a majority of the Company’s covered loans and certain other assets. Deposit service charges decreased $22 million (8.7 percent) primarily due to the sale of the Company’s ATM servicing business in the fourth quarter of 2018. The increase in payment services revenue reflected higher merchant processing services revenue of $20 million (5.1 percent), driven by higher sales volumes and merchant fees,

partially offset by slightly lower credit and debit card revenue of $4 million (1.0 percent) and corporate payment products revenue of $5 million (3.1 percent). The decline in corporate payment products revenue was driven by lower commercial business sales volumes. Trust and investment management fees increased $29 million (7.1 percent) due to business growth and favorable market conditions, while mortgage banking revenue increased $73 million (42.7 percent) due to higher mortgage production and gain on sale margins.

Noninterest expense in the fourth quarter of 2019 was $3.4 billion, compared with $3.3 billion in the same period of 2018, representing an increase of $121 million (3.7 percent). The increase was primarily due to higher personnel expense, technology and communications expense, net occupancy and equipment expense, and other noninterest expense. Compensation expense in the fourth quarter of 2019 increased $29 million (1.8 percent) over the same period of the prior year, driven by the impact of hiring to support business growth, merit increases and higher variable compensation related to business production within mortgage banking, while employee benefits expense increased $7 million (2.3 percent) primarily due to higher medical costs. Technology and communications expense

57    

increased $37 million (14.6 percent) and net occupancy and equipment expense increased $20 million (7.5 percent), primarily to support business growth. Other noninterest expense increased $26 million (5.0 percent) primarily due to the net impacts of severance charges and other accruals of $200 million in the fourth quarter of 2019, partially offset by severance charges and accruals for legal matters of $174 million in the fourth quarter of 2018.

The provision for credit losses for the fourth quarter of 2019 was $395 million, an increase of $27 million (7.3 percent) from the same period of 2018. The provision for credit losses was $10 million higher than net charge-offs in the fourth quarter of 2019 and $15 million higher than net charge-offs in the fourth quarter of 2018. The increase in the allowance for credit losses during the fourth quarter of 2019 reflected loan portfolio growth. Net charge-offs were $385 million in the fourth quarter of 2019, compared with $353 million in the fourth quarter of 2018. The net charge-off ratio was 0.52 percent in the fourth quarter of 2019, compared with 0.49 percent in the fourth quarter of 2018.

The provision for income taxes was $354 million (an effective rate of 19.2 percent) for the fourth quarter of 2019, compared with $291 million (an effective rate of 13.5 percent) for the same period of 2018. The fourth quarter of 2018 provision for income taxes reflected the favorable impact of deferred tax assets and liabilities adjustments related to tax reform legislation enacted in late 2017.

Line of Business Financial Review

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

Basis for Financial Presentation Business line results are derived from the Company’s business unit profitability reporting systems by specifically attributing managed balance sheet assets, deposits and other liabilities and their related income or expense. Refer to Note 23 of the Notes to Consolidated Financial Statements for further information on the business lines’ basis for financial presentation.

Designations, assignments and allocations change from time to time as management systems are enhanced, methods of evaluating performance or product lines change or business segments are realigned to better respond to the Company’s diverse customer base. During 2019, certain organization and methodology changes were made and, accordingly, 2018 results were restated and presented on a comparable basis.

Corporate and Commercial Banking Corporate and Commercial Banking offers lending, equipment finance and small-ticket leasing, depository services, treasury management, capital markets services, international trade services and other financial services to middle market, large corporate, commercial real

estate, financial institution, non-profit and public sector clients. Corporate and Commercial Banking contributed $1.5 billion of the Company’s net income in 2019, or a decrease of $52 million (3.3 percent), compared with 2018.

Net revenue decreased $41 million (1.1 percent) in 2019, compared with 2018. Net interest income, on a taxable-equivalent basis, decreased $65 million (2.2 percent) in 2019, compared with 2018, primarily due to lower noninterest-bearing deposit balances from 2018 and lower rates on loans, reflecting a competitive marketplace, partially offset by the impact of higher rates on the margin benefit from deposits and loan and interest-bearing deposit growth. Noninterest-bearing deposits are declining as customers deploy balances to support business growth. Noninterest income increased $24 million (2.8 percent) in 2019, compared with 2018, primarily due to higher trading revenue and corporate bond underwriting fees, partially offset by lower loan syndications revenue.

Noninterest expense increased $16 million (1.0 percent) in 2019, compared with 2018, reflecting higher net shared services expense driven by technology development and investment in infrastructure, higher salary expense driven by merit increases, and increases in production incentives associated with higher capital markets revenue. These increases were partially offset by lower FDIC assessment costs. The provision for credit losses increased $13 million (20.0 percent) in 2019, compared with 2018, due to higher net charge-offs, partially offset by a favorable change in the reserve allocation.

Consumer and Business Banking Consumer and Business Banking delivers products and services through banking offices, telephone servicing and sales, on-line services, direct mail, ATM processing and mobile devices. It encompasses community banking, metropolitan banking and indirect lending, as well as mortgage banking. Consumer and Business Banking contributed $2.3 billion of the Company’s net income in 2019, or an increase of $38 million (1.7 percent), compared with 2018.

Net revenue increased $176 million (2.1 percent) in 2019, compared with 2018. Net interest income, on a taxable-equivalent basis, increased $105 million (1.7 percent) in 2019, compared with 2018, primarily due to the impact of higher rates on the margin benefit from deposits, as well as growth in both interest-bearing deposit balances and loan balances, partially offset by lower rates on loans. Noninterest income increased $71 million (3.1 percent) in 2019, compared with 2018, primarily due to higher mortgage banking revenue driven by higher mortgage production and gain on sale margins, partially offset by changes in MSRs valuations, net of hedging activities, as well as higher transition services agreement revenue associated with the sale of the Company’s ATM third-party servicing business during 2018, partially offset by reductions in ATM processing services revenue due to the sale.

Noninterest expense increased $46 million (0.9 percent) in 2019, compared with 2018, primarily due to higher net shared services expense and higher production incentives, partially offset by lower FDIC assessment costs and lower mortgage banking costs. The increase in net shared services expense reflected the

58    

impact of technology development and investment in infrastructure supporting business growth, as well as higher costs to manage the business, while production incentives were higher in support of business growth. The provision for credit losses increased $78 million (33.6 percent) in 2019, compared with 2018, reflecting an unfavorable change in the reserve allocation as well as higher net charge-offs.

Wealth Management and Investment Services Wealth Management and Investment Services provides private banking, financial advisory services, investment management, retail brokerage services, insurance, trust, custody and fund servicing through four businesses: Wealth Management, Global Corporate Trust & Custody, U.S. Bancorp Asset Management and Fund Services. Wealth Management and Investment Services contributed $895 million of the Company’s net income in 2019, or an increase of $81 million (10.0 percent), compared with 2018.

Net revenue increased $77 million (2.7 percent) in 2019, compared with 2018. Net interest income, on a taxable-equivalent basis, increased $26 million (2.3 percent) in 2019, compared with 2018, primarily due to the impact of higher deposit balances and the impact of higher rates on the margin benefit from deposits. Noninterest income increased $51 million (2.9 percent) in 2019, compared with 2018, principally due to favorable market conditions and business growth.

Noninterest expense decreased $29 million (1.6 percent) in 2019, compared with 2018, reflecting lower costs related to FDIC assessment and litigation settlements. These decreases were partially offset by higher compensation expense, reflecting the

impact of merit increases, increased staffing, and higher medical costs, as well as increased net shared service expense due to technology development.

Payment Services Payment Services includes consumer and business credit cards, stored-value cards, debit cards, corporate, government and purchasing card services, consumer lines of credit and merchant processing. Payment Services contributed $1.5 billion of the Company’s net income in 2019, or an increase of $25 million (1.7 percent), compared with 2018.

Net revenue increased $158 million (2.6 percent) in 2019, compared with 2018. Net interest income, on a taxable-equivalent basis, increased $50 million (2.0 percent) in 2019, compared with 2018, primarily due to growth in average loans as well as loan fees, partially offset by compression on loan rates. Noninterest income increased $108 million (3.0 percent) in 2019, compared with 2018, primarily due to higher merchant processing services revenue, corporate payment products revenue and credit and debit card revenue, all driven by higher sales volumes.

Noninterest expense increased $98 million (3.3 percent) in 2019, compared with 2018, principally due to higher net shared services expense to support business growth, technology development and investment in infrastructure, in addition to increases in personnel expense in support of business development and merit increases. The provision for credit losses increased $27 million (2.5 percent) in 2019, compared with 2018, reflecting higher net charge-offs, partially offset by a favorable change in the reserve allocation.

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  TABLE 25   Line of Business Financial Performance

	Corporate and Commercial Banking							Consumer and Business Banking
Year Ended December 31 (Dollars in Millions)	2019		2018		Percent Change			2019		2018		Percent Change
Condensed Income Statement
Net interest income (taxable-equivalent basis)	$	2,871	$	2,936		(2.2	)%	$	6,261	$	6,156		1.7	%
Noninterest income		867		843		2.8			2,387		2,316		3.1
Securities gains (losses), net		—		—		—			—		—		—
Total net revenue		3,738		3,779		(1.1	)		8,648		8,472		2.1
Noninterest expense		1,607		1,591		1.0			5,285		5,232		1.0
Other intangibles		4		4		—			20		27		(25.9	)
Total noninterest expense		1,611		1,595		1.0			5,305		5,259		.9
Income before provision and income taxes		2,127		2,184		(2.6	)		3,343		3,213		4.0
Provision for credit losses		78		65		20.0			310		232		33.6
Income before income taxes		2,049		2,119		(3.3	)		3,033		2,981		1.7
Income taxes and taxable-equivalent adjustment		513		531		(3.4	)		759		745		1.9
Net income		1,536		1,588		(3.3	)		2,274		2,236		1.7
Net (income) loss attributable to noncontrolling interests		—		—		—			—		—		—
Net income attributable to U.S. Bancorp	$	1,536	$	1,588		(3.3	)	$	2,274	$	2,236		1.7
Average Balance Sheet
Commercial	$	78,141	$	75,009		4.2	%	$	9,601	$	9,857		(2.6	)%
Commercial real estate		18,461		18,838		(2.0	)		16,107		16,303		(1.2	)
Residential mortgages		5		6		(16.7	)		63,867		58,549		9.1
Credit card		—		—		—			—		—		—
Other retail		1		1		—			55,020		53,997		1.9
Total loans, excluding covered loans		96,608		93,854		2.9			144,595		138,706		4.2
Covered loans		—		—		—			—		2,169		*
Total loans		96,608		93,854		2.9			144,595		140,875		2.6
Goodwill		1,647		1,647		—			3,475		3,604		(3.6	)
Other intangible assets		8		11		(27.3	)		2,617		2,953		(11.4	)
Assets		106,716		102,801		3.8			158,884		155,267		2.3
Noninterest-bearing deposits		29,152		32,938		(11.5	)		27,876		27,691		.7
Interest checking		11,972		10,043		19.2			51,323		50,137		2.4
Savings products		43,154		41,904		3.0			62,322		61,475		1.4
Time deposits		17,654		17,966		(1.7	)		15,644		13,322		17.4
Total deposits		101,932		102,851		(.9	)		157,165		152,625		3.0
Total U.S. Bancorp shareholders’ equity		10,399		10,463		(.6	)		11,713		11,812		(.8	)

* Not meaningful

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Wealth Management and Investment Services									Payment Services							Treasury and Corporate Support									Consolidated Company
2019			2018			Percent Change			2019		2018		Percent Change			2019			2018			Percent Change			2019			2018			Percent Change
$	1,157		$	1,131			2.3	%	$	2,493	$	2,443		2.0	%	$	373		$	369			1.1	%	$	13,155		$	13,035			.9	%
	1,799			1,748			2.9			3,707		3,599		3.0			998			1,066			(6.4	)		9,758			9,572			1.9
	—			—			—			—		—		—			73			30			*			73			30			*
	2,956			2,879			2.7			6,200		6,042		2.6			1,444			1,465			(1.4	)		22,986			22,637			1.5
	1,752			1,778			(1.5	)		2,940		2,859		2.8			1,033			843			22.5			12,617			12,303			2.6
	13			16			(18.8	)		131		114		14.9			—			—			—			168			161			4.3
	1,765			1,794			(1.6	)		3,071		2,973		3.3			1,033			843			22.5			12,785			12,464			2.6
	1,191			1,085			9.8			3,129		3,069		2.0			411			622			(33.9	)		10,201			10,173			.3
	(3	)		(2	)		(50.0	)		1,108		1,081		2.5			11			3			*			1,504			1,379			9.1
	1,194			1,087			9.8			2,021		1,988		1.7			400			619			(35.4	)		8,697			8,794			(1.1	)
	299			273			9.5			505		497		1.6			(325	)		(376	)		13.6			1,751			1,670			4.9
	895			814			10.0			1,516		1,491		1.7			725			995			(27.1	)		6,946			7,124			(2.5	)
	—			—			—			—		—		—			(32	)		(28	)		(14.3	)		(32	)		(28	)		(14.3	)
$	895		$	814			10.0		$	1,516	$	1,491		1.7		$	693		$	967			(28.3	)	$	6,914		$	7,096			(2.6	)
$	4,023		$	3,778			6.5	%	$	9,905	$	9,026		9.7	%	$	1,528		$	1,184			29.1	%	$	103,198		$	98,854			4.4	%
	509			520			(2.1	)		—		—		—			4,309			4,316			(.2	)		39,386			39,977			(1.5	)
	3,875			3,333			16.3			—		—		—			—			5			*			67,747			61,893			9.5
	—			—			—			23,309		21,672		7.6			—			—			—			23,309			21,672			7.6
	1,673			1,733			(3.5	)		352		404		(12.9	)		—			1			*			57,046			56,136			1.6
	10,080			9,364			7.6			33,566		31,102		7.9			5,837			5,506			6.0			290,686			278,532			4.4
	—			—			—			—		—		—			—			—			—			—			2,169			*
	10,080			9,364			7.6			33,566		31,102		7.9			5,837			5,506			6.0			290,686			280,701			3.6
	1,617			1,618			(.1	)		2,839		2,570		10.5			—			—			—			9,578			9,439			1.5
	49			63			(22.2	)		538		406		32.5			—			—			—			3,212			3,433			(6.4	)
	13,330			12,437			7.2			39,743		36,912		7.7			156,980			149,597			4.9			475,653			457,014			4.1
	13,195			14,006			(5.8	)		1,205		1,099		9.6			2,435			2,462			(1.1	)		73,863			78,196			(5.5	)
	9,056			9,928			(8.8	)		—		—		—			202			46			*			72,553			70,154			3.4
	49,545			42,215			17.4			113		107		5.6			845			744			13.6			155,979			146,445			6.5
	3,430			3,857			(11.1	)		2		3		(33.3	)		7,687			3,519			*			44,417			38,667			14.9
	75,226			70,006			7.5			1,320		1,209		9.2			11,169			6,771			65.0			346,812			333,462			4.0
	2,525			2,476			2.0			7,084		6,629		6.9			20,902			18,383			13.7			52,623			49,763			5.7

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Treasury and Corporate Support Treasury and Corporate Support includes the Company’s investment portfolios, funding, capital management, interest rate risk management, income taxes not allocated to the business lines, including most investments in tax-advantaged projects, and the residual aggregate of those expenses associated with corporate activities that are managed on a consolidated basis. Treasury and Corporate Support recorded net income of $693 million in 2019, compared with $967 million in 2018.

Net revenue decreased $21 million (1.4 percent) in 2019, compared with 2018. Net interest income, on a taxable-equivalent basis, increased $4 million (1.1 percent) in 2019, compared with 2018, primarily due to growth in the investment portfolio, partially offset by changes in funding mix. Noninterest income decreased $25 million (2.3 percent) in 2019, compared with 2018, primarily due to a 2019 charge for an increased derivative liability related to Visa shares previously sold by the Company, and the 2018 net impact of the gain recorded from the sale of the ATM third-party servicing business and certain asset impairment charges. These decreases were partially offset by a 2019 gain on the sale of a loan portfolio and higher income from equity investments and gains on the sale of securities.

Noninterest expense increased $190 million (22.5 percent) in 2019, compared with 2018, principally due to higher compensation expense, reflecting the impact of increased staffing and merit increases, and higher implementation costs of capital investments to support business growth. Noninterest expense further increased due to the net impact of severance charges and asset impairment accruals recorded in 2019, and severance charges and legal matter accruals recorded in 2018. These increases were partially offset by lower net shared services expense and lower costs related to tax-advantaged projects. The provision for credit losses was $8 million higher in 2019, compared with 2018, due to an unfavorable change in the reserve allocation and higher net charge-offs.

Income taxes are assessed to each line of business at a managerial tax rate of 25.0 percent with the residual tax expense or benefit to arrive at the consolidated effective tax rate included in Treasury and Corporate Support.

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, and

– Tangible common equity to risk-weighted assets.

These capital measures are viewed by management as useful additional methods of evaluating the Company’s utilization of its capital held and 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 capital measures are not defined in generally accepted accounting principles (“GAAP”), or are not defined in banking regulations. As a result, these capital measures disclosed by the Company may be considered non-GAAP financial measures. Management believes this information helps investors assess trends in the Company’s capital adequacy.

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.

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 report in their entirety, and not to rely on any single financial measure.

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The following table shows the Company’s calculation of these non-GAAP financial measures:

At December 31 (Dollars in Millions)	2019			2018			2017			2016			2015
Total equity	$	52,483		$	51,657		$	49,666		$	47,933		$	46,817
Preferred stock		(5,984	)		(5,984	)		(5,419	)		(5,501	)		(5,501	)
Noncontrolling interests		(630	)		(628	)		(626	)		(635	)		(686	)
Goodwill (net of deferred tax liability)(1)		(8,788	)		(8,549	)		(8,613	)		(8,203	)		(8,295	)
Intangible assets, other than mortgage servicing rights		(677	)		(601	)		(583	)		(712	)		(838	)
Tangible common equity(a)		36,404			35,895			34,425			32,882			31,497
Total assets		495,426			467,374			462,040			445,964			421,853
Goodwill (net of deferred tax liability)(1)		(8,788	)		(8,549	)		(8,613	)		(8,203	)		(8,295	)
Intangible assets, other than mortgage servicing rights		(677	)		(601	)		(583	)		(712	)		(838	)
Tangible assets(b)		485,961			458,224			452,844			437,049			412,720
Risk-weighted assets, determined in accordance with the Basel III standardized approach(c)		391,269			381,661			367,771			358,237			341,360
Ratios
Tangible common equity to tangible assets(a)/(b)		7.5	%		7.8	%		7.6	%		7.5	%		7.6	%
Tangible common equity to risk-weighted assets(a)/(c)		9.3			9.4			9.4			9.2			9.2

	Three Months Ended December 31						Year Ended December 31
	2019			2018			2019			2018			2017			2016			2015
Net interest income	$	3,207		$	3,303		$	13,052		$	12,919		$	12,380		$	11,666		$	11,151
Taxable-equivalent adjustment(2)		24			28			103			116			205			203			213
Net interest income, on a taxable-equivalent basis		3,231			3,331			13,155			13,035			12,585			11,869			11,364
Net interest income, on a taxable-equivalent basis (as calculated above)		3,231			3,331			13,155			13,035			12,585			11,869			11,364
Noninterest income		2,436			2,498			9,831			9,602			9,317			9,290			8,818
Less: Securities gains (losses), net		26			5			73			30			57			22			—
Total net revenue, excluding net securities gains (losses)(d)		5,641			5,824			22,913			22,607			21,845			21,137			20,182
Noninterest expense(e)		3,401			3,280			12,785			12,464			12,790			11,527			10,807
Efficiency ratio(e)/(d)		60.3	%		56.3	%		55.8	%		55.1	%		58.5	%		54.5	%		53.5	%

(1) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements.

(2) Based on federal income tax rates of 21 percent for 2019 and 2018 and 35 percent for 2017, 2016 and 2015, for those assets and liabilities whose income or expense is not included for federal income tax purposes.

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Accounting Changes

Note 2 of the Notes to Consolidated Financial Statements discusses accounting standards recently issued but not yet required to be adopted and the expected impact of these changes in accounting standards. To the extent the adoption of new accounting standards materially affects the Company’s financial condition or results of operations, the impacts are discussed in the applicable section(s) of the Management’s Discussion and Analysis and the Notes to Consolidated Financial Statements.

Critical Accounting Policies

The accounting and reporting policies of the Company comply with accounting principles generally accepted in the United States and conform to general practices within the banking industry. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. The Company’s financial position and results of operations can be affected by these estimates and assumptions, which are integral to understanding the Company’s financial statements. Critical accounting policies are those policies management believes are the most important to the portrayal of the Company’s financial condition and results, and require management to make estimates that are difficult, subjective or complex. Most accounting policies are not considered by management to be critical accounting policies. Several factors are considered in determining whether or not a policy is critical in the preparation of financial statements. These factors include, among other things, whether the estimates are significant to the financial statements, the nature of the estimates, the ability to readily validate the estimates with other information (including third-party sources or available prices), sensitivity of the estimates to changes in economic conditions and whether alternative accounting methods may be utilized under GAAP. Management has discussed the development and the selection of critical accounting policies with the Company’s Audit Committee.

Significant accounting policies are discussed in Note 1 of the Notes to Consolidated Financial Statements. Those policies considered to be critical accounting policies are described below.

Allowance for Credit Losses Management’s evaluation of the appropriate allowance for credit losses is often the most critical of all the accounting estimates for a banking institution. It is an inherently subjective process impacted by many factors as discussed throughout the Management’s Discussion and Analysis section of the Annual Report. Through December 31, 2019, the allowance for credit losses was established to provide for probable and estimable losses incurred in the Company’s credit portfolio. Effective January 1, 2020, the Company adopted new accounting guidance which changes previous impairment recognition to a model that is based on expected losses rather than incurred losses. Refer to Note 2 of the Notes to Consolidated Financial Statements for discussion on the

effect of the adoption of this guidance on the Company’s financial statements.

The methods utilized to estimate the allowance for credit losses, key assumptions and quantitative and qualitative information considered by management in determining the appropriate allowance for credit losses at December 31, 2019 are discussed in the “Credit Risk Management” section. Although methodologies utilized to determine each element of the allowance reflect management’s assessment of credit risk as identified through assessments completed of individual credits and of homogenous pools affected by material credit events, degrees of imprecision exist in these measurement tools due in part to subjective judgments involved and an inherent lag in the data available to quantify current conditions and events that affect credit loss reserve estimates. As discussed in the “Analysis and Determination of Allowance for Credit Losses” section, management considered the effect of changes in economic conditions, risk management practices, and other factors that contributed to imprecision of loss estimates in determining the allowance for credit losses. If not considered, incurred losses in the credit portfolio related to imprecision and other subjective factors could have a dramatic adverse impact on the liquidity and financial viability of a banking institution.

Given the many subjective factors affecting the credit portfolio, changes in the allowance for credit losses may not directly coincide with changes in the risk ratings of the credit portfolio reflected in the risk rating process. This is in part due to the timing of the risk rating process in relation to changes in the business cycle, the exposure and mix of loans within risk rating categories, levels of nonperforming loans and the timing of charge-offs and recoveries. The allowance for credit losses on commercial lending segment loans measures the incurred loss content on the remaining portfolio exposure, while nonperforming loans and net charge-offs are measures of specific impairment events that have already been confirmed. Therefore, the degree of change in the commercial lending allowance may differ from the level of changes in nonperforming loans and net charge-offs. Management maintains an appropriate allowance for credit losses by updating aggregate allowance rates to reflect changes in economic uncertainty or business cycle conditions.

Some factors considered in determining the appropriate allowance for credit losses are quantifiable while other factors require qualitative judgment. Management conducts an analysis with respect to the accuracy of risk ratings and the volatility of inherent losses, and utilizes this analysis along with qualitative factors that can affect the precision of credit loss estimates, including economic conditions, such as changes in unemployment or bankruptcy rates, and concentration risks, such as risks associated with specific industries, collateral valuations, and loans to highly leveraged enterprises, in determining the overall level of the allowance for credit losses. The Company’s determination of the allowance for commercial lending segment loans is sensitive to the assigned credit risk ratings and inherent loss rates at December 31, 2019. If 10 percent of period ending loan balances (including unfunded

64    

commitments) within each risk category of this segment of the loan portfolio experienced downgrades of two risk categories, the allowance for credit losses would have increased by approximately $223 million at December 31, 2019. The Company believes the allowance for credit losses appropriately considers the imprecision in estimating credit losses based on credit risk ratings and inherent loss rates but actual losses may differ from those estimates. If inherent loss or estimated loss rates for commercial lending segment loans increased by 10 percent, the allowance for credit losses would have increased by approximately $177 million at December 31, 2019. The Company’s determination of the allowance for consumer lending segment loans is sensitive to changes in estimated loss rates and estimated impairments on restructured loans. In the event that estimated losses for this segment of the loan portfolio increased by 10 percent, the allowance for credit losses would have increased by approximately $174 million at December 31, 2019. Because several quantitative and qualitative factors are considered in determining the allowance for credit losses, these sensitivity analyses do not necessarily reflect the nature and extent of future changes in the allowance for credit losses. They are intended to provide insights into the impact of adverse changes in risk rating and inherent losses and do not imply any expectation of future deterioration in the risk rating or loss rates. Given current processes employed by the Company, management believes the risk ratings and inherent loss rates currently assigned are appropriate. It is possible that others, given the same information, may at any point in time reach different reasonable conclusions that could be significant to the Company’s financial statements. Refer to the “Analysis and Determination of the Allowance for Credit Losses” section for further information.

Fair Value Estimates A portion of the Company’s assets and liabilities are carried at fair value on the Consolidated Balance Sheet, with changes in fair value recorded either through earnings or other comprehensive income (loss) in accordance with applicable accounting principles generally accepted in the United States. These include all of the Company’s available-for-sale investment securities, derivatives and other trading instruments, MSRs and MLHFS. The estimation of fair value also affects other loans held for sale, which are recorded at the lower-of-cost-or-fair value. The determination of fair value is important for certain other assets that are periodically evaluated for impairment using fair value estimates, including goodwill and other intangible assets, impaired loans, OREO and other repossessed assets.

Fair value is generally defined as the exit price at which an asset or liability could be exchanged in a current transaction between willing, unrelated parties, other than in a forced or liquidation sale. Fair value is based on quoted market prices in an active market, or if market prices are not available, is estimated using models employing techniques such as matrix pricing or discounting expected cash flows. The significant assumptions used in the models, which include assumptions for interest rates, discount rates, prepayments and credit losses, are independently

verified against observable market data where possible. Where observable market data is not available, the estimate of fair value becomes more subjective and involves a high degree of judgment. In this circumstance, fair value is estimated based on management’s judgment regarding the value that market participants would assign to the asset or liability. This valuation process takes into consideration factors such as market illiquidity. Imprecision in estimating these factors can impact the amount recorded on the balance sheet for a particular asset or liability with related impacts to earnings or other comprehensive income (loss).

When available, trading and available-for-sale securities are valued based on quoted market prices. However, certain securities are traded less actively and, therefore, quoted market prices may not be available. The determination of fair value may require benchmarking to similar instruments or performing a discounted cash flow analysis using estimates of future cash flows and prepayment, interest and default rates. For more information on investment securities, refer to Note 4 of the Notes to Consolidated Financial Statements.

As few derivative contracts are listed on an exchange, the majority of the Company’s derivative positions are valued using valuation techniques that use readily observable market inputs. Certain derivatives, however, must be valued using techniques that include unobservable inputs. For these instruments, the significant assumptions must be estimated and, therefore, are subject to judgment. Note 19 of the Notes to Consolidated Financial Statements provides a summary of the Company’s derivative positions.

Refer to Note 21 of the Notes to Consolidated Financial Statements for additional information regarding estimations of fair value.

Mortgage Servicing Rights MSRs are capitalized as separate assets when loans are sold and servicing is retained, or may be purchased from others. The Company records MSRs at fair value. Because MSRs do not trade in an active market with readily observable prices, the Company determines the fair value by estimating the present value of the asset’s future cash flows utilizing market-based prepayment rates, option adjusted spread, and other assumptions validated through comparison to trade information, industry surveys and independent third-party valuations. Changes in the fair value of MSRs are recorded in earnings during the period in which they occur. Risks inherent in the valuation of MSRs include higher than expected prepayment rates and/or delayed receipt of cash flows. The Company utilizes derivatives, including interest rate swaps, swaptions, forward commitments to buy TBAs, U.S. Treasury and Eurodollar futures and options on U.S. Treasury futures, to mitigate the valuation risk. Refer to Notes 9 and 21 of the Notes to Consolidated Financial Statements for additional information on the assumptions used in determining the fair value of MSRs and an analysis of the sensitivity to changes in interest rates of the fair value of the MSRs portfolio and the related derivative instruments used to mitigate the valuation risk.

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Income Taxes The Company estimates income tax expense based on amounts expected to be owed to the various tax jurisdictions in which it operates, including federal, state and local domestic jurisdictions, and an insignificant amount to foreign jurisdictions. The estimated income tax expense is reported in the Consolidated Statement of Income. Accrued taxes are reported in other assets or other liabilities on the Consolidated Balance Sheet and represent the net estimated amount due to or to be received from taxing jurisdictions either currently or deferred to future periods. Deferred taxes arise from differences between assets and liabilities measured for financial reporting purposes versus income tax reporting purposes. Deferred tax assets are recognized if, in management’s judgment, their realizability is determined to be more likely than not. Uncertain tax positions that meet the more likely than not recognition threshold are measured to determine the amount of benefit to recognize. An uncertain tax position is measured at the largest amount of benefit management believes is more likely than not to be realized upon settlement. In estimating accrued taxes, the Company assesses the relative merits and risks of the appropriate tax treatment considering statutory, judicial and regulatory guidance in the context of the tax position. Because of the complexity of tax laws and regulations, interpretation can be difficult and subject to legal judgment given specific facts and circumstances. It is possible that others, given the same information, may at any point in time reach different reasonable conclusions regarding the estimated amounts of accrued taxes.

Changes in the estimate of accrued taxes occur periodically due to changes in tax rates, interpretations of tax laws, the status of examinations being conducted by various taxing authorities,

and newly enacted statutory, judicial and regulatory guidance that impacts the relative merits and risks of tax positions. These changes, when they occur, affect accrued taxes and can be significant to the operating results of the Company. Refer to Note 18 of the Notes to Consolidated Financial Statements for additional information regarding income taxes.

Controls and Procedures

Under the supervision and with the participation of the Company’s management, including its principal executive officer and principal financial officer, the Company has evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based upon this evaluation, the principal executive officer and principal financial officer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective.

During the most recently completed fiscal quarter, there was no change made in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

The annual report of the Company’s management on internal control over financial reporting is provided on page 67. The audit report of Ernst & Young LLP, the Company’s independent accountants, regarding the Company’s internal control over financial reporting is provided on page 70.

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Report of Management

Responsibility for the financial statements and other information presented throughout this Annual Report rests with the management of U.S. Bancorp. The Company believes the consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States and present the substance of transactions based on the circumstances and management’s best estimates and judgment.

In meeting its responsibilities for the reliability of the financial statements, management is responsible for establishing and maintaining an adequate system of internal control over financial reporting as defined by Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Company’s system of internal control is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of publicly filed financial statements in accordance with accounting principles generally accepted in the United States.

To test compliance, the Company carries out an extensive audit program. This program includes a review for compliance with written policies and procedures and a comprehensive review of the adequacy and effectiveness of the system of internal control. Although control procedures are designed and tested, it must be recognized that there are limits inherent in all systems of internal control and, therefore, errors and irregularities may nevertheless occur. Also, estimates and judgments are required to assess and balance the relative cost and expected benefits of the controls. Projection of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Board of Directors of the Company has an Audit Committee composed of directors who are independent of U.S. Bancorp. The Audit Committee meets periodically with management, the internal auditors and the independent accountants to consider audit results and to discuss internal accounting control, auditing and financial reporting matters.

Management assessed the effectiveness of the Company’s system of internal control over financial reporting as of December 31, 2019. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in its Internal Control-Integrated Framework (2013 framework). Based on our assessment and those criteria, management believes the Company designed and maintained effective internal control over financial reporting as of December 31, 2019.

The Company’s independent registered accountants, Ernst & Young LLP, have been engaged to render an independent professional opinion on the financial statements and issue an attestation report on the Company’s internal control over financial reporting. Their opinion on the financial statements appearing on pages 68 and 69 and their attestation on internal control over financial reporting appearing on page 70 are based on procedures conducted in accordance with auditing standards of the Public Company Accounting Oversight Board (United States).

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Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of U.S. Bancorp

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of U.S. Bancorp (the Company) as of December 31, 2019 and 2018, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2019, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 20, 2020 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Credit Losses

Description of the Matter

The Company’s loan and lease portfolio totaled $296.1 billion as of December 31, 2019 and the associated allowance for credit losses (ACL), comprised of allowance for loan losses and a liability for unfunded credit commitments, was $4.5 billion. As discussed in Notes 1 and 5 to the consolidated financial statements, the ACL is established for probable and estimable losses incurred in the Company’s loan and lease portfolio by primarily using migration analysis for commercial loans and unfunded credit commitments and historical losses for consumer loans (the quantitative models), adjusted for qualitative factors. Auditing management’s estimate of the ACL involved a high degree of subjectivity in evaluating the completeness of the qualitative factors that management identifies and assesses, including, but not limited to, economic conditions; concentration risks; credit quality trends; business conditions and the regulatory environment, as well as the measurement of each qualitative factor.

How We Addressed the Matter in Our Audit

Our audit procedures related to the qualitative component of the ACL included the following procedures, among others. We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s process for establishing the ACL, including controls over the ACL methodology and governance process. We tested management’s validation of incurred loss models to determine whether the risks inherent in the Company’s loan and lease portfolio are captured. We assessed and tested the review and approval processes management has in place for adjustments applied to the quantitative models to reflect management’s consideration of qualitative factors.

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With respect to the completeness of qualitative factors identified and incorporated into measuring the ACL, we evaluated the potential impact of imprecision in the quantitative models (and hence the need to consider a qualitative adjustment to the reserve); changes and adjustments to the models; sufficiency, availability and relevance of historical loss data used in the models; and assumptions and risk factors used in the models.

Regarding measurement of the qualitative factors, we evaluated and tested external market data as well as internal data used in the Company’s calculation by agreeing significant inputs and underlying data used in the determination of the qualitative adjustments to internal and external sources. We searched for and evaluated information that corroborates or contradicts the Company’s identification and measurement of qualitative factors as of the consolidated balance sheet date.

We evaluated the overall ACL amount, including adjustments for qualitative factors, and whether the amount appropriately reflects losses incurred in the loan and lease portfolio as of the consolidated balance sheet date. We reviewed subsequent events and transactions and considered whether they corroborate or contradict the Company’s measurement of the ACL as of the consolidated balance sheet date.

We have served as the Company’s auditor since 2003.

Minneapolis, Minnesota

February 20, 2020

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Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of U.S. Bancorp

Opinion on Internal Control over Financial Reporting

We have audited U.S. Bancorp’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, U.S. Bancorp (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2019 and 2018, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2019, and the related notes of the Company and our report dated February 20, 2020 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Minneapolis, Minnesota

February 20, 2020

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Consolidated Financial Statements and Notes Table of Contents

Consolidated Financial Statements
Consolidated Balance Sheet	72
Consolidated Statement of Income	73
Consolidated Statement of Comprehensive Income	74
Consolidated Statement of Shareholders’ Equity	75
Consolidated Statement of Cash Flows	76
Notes to Consolidated Financial Statements
Note 1 — Significant Accounting Policies	77
Note 2 — Accounting Changes	84
Note 3 — Restrictions on Cash and Due From Banks	84
Note 4 — Investment Securities	85
Note 5 — Loans and Allowance for Credit Losses	88
Note 6 — Leases	95
Note 7 — Accounting for Transfers and Servicing of Financial Assets and Variable Interest Entities	96
Note 8 — Premises and Equipment	97
Note 9 — Mortgage Servicing Rights	98
Note 10 — Intangible Assets	99
Note 11 — Deposits	100
Note 12 — Short-Term Borrowings	101
Note 13 — Long-Term Debt	102
Note 14 — Shareholders’ Equity	103
Note 15 — Earnings Per Share	108
Note 16 — Employee Benefits	109
Note 17 — Stock-Based Compensation	114
Note 18 — Income Taxes	116
Note 19 — Derivative Instruments	118
Note 20 — Netting Arrangements for Certain Financial Instruments and Securities Financing Activities	123
Note 21 — Fair Values of Assets and Liabilities	125
Note 22 — Guarantees and Contingent Liabilities	131
Note 23 — Business Segments	136
Note 24 — U.S. Bancorp (Parent Company)	138
Note 25 — Subsequent Events	139

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U.S. Bancorp    

Consolidated Balance Sheet    

At December 31 (Dollars in Millions)	2019			2018
Assets
Cash and due from banks	$	22,405		$	21,453
Investment securities
Held-to-maturity (2018 fair value $44,964)		–			46,050
Available-for-sale ($269 and $2,057 pledged as collateral, respectively)(a)		122,613			66,115
Loans held for sale (including $5,533 and $2,035 of mortgage loans carried at fair value, respectively)		5,578			2,056
Loans
Commercial		103,863			102,444
Commercial real estate		39,746			39,539
Residential mortgages		70,586			65,034
Credit card		24,789			23,363
Other retail		57,118			56,430
Total loans		296,102			286,810
Less allowance for loan losses		(4,020	)		(3,973	)
Net loans		292,082			282,837
Premises and equipment		3,702			2,457
Goodwill		9,655			9,369
Other intangible assets		3,223			3,392
Other assets (including $951 and $843 of trading securities at fair value pledged as collateral, respectively)(a)		36,168			33,645
Total assets	$	495,426		$	467,374
Liabilities and Shareholders’ Equity
Deposits
Noninterest-bearing	$	75,590		$	81,811
Interest-bearing(b)		286,326			263,664
Total deposits		361,916			345,475
Short-term borrowings		23,723			14,139
Long-term debt		40,167			41,340
Other liabilities		17,137			14,763
Total liabilities		442,943			415,717
Shareholders’ equity
Preferred stock		5,984			5,984
Common stock, par value $0.01 a share — authorized: 4,000,000,000 shares; issued: 2019 and 2018 — 2,125,725,742 shares		21			21
Capital surplus		8,475			8,469
Retained earnings		63,186			59,065
Less cost of common stock in treasury: 2019 — 591,570,506 shares; 2018 — 517,391,021 shares		(24,440	)		(20,188	)
Accumulated other comprehensive income (loss)		(1,373	)		(2,322	)
Total U.S. Bancorp shareholders’ equity		51,853			51,029
Noncontrolling interests		630			628
Total equity		52,483			51,657
Total liabilities and equity	$	495,426		$	467,374

(a) Includes only collateral pledged by the Company where counterparties have the right to sell or pledge the collateral.    

(b) lncludes time deposits greater than $250,000 balances of $7.8 billion and $15.3 billion at December 31, 2019 and 2018, respectively.    

See Notes to Consolidated Financial Statements.    

72 

U.S. Bancorp

Consolidated Statement of Income

Year Ended December 31 (Dollars and Shares in Millions, Except Per Share Data)	2019			2018			2017
Interest Income
Loans	$	14,099		$	13,120		$	11,788
Loans held for sale		162			165			144
Investment securities		2,893			2,616			2,232
Other interest income		340			272			182
Total interest income		17,494			16,173			14,346
Interest Expense
Deposits		2,855			1,869			1,041
Short-term borrowings		360			378			141
Long-term debt		1,227			1,007			784
Total interest expense		4,442			3,254			1,966
Net interest income		13,052			12,919			12,380
Provision for credit losses		1,504			1,379			1,390
Net interest income after provision for credit losses		11,548			11,540			10,990
Noninterest Income
Credit and debit card revenue		1,413			1,401			1,289
Corporate payment products revenue		664			644			575
Merchant processing services		1,601			1,531			1,486
Trust and investment management fees		1,673			1,619			1,522
Deposit service charges		909			1,070			1,035
Treasury management fees		578			594			618
Commercial products revenue		934			895			954
Mortgage banking revenue		874			720			834
Investment products fees		186			188			173
Realized securities gains (losses), net		73			30			57
Other		926			910			774
Total noninterest income		9,831			9,602			9,317
Noninterest Expense
Compensation		6,325			6,162			5,746
Employee benefits		1,286			1,231			1,134
Net occupancy and equipment		1,123			1,063			1,019
Professional services		454			407			419
Marketing and business development		426			429			542
Technology and communications		1,095			978			903
Postage, printing and supplies		290			324			323
Other intangibles		168			161			175
Other		1,618			1,709			2,529
Total noninterest expense		12,785			12,464			12,790
Income before income taxes		8,594			8,678			7,517
Applicable income taxes		1,648			1,554			1,264
Net income		6,946			7,124			6,253
Net (income) loss attributable to noncontrolling interests		(32	)		(28	)		(35	)
Net income attributable to U.S. Bancorp	$	6,914		$	7,096		$	6,218
Net income applicable to U.S. Bancorp common shareholders	$	6,583		$	6,784		$	5,913
Earnings per common share	$	4.16		$	4.15		$	3.53
Diluted earnings per common share	$	4.16		$	4.14		$	3.51
Average common shares outstanding		1,581			1,634			1,677
Average diluted common shares outstanding		1,583			1,638			1,683

See Notes to Consolidated Financial Statements.

73    

U.S. Bancorp

Consolidated Statement of Comprehensive Income

Year Ended December 31 (Dollars in Millions)	2019			2018			2017
Net income	$	6,946		$	7,124		$	6,253
Other Comprehensive Income (Loss)
Changes in unrealized gains and losses on investment securities available-for-sale		1,693			(656	)		178
Unrealized gains and losses on held-to-maturity investment securities transferred to available-for-sale		141			–			–
Changes in unrealized gains and losses on derivative hedges		(229	)		39			(5	)
Foreign currency translation		26			3			(2	)
Changes in unrealized gains and losses on retirement plans		(380	)		(302	)		(41	)
Reclassification to earnings of realized gains and losses		20			93			77
Income taxes related to other comprehensive income (loss)		(322	)		205			(76	)
Total other comprehensive income (loss)		949			(618	)		131
Comprehensive income		7,895			6,506			6,384
Comprehensive (income) loss attributable to noncontrolling interests		(32	)		(28	)		(35	)
Comprehensive income attributable to U.S. Bancorp	$	7,863		$	6,478		$	6,349

See Notes to Consolidated Financial Statements.    

74    

U.S. Bancorp    

Consolidated Statement of Shareholders’ Equity

	U.S. Bancorp Shareholders
(Dollars and Shares in Millions, Except Per Share Data)	Common Shares Outstanding			Preferred Stock			Common Stock		Capital Surplus			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total U.S. Bancorp Shareholders’ Equity			Noncontrolling Interests			Total Equity
Balance December 31, 2016		1,697		$	5,501		$	21	$	8,440		$	50,151		$	(15,280	)	$	(1,535	)	$	47,298		$	635		$	47,933
Net income (loss)													6,218									6,218			35			6,253
Other comprehensive income (loss)																			131			131						131
Preferred stock dividends(a)													(267	)								(267	)					(267	)
Common stock dividends ($1.16 per share)													(1,950	)								(1,950	)					(1,950	)
Issuance of preferred stock					993																	993						993
Redemption of preferred stock					(1,075	)							(10	)								(1,085	)					(1,085	)
Issuance of common and treasury stock		8								(138	)					300						162						162
Purchase of treasury stock		(49	)													(2,622	)					(2,622	)					(2,622	)
Distributions to noncontrolling interests																						–			(47	)		(47	)
Net other changes in noncontrolling interests																						–			3			3
Stock option and restricted stock grants										162												162						162
Balance December 31, 2017		1,656		$	5,419		$	21	$	8,464		$	54,142		$	(17,602	)	$	(1,404	)	$	49,040		$	626		$	49,666
Changes in accounting principle(b)													299						(300	)		(1	)					(1	)
Net income (loss)													7,096									7,096			28			7,124
Other comprehensive income (loss)																			(618	)		(618	)					(618	)
Preferred stock dividends(c)													(282	)								(282	)					(282	)
Common stock dividends ($1.34 per share)													(2,190	)								(2,190	)					(2,190	)
Issuance of preferred stock					565																	565						565
Issuance of common and treasury stock		6								(167	)					258						91						91
Purchase of treasury stock		(54	)													(2,844	)					(2,844	)					(2,844	)
Distributions to noncontrolling interests																						–			(31	)		(31	)
Net other changes in noncontrolling interests																						–			5			5
Stock option and restricted stock grants										172												172						172
Balance December 31, 2018		1,608		$	5,984		$	21	$	8,469		$	59,065		$	(20,188	)	$	(2,322	)	$	51,029		$	628		$	51,657
Changes in accounting principle													2									2						2
Net income (loss)													6,914									6,914			32			6,946
Other comprehensive income (loss)																			949			949						949
Preferred stock dividends(d)													(302	)								(302	)					(302	)
Common stock dividends ($1.58 per share)													(2,493	)								(2,493	)					(2,493	)
Issuance of common and treasury stock		7								(174	)					263						89						89
Purchase of treasury stock		(81	)													(4,515	)					(4,515	)					(4,515	)
Distributions to noncontrolling interests																						–			(31	)		(31	)
Net other changes in noncontrolling interests																						–			1			1
Stock option and restricted stock grants										180												180						180
Balance December 31, 2019		1,534		$	5,984		$	21	$	8,475		$	63,186		$	(24,440	)	$	(1,373	)	$	51,853		$	630		$	52,483

(a) Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series G, Series H, Series I and Series J Non-Cumulative Perpetual Preferred Stock of $3,548.61, $887.15, $1,625.00, $375.00, $1,287.52, $1,281.25 and $890.69, respectively.

(b) Reflects the adoption of new accounting guidance on January 1, 2018 to reclassify the impact of the reduced federal statutory tax rate for corporations included in 2017 tax reform legislation from accumulated other comprehensive income to retained earnings.

(c) Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series H, Series I, Series J and Series K Non-Cumulative Perpetual Preferred Stock of $3,548.61, $887.15, $1,625.00, $1,287.52, $1,281.25, $1,325.00 and $576.74, respectively.                 

(d) Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series H, Series I, Series J and Series K Non-Cumulative Perpetual Preferred Stock of $3,654.95, $887.15, $1,625.00, $1,287.52, $1,281.25, $1,325.00 and $1,375.00, respectively.

See Notes to Consolidated Financial Statements.

75    

U.S. Bancorp    

Consolidated Statement of Cash Flows

Year Ended December 31 (Dollars in Millions)	2019			2018			2017
Operating Activities
Net income attributable to U.S. Bancorp	$	6,914		$	7,096		$	6,218
Adjustments to reconcile net income to net cash provided by operating activities
Provision for credit losses		1,504			1,379			1,390
Depreciation and amortization of premises and equipment		334			306			293
Amortization of intangibles		168			161			175
(Gain) loss on sale of loans held for sale		(762	)		(394	)		(772	)
(Gain) loss on sale of securities and other assets		(469	)		(510	)		(502	)
Loans originated for sale in the secondary market, net of repayments		(36,561	)		(29,214	)		(35,743	)
Proceeds from sales of loans held for sale		33,303			30,730			37,462
Other, net		458			1,010			(2,049	)
Net cash provided by operating activities		4,889			10,564			6,472
Investing Activities
Proceeds from sales of available-for-sale investment securities		11,252			1,400			3,084
Proceeds from maturities of held-to-maturity investment securities		9,137			6,619			8,306
Proceeds from maturities of available-for-sale investment securities		11,454			11,411			13,042
Purchases of held-to-maturity investment securities		(6,701	)		(9,793	)		(9,712	)
Purchases of available-for-sale investment securities		(33,814	)		(10,077	)		(17,860	)
Net increase in loans outstanding		(9,871	)		(9,234	)		(8,054	)
Proceeds from sales of loans		2,899			4,862			2,458
Purchases of loans		(3,805	)		(3,694	)		(3,040	)
Net increase (decrease) in securities purchased under agreements to resell		(816	)		(182	)		54
Other, net		(1,295	)		(289	)		(404	)
Net cash used in investing activities		(21,560	)		(8,977	)		(12,126	)
Financing Activities
Net increase (decrease) in deposits		16,441			(1,740	)		12,625
Net increase (decrease) in short-term borrowings		9,584			(2,512	)		2,688
Proceeds from issuance of long-term debt		9,899			12,078			9,434
Principal payments or redemption of long-term debt		(11,119	)		(2,928	)		(10,517	)
Proceeds from issuance of preferred stock		–			565			993
Proceeds from issuance of common stock		88			86			159
Repurchase of preferred stock		–			–			(1,085	)
Repurchase of common stock		(4,525	)		(2,822	)		(2,631	)
Cash dividends paid on preferred stock		(302	)		(274	)		(284	)
Cash dividends paid on common stock		(2,443	)		(2,092	)		(1,928	)
Net cash provided by financing activities		17,623			361			9,454
Change in cash and due from banks		952			1,948			3,800
Cash and due from banks at beginning of period		21,453			19,505			15,705
Cash and due from banks at end of period	$	22,405		$	21,453		$	19,505
Supplemental Cash Flow Disclosures
Cash paid for income taxes	$	941		$	365		$	555
Cash paid for interest		4,404			3,056			2,086
Noncash transfer of held-to-maturity investment securities to available-for-sale		43,596			–			–
Net noncash transfers to foreclosed property		60			115			163

See Notes to Consolidated Financial Statements.

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Notes to Consolidated Financial Statements  

  NOTE 1   Significant Accounting Policies

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

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

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

Securities

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

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

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

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

Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase Securities purchased under agreements to resell and securities sold under agreements to repurchase are accounted for as collateralized financing transactions with a receivable or payable recorded at the amounts at which the securities were acquired or sold, plus accrued interest. Collateral requirements are continually monitored and additional collateral is received or provided as required. The Company records a receivable or payable for cash collateral paid or received.

Equity Investments  

Equity investments in entities where the Company has a significant influence (generally between 20 percent and 50 percent ownership), but does not control the entity, are accounted for using the equity method. Investments in limited partnerships and similarly structured limited liability companies where the Company’s ownership interest is greater than 5 percent are accounted for using the equity method. Equity investments not using the equity method are accounted for at fair value with changes in fair value and realized gains or losses reported in noninterest income, unless fair value is not readily determinable, in which case the investment is carried at cost subject to adjustments for any observable market transactions on the same or similar instruments of the investee. Most of the Company’s equity investments do not have readily determinable fair values. All equity investments are evaluated for impairment at least annually and more frequently if certain criteria are met.

Loans

The Company offers a broad array of lending products and categorizes its loan portfolio into two segments, which is the level at which it develops and documents a systematic methodology to determine the allowance for credit losses. The Company’s two loan portfolio segments are commercial lending and consumer lending. Previously, the Company categorized loans covered under loss sharing or similar credit protection agreements with the Federal Deposit Insurance Corporation (“FDIC”), along with the related indemnification asset, in a separate covered loans segment. During 2018 the majority of these loans were sold and the loss share coverage expired. Any remaining balances were reclassified to the loan segment they would have otherwise been included in had the loss share coverage not been in place. The Company further disaggregates its loan portfolio segments into various classes based on their underlying risk characteristics. The two classes within the commercial lending segment are commercial loans and commercial real estate loans. The three classes within the consumer lending segment are residential mortgages, credit card loans and other retail loans.

The Company’s accounting methods for loans differ depending on whether the loans are originated or purchased, and

77    

for purchased loans, whether the loans were acquired at a discount related to evidence of credit deterioration since date of origination.

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

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

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

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

Commitments to Extend Credit Unfunded commitments for residential mortgage loans intended to be held for sale are considered derivatives and recorded in other assets and other liabilities on the Consolidated Balance Sheet at fair value with

changes in fair value recorded in noninterest income. All other unfunded loan commitments are not considered derivatives and are not reported on the Consolidated Balance Sheet. For loans purchased after January 1, 2009, the fair value of the unfunded credit commitments is generally considered in the determination of the fair value of the loans recorded at the date of acquisition. Reserves for credit exposure on all other unfunded credit commitments are recorded in other liabilities.

Allowance for Credit Losses The allowance for credit losses is established for probable and estimable losses incurred in the Company’s loan and lease portfolio, including unfunded credit commitments. The allowance for credit losses is increased through provisions charged to earnings and reduced by net charge-offs. Management evaluates the appropriateness of the allowance for incurred losses on a quarterly basis.

The allowance recorded for loans in the commercial lending segment is based on reviews of individual credit relationships and considers the migration analysis of commercial lending segment loans and actual loss experience. For each loan type, this historical loss experience is adjusted as necessary to consider any relevant changes in portfolio composition, lending policies, underwriting standards, risk management practices or economic conditions. The results of the analysis are evaluated quarterly to confirm the selected loss experience is appropriate for each commercial loan type. The allowance recorded for impaired loans greater than $5 million in the commercial lending segment is based on an individual loan analysis utilizing expected cash flows discounted using the original effective interest rate, the observable market price of the loan, or the fair value of the collateral, less selling costs, for collateral-dependent loans, rather than the migration analysis. The allowance recorded for all other commercial lending segment loans is determined on a homogenous pool basis and includes consideration of product mix, risk characteristics of the portfolio, delinquency status, bankruptcy experience, portfolio growth and historical losses, adjusted for current trends. The Company also considers the impacts of any loan modifications made to commercial lending segment loans and any subsequent payment defaults to its expectations of cash flows, principal balance, and current expectations about the borrower’s ability to pay in determining the allowance for credit losses.

The allowance recorded for Troubled Debt Restructuring (“TDR”) loans and purchased impaired loans in the consumer lending segment is determined on a homogenous pool basis utilizing expected cash flows discounted using the original effective interest rate of the pool, or the prior quarter effective rate, respectively. The allowance for collateral-dependent loans in the consumer lending segment is determined based on the fair value of the collateral less costs to sell. The allowance recorded for all other consumer lending segment loans is determined on a homogenous pool basis and includes consideration of product mix, risk characteristics of the portfolio, bankruptcy experience, delinquency status, refreshed loan-to-value ratios when possible, portfolio growth and historical losses, adjusted for current trends. The Company also considers any modifications made to

78    

consumer lending segment loans including the impacts of any subsequent payment defaults since modification in determining the allowance for credit losses, such as the borrower’s ability to pay under the restructured terms, and the timing and amount of payments.

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

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

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

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

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

is placed on nonaccrual status, unpaid accrued interest is reversed, reducing interest income in the current period.

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

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

For all loan classes, interest payments received on nonaccrual loans are generally recorded as a reduction to a loan’s carrying amount while a loan is on nonaccrual and are recognized as interest income upon payoff of the loan. However, interest income may be recognized for interest payments if the remaining carrying amount of the loan is believed to be collectible. In certain circumstances, loans in any class may be restored to accrual status, such as when a loan has demonstrated sustained repayment performance or no amounts are past due and prospects for future payment are no longer in doubt; or when the loan becomes well secured and is in the process of collection. Loans where there has been a partial charge-off may be returned to accrual status if all principal and interest (including amounts previously charged-off) is expected to be collected and the loan is current. Generally, purchased impaired loans are considered accruing loans. However, the timing and amount of future cash flows for some loans is not reasonably estimable, and those loans are classified as nonaccrual loans with interest income not 

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recognized until the timing and amount of the future cash flows can be reasonably estimated.

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

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

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

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

Modifications for the consumer lending segment are generally part of programs the Company has initiated. The Company modifies residential mortgage loans under Federal Housing Administration, United States Department of Veterans Affairs, or its own internal programs. Under these programs, the Company 

offers qualifying homeowners the opportunity to permanently modify their loan and achieve more affordable monthly payments by providing loan concessions. These concessions may include adjustments to interest rates, conversion of adjustable rates to fixed rates, extension of maturity dates or deferrals of payments, capitalization of accrued interest and/or outstanding advances, or in limited situations, partial forgiveness of loan principal. In most instances, participation in residential mortgage loan restructuring programs requires the customer to complete a short-term trial period. A permanent loan modification is contingent on the customer successfully completing the trial period arrangement, and the loan documents are not modified until that time. The Company reports loans in a trial period arrangement as TDRs and continues to report them as TDRs after the trial period.

Credit card and other retail loan TDRs are generally part of distinct restructuring programs providing customers experiencing financial difficulty with modifications whereby balances may be amortized up to 60 months, and generally include waiver of fees and reduced interest rates.

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

Acquired loans restructured after acquisition are not considered TDRs for accounting and disclosure purposes if the loans evidenced credit deterioration as of the acquisition date and are accounted for in pools.

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

Factors used by the Company in determining whether all principal and interest payments due on commercial and commercial real estate loans will be collected and, therefore, whether those loans are impaired include, but are not limited to, the financial condition of the borrower, collateral and/or guarantees on the loan, and the borrower’s estimated future ability to pay based on industry, geographic location and certain financial ratios. The evaluation of impairment on residential mortgages, credit card loans and other retail loans is primarily driven by delinquency status of individual loans or whether a loan has been modified, and considers any government guarantee where applicable.

Leases The Company, as a lessor, originates retail and commercial leases either directly to the consumer or indirectly through dealer networks. Retail leases, primarily automobiles,

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have 3 to 5 year terms. Commercial leases may include high dollar assets such as aircraft or lower cost items such as office equipment. At lease inception, retail lease customers are provided with an end-of-term purchase option, which is based on the expected fair value of the automobile at the expiration of the lease. Automobile leases do not typically contain options to extend or terminate the lease. Equipment leases may contain various types of purchase options. Some option amounts are a stated value, while others are determined using the fair market value at the time of option exercise.

Residual values on leased assets are reviewed regularly for impairment. Residual valuations for retail leases are based on independent assessments of expected used automobile sale prices at the end of the lease term. Impairment tests are conducted based on these valuations considering the probability of the lessee returning the asset to the Company, re-marketing efforts, insurance coverage and ancillary fees and costs. Valuations for commercial leases are based upon external or internal management appraisals. The Company manages its risk to changes in the residual value of leased vehicles, office and business equipment, and other assets through disciplined residual valuation setting at the inception of a lease, diversification of its leased assets, regular residual asset valuation reviews and monitoring of residual value gains or losses upon the disposition of assets. Retail lease residual value risk is mitigated further by the purchase of residual value insurance coverage and effective end-of-term marketing of off-lease vehicles.

The Company, as lessee, leases certain assets for use in its operations. Leased assets primarily include retail branches, operations centers and other corporate locations, and, to a lesser extent, office and computer equipment. For each lease with an original term greater than 12 months, the Company records a lease liability and a corresponding right of use (“ROU”) asset. The Company accounts for the lease and non-lease components in the majority of its lease contracts as a single lease component, with the determination of the lease liability at lease inception based on the present value of the consideration to be paid under the contract. The discount rate used by the Company is determined at commencement of the lease using a secured rate for a similar term as the period of the lease. The Company’s leases do not include significant variable lease payments.

Certain of the Company’s real estate leases include options to extend. Lease extension options are generally exercisable at market rates. Such option periods do not provide a significant incentive, and their exercise is not reasonably certain. Accordingly, the Company does not recognize payments occurring during option periods in the calculation of its ROU assets and lease liabilities.

Other Real Estate Other real estate owned (“OREO”) is included in other assets, and is property acquired through foreclosure or other proceedings on defaulted loans. OREO is initially recorded at fair value, less estimated selling costs. The fair value of OREO is evaluated regularly and any decreases in value along with holding costs, such as taxes and insurance, are reported in noninterest expense.

Loans Held For Sale

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

Where an election is made to carry the LHFS at fair value, any change in fair value is recognized in noninterest income. Where an election is made to carry LHFS at lower-of-cost-or-fair value, any further decreases are recognized in noninterest income and increases in fair value above the loan cost basis are not recognized until the loans are sold. Fair value elections are made at the time of origination or purchase based on the Company’s fair value election policy. The Company has elected fair value accounting for substantially all its mortgage loans held for sale (“MLHFS”).

Derivative Financial Instruments

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

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

If a derivative designated as a cash flow hedge is terminated or ceases to be highly effective, the gain or loss in other comprehensive income (loss) is amortized to earnings over the period the forecasted hedged transactions impact earnings. If a hedged forecasted transaction is no longer probable, hedge accounting is ceased and any gain or loss included in other

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comprehensive income (loss) is reported in earnings immediately, unless the forecasted transaction is at least reasonably possible of occurring, whereby the amounts remain within other comprehensive income (loss).

Revenue Recognition

In the ordinary course of business, the Company recognizes income derived from various revenue generating activities. Certain revenues are generated from contracts where they are recognized when, or as services or products are transferred to customers for amounts the Company expects to be entitled. Revenue generating activities related to financial assets and liabilities are also recognized; including mortgage servicing fees, loan commitment fees, foreign currency remeasurements, and gains and losses on securities, equity investments and unconsolidated subsidiaries. Certain specific policies include the following:

Credit and Debit Card Revenue Credit and debit card revenue includes interchange from credit and debit cards processed through card association networks, annual fees, and other transaction and account management fees. Interchange rates are generally set by the credit card associations and based on purchase volumes and other factors. The Company records interchange as services are provided. Transaction and account management fees are recognized as services are provided, except for annual fees which are recognized over the applicable period. Costs for rewards programs and certain payments to partners and credit card associations are also recorded within credit and debit card revenue when services are provided. The Company predominately records credit and debit card revenue within the Payment Services line of business.

Corporate Payment Products Revenue Corporate payment products revenue primarily includes interchange from commercial card products processed through card association networks and revenue from proprietary network transactions. The Company records corporate payment products revenue as services are provided. Certain payments to credit card associations and customers are also recorded within corporate payment products revenue as services are provided. Corporate payment products revenue is recorded within the Payment Services line of business.

Merchant Processing Services Merchant processing services revenue consists principally of merchant discount and other transaction and account management fees charged to merchants for the electronic processing of card association network transactions, less interchange paid to the card-issuing bank, card association assessments, and revenue sharing amounts. All of these are recognized at the time the merchant’s services are performed. The Company may enter into revenue sharing agreements with referral partners or in connection with purchases of merchant contracts from sellers. The revenue sharing amounts are determined primarily on sales volume processed or revenue generated for a particular group of merchants. Merchant

processing revenue also includes revenues related to point-of-sale equipment recorded as sales when the equipment is shipped or as earned for equipment rentals. The Company records merchant processing services revenue within the Payment Services line of business.

Trust and Investment Management Fees Trust and investment management fees are recognized over the period in which services are performed and are based on a percentage of the fair value of the assets under management or administration, fixed based on account type, or transaction-based fees. Services provided to clients include trustee, transfer agent, custodian, fiscal agent, escrow, fund accounting and administration services. Services provided to mutual funds may include selling, distribution and marketing services. Trust and investment management fees are predominately recorded within the Wealth Management and Investment Services line of business.

Deposit Service Charges Deposit service charges include service charges on deposit accounts received under depository agreements with customers to provide access to deposited funds, serve as a custodian of funds, and when applicable, pay interest on deposits. Checking or savings accounts may contain fees for various services used on a day to day basis by a customer. Fees are recognized as services are delivered to and consumed by the customer, or as penalty fees are charged. Deposit service charges also include revenue generated from ATM transaction processing and settlement services which is recognized at the time the services are performed. Certain payments to partners and card associations related to ATM processing services are also recorded within deposit service charges as services are provided. Deposit service charges are reported primarily within the Consumer and Business Banking line of business.

Treasury Management Fees Treasury management fees include fees for a broad range of products and services that enables customers to manage their cash more efficiently. These products and services include cash and investment management, receivables management, disbursement services, funds transfer services, and information reporting. Revenue is recognized as products and services are provided to customers. The Company reflects a discount calculated on monthly average collected customer balances. Total treasury management fees are reported primarily within the Corporate and Commercial Banking and Consumer and Business Banking lines of business.

Commercial Products Revenue Commercial products revenue primarily includes revenue related to ancillary services provided to Corporate and Commercial Banking and Consumer and Business Banking customers, including standby letter of credit fees, non-yield related loan fees, capital markets related revenue, sales of direct financing leases, and loan and syndication fees. Sales of direct financing leases are recognized at the point of sale. In addition, the Company may lead or participate with a group of underwriters in raising investment capital on behalf of securities issuers and charge underwriting fees. These fees are recognized at securities issuance. The Company, in its role as lead underwriter, arranges deal structuring and use of outside vendors

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for the underwriting group. The Company recognizes only those fees and expenses related to its underwriting commitment.

Mortgage Banking Revenue Mortgage banking revenue includes revenue derived from mortgages originated and subsequently sold, generally with servicing retained. The primary components include: gains and losses on mortgage sales; servicing revenue; changes in fair value for mortgage loans originated with the intent to sell and measured at fair value under the fair value option; changes in fair value for derivative commitments to purchase and originate mortgage loans; changes in the fair value of mortgage servicing rights (“MSRs”); and the impact of risk management activities associated with the mortgage origination pipeline, funded loans and MSRs. Net interest income from mortgage loans is recorded in interest income. Refer to Other Significant Policies in Note 1, as well as Note 9 and Note 21 for a further discussion of MSRs. Mortgage banking revenue is reported within the Consumer and Business Banking line of business.

Investment Products Fees Investment products fees include commissions related to the execution of requested security trades, distribution fees from sale of mutual funds, and investment advisory fees. Commissions and investment advisory fees are recognized as services are delivered to and utilized by the customer. Distribution fees are received over time, are dependent on the consumer maintaining their mutual fund asset position and the value of such position. These revenues are estimated and recognized at the point a significant reversal of revenue becomes remote. Investment products fees are predominately reported within the Wealth Management and Investment Services line of business.

Other Noninterest Income Other noninterest income is primarily related to financial assets including income on unconsolidated subsidiaries and equity method investments, gains on sale of other investments and corporate owned life insurance proceeds. The Company reports other noninterest income across all lines of business.

Other Significant Policies

Goodwill and Other Intangible Assets Goodwill is recorded on acquired businesses if the purchase price exceeds the fair value of the net assets acquired. Other intangible assets are recorded at their fair value upon completion of a business acquisition or certain other transactions, and generally represent the value of customer contracts or relationships. Goodwill is not amortized but is subject, at a minimum, to annual tests for impairment at a reporting unit level. In certain situations, an interim impairment test may be required if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Other intangible assets are amortized over their estimated useful lives, using straight-line and accelerated methods and are subject to impairment if events or circumstances indicate a possible inability to realize the carrying amount. Determining the amount of goodwill impairment, if any,

includes assessing the current implied fair value of the reporting unit as if it were being acquired in a business combination and comparing it to the carrying amount of the reporting unit’s goodwill. Determining the amount of other intangible asset impairment, if any, includes assessing the present value of the estimated future cash flows associated with the intangible asset and comparing it to the carrying amount of the asset.

Income Taxes Deferred taxes are recorded to reflect the tax consequences on future years of differences between the tax basis of assets and liabilities and their financial reporting carrying amounts. The Company uses the deferral method of accounting on investments that generate investment tax credits. Under this method, the investment tax credits are recognized as a reduction to the related asset. For certain investments in qualified affordable housing projects, the Company presents the expense in tax expense rather than noninterest expense.

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

Pensions For purposes of its pension plans, the Company utilizes its fiscal year-end as the measurement date. At the measurement date, plan assets are determined based on fair value, generally representing observable market prices or the net asset value provided by the funds’ trustee or administrator. The actuarial cost method used to compute the pension liabilities and related expense is the projected unit credit method. The projected benefit obligation is principally determined based on the present value of projected benefit distributions at an assumed discount rate. The discount rate utilized is based on the investment yield of high quality corporate bonds available in the marketplace with maturities equal to projected cash flows of future benefit payments as of the measurement date. Periodic pension expense (or income) includes service costs, interest costs based on the assumed discount rate, the expected return on plan assets based on an actuarially derived market-related value and amortization of actuarial gains and losses. Service cost is included in employee benefits expense on the Consolidated Statement of Income, with all other components of periodic pension expense included in other noninterest expense on the Consolidated Statement of Income. Pension accounting reflects the long-term nature of benefit obligations and the investment horizon of plan assets, and can have the effect of reducing earnings volatility related to short-term changes in interest rates and market valuations. Actuarial gains and losses include the impact of plan amendments and various unrecognized gains and losses which are deferred and amortized over the future service periods of active employees. The market-related value utilized to determine the expected return on

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plan assets is based on fair value adjusted for the difference between expected returns and actual performance of plan assets. The unrealized difference between actual experience and expected returns is included in expense over a period of approximately fifteen years. The overfunded or underfunded status of the plans is recorded as an asset or liability on the Consolidated Balance Sheet, with changes in that status recognized through other comprehensive income (loss).

Premises and Equipment Premises and equipment are stated at cost less accumulated depreciation and depreciated primarily on a straight-line basis over the estimated life of the assets. Estimated useful lives range up to 40 years for newly constructed buildings and from 3 to 25 years for furniture and equipment.

The Company, as lessee, records an ROU asset for each lease with an original term greater than 12 months. ROU assets are included in premises and equipment, with the corresponding lease liabilities included in long-term debt and other liabilities.

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

Per Share Calculations Earnings per common share is calculated using the two-class method under which earnings are allocated to common shareholders and holders of participating securities. Unvested stock-based compensation awards that contain nonforfeitable rights to dividends or dividend equivalents are considered participating securities under the two-class method. Net income applicable to U.S. Bancorp common shareholders is then divided by the weighted-average number of common shares outstanding to determine earnings per common share. Diluted earnings per common share is calculated by adjusting income and outstanding shares, assuming conversion of all potentially dilutive securities.

  NOTE 2   Accounting Changes

Accounting for Leases Effective January 1, 2019, the Company adopted accounting guidance, issued by the Financial Accounting

Standards Board (“FASB”) in February 2016, related to the accounting for leases. This guidance requires lessees to recognize all leases on the Consolidated Balance Sheet as lease assets and lease liabilities based primarily on the present value of future lease payments. The Company recognized approximately $1.3 billion of lease assets and related liabilities on its Consolidated Balance Sheet at the adoption date. In addition, lessors are now required to consider lease residual exposures of sales-type and direct financing leases when determining the allowance for credit losses. The adoption of this guidance was not material to the Company’s Consolidated Statement of Income.

Financial Instruments—Credit Losses Effective January 1, 2020, the Company adopted accounting guidance, issued by the FASB in June 2016, related to the impairment of financial instruments. This guidance changes impairment recognition to a model that is based on expected losses rather than incurred losses, which is intended to result in more timely recognition of credit losses. This guidance is also intended to reduce the complexity of accounting guidance by decreasing the number of credit impairment models that entities use to account for debt instruments. In addition, the guidance requires additional credit quality disclosures for loans. Upon adoption, the Company increased its allowance for credit losses by approximately $1.5 billion and reduced retained earnings net of deferred tax balances.

When determining expected losses, the Company uses multiple economic scenarios and a three-year reasonable and supportable forecast period, which incorporates historical loss experience in years two and three. After the forecast period, the Company fully reverts to long-term historical loss experience, adjusted for prepayments, to estimate losses over the remaining life.

The increase in the allowance was primarily related to the commercial, credit card, installment and other retail loan portfolios where the allowance for loan losses had not previously considered the full term of the loans.

The adoption of this guidance did not have a material impact on the Company’s available-for-sale securities as most of this portfolio consists of U.S. Treasury and residential agency mortgage-backed securities that inherently have an immaterial risk of loss.

NOTE 3	Restrictions on Cash and Due from
	Banks

Banking regulators require bank subsidiaries to maintain minimum average reserve balances, either in the form of vault cash or reserve balances held with central banks or other financial institutions. The amount of required reserve balances were approximately $3.2 billion and $3.1 billion at December 31, 2019 and 2018, respectively, and primarily represent those required to be held at the Federal Reserve Bank. In addition to vault cash, the Company held balances at the Federal Reserve Bank and other financial institutions of $8.0 billion and $7.5 billion at December 31, 2019 and 2018, respectively, to meet these requirements. These balances are included in cash and due from banks on the Consolidated Balance Sheet.

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  NOTE 4     Investment Securities    

The Company’s held-to-maturity investment securities are carried at historical cost, adjusted for amortization of premiums and accretion of discounts and credit-related other-than-temporary impairment. The Company’s available-for-sale investment securities are carried at fair value with unrealized net gains or losses reported within accumulated other comprehensive income (loss) in shareholders’ equity.

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

	2019											2018
					Unrealized Losses											Unrealized Losses
(Dollars in Millions)	Amortized Cost		Unrealized Gains		Other-than- Temporary(a)		Other(b)			Fair Value		Amortized Cost		Unrealized Gains		Other-than- Temporary(a)		Other(b)			Fair Value
Held-to-maturity
U.S. Treasury and agencies	$	–	$	–	$	–	$	–		$	–	$	5,102	$	2	$	–	$	(143	)	$	4,961
Residential agency mortgage-backed securities		–		–		–		–			–		40,920		45		–		(994	)		39,971
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations		–		–		–		–			–		–		1		–		–			1
Other		–		–		–		–			–		5		2		–		–			7
Obligations of state and political subdivisions		–		–		–		–			–		6		1		–		–			7
Obligations of foreign governments		–		–		–		–			–		9		–		–		–			9
Other		–		–		–		–			–		8		–		–		–			8
Total held-to-maturity	$	–	$	–	$	–	$	–		$	–	$	46,050	$	51	$	–	$	(1,137	)	$	44,964
Available-for-sale
U.S. Treasury and agencies	$	19,845	$	61	$	–	$	(67	)	$	19,839	$	19,604	$	11	$	–	$	(358	)	$	19,257
Mortgage-backed securities
Residential agency		93,903		557		–		(349	)		94,111		40,542		120		–		(910	)		39,752
Commercial agency		1,482		–		–		(29	)		1,453		2		–		–		–			2
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations		–		1		–		–			1		–		–		–		–			–
Other		375		7		–		–			382		397		6		–		–			403
Obligations of state and political subdivisions		6,499		318		–		(3	)		6,814		6,836		37		–		(172	)		6,701
Obligations of foreign governments		9		–		–		–			9		–		–		–		–			–
Corporate debt securities		4		–		–		–			4		–		–		–		–			–
Total available-for-sale	$	122,117	$	944	$	–	$	(448	)	$	122,613	$	67,381	$	174	$	–	$	(1,440	)	$	66,115

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

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

On December 31, 2019, the Company transferred all $43.6 billion of its held-to-maturity investment securities outstanding to the available-for-sale category to reflect its new intent for these securities, as a result of changes to regulatory capital requirements promulgated in 2019. In addition, the Company recognized $141 million of net unrealized gains on its Consolidated Balance Sheet as a result of the transfer.

Investment securities with a fair value of $8.4 billion at December 31, 2019, and $10.9 billion at December 31, 2018,

were pledged to secure public, private and trust deposits, repurchase agreements and for other purposes required by contractual obligation or law. Included in these amounts were securities where the Company and certain counterparties have agreements granting the counterparties the right to sell or pledge the securities. Investment securities securing these types of arrangements had a fair value of $269 million at December 31, 2019, and $2.1 billion at December 31, 2018.

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

Year Ended December 31 (Dollars in Millions)	2019		2018		2017
Taxable	$	2,680	$	2,396	$	2,043
Non-taxable		213		220		189
Total interest income from investment securities	$	2,893	$	2,616	$	2,232

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

Year Ended December 31 (Dollars in Millions)	2019			2018		2017
Realized gains	$	99		$	30	$	75
Realized losses		(26	)		–		(18	)
Net realized gains (losses)	$	73		$	30	$	57
Income tax (benefit) on net realized gains (losses)	$	18		$	7	$	22

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

earnings for investment securities not intended to be sold by estimating the future cash flows of each individual investment security, using market information where available, and discounting the cash flows at the original effective rate of the investment security. Other-than-temporary impairment recorded in other comprehensive income (loss) is measured as the difference between that discounted amount and the fair value of each investment security. The total amount of other-than-temporary impairment recorded was immaterial for the years ended December 31, 2019, 2018 and 2017.

At December 31, 2019, certain investment securities had a fair value below amortized cost. The following table shows the gross unrealized losses and fair value of the Company’s available-for-sale investment securities with unrealized losses, aggregated by investment category and length of time the individual investment securities have been in continuous unrealized loss positions, at December 31, 2019:

	Less Than 12 Months					12 Months or Greater					Total
(Dollars in Millions)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury and agencies	$	3,869	$	(40	)	$	6,265	$	(27	)	$	10,134	$	(67	)
Residential agency mortgage-backed securities		16,292		(46	)		24,346		(303	)		40,638		(349	)
Commercial agency mortgage-backed securities		1,453		(29	)		–		–			1,453		(29	)
Other asset-backed securities		–		–			2		–			2		–
Obligations of state and political subdivisions		365		(3	)		–		–			365		(3	)
Corporate debt securities		4		–			–		–			4		–
Total investment securities	$	21,983	$	(118	)	$	30,613	$	(330	)	$	52,596	$	(448	)

The Company does not consider these unrealized losses to be credit-related. These unrealized losses primarily relate to changes in interest rates and market spreads subsequent to purchase. A substantial portion of investment securities that have unrealized losses are either U.S. Treasury and agencies, agency mortgage-backed or state and political securities. In general, the issuers of the investment securities are contractually prohibited

from prepayment at less than par, and the Company did not pay significant purchase premiums for these investment securities. At December 31, 2019, the Company had no plans to sell investment securities with unrealized losses, and believes it is more likely than not it would not be required to sell such investment securities before recovery of their amortized cost.

86    

The following table provides information about the amortized cost, fair value and yield by maturity date of the available-for-sale investment securities outstanding at December 31, 2019:

(Dollars in Millions)	Amortized Cost		Fair Value		Weighted- Average Maturity in Years		Weighted- Average Yield(e)
U.S. Treasury and Agencies
Maturing in one year or less	$	4,243	$	4,242		.6		1.61	%
Maturing after one year through five years		12,881		12,901		2.4		1.65
Maturing after five years through ten years		2,721		2,696		7.5		1.95
Maturing after ten years		–		–		–		–
Total	$	19,845	$	19,839		2.7		1.68	%
Mortgage-Backed Securities(a)
Maturing in one year or less	$	197	$	197		.7		2.28	%
Maturing after one year through five years		66,940		67,102		3.6		2.30
Maturing after five years through ten years		27,339		27,349		6.0		2.58
Maturing after ten years		909		916		11.4		2.76
Total	$	95,385	$	95,564		4.4		2.39	%
Asset-Backed Securities(a)
Maturing in one year or less	$	–	$	–		–		—	%
Maturing after one year through five years		374		381		3.1		3.09
Maturing after five years through ten years		1		1		6.1		2.56
Maturing after ten years		–		1		15.3		2.41
Total	$	375	$	383		3.1		3.09	%
Obligations of State and Political Subdivisions(b)(c)
Maturing in one year or less	$	66	$	66		.1		5.81	%
Maturing after one year through five years		695		722		3.0		4.50
Maturing after five years through ten years		5,720		6,004		7.1		4.24
Maturing after ten years		18		22		14.0		6.15
Total	$	6,499	$	6,814		6.6		4.29	%
Other
Maturing in one year or less	$	13	$	13		.3		2.66	%
Maturing after one year through five years		–		–		–		–
Maturing after five years through ten years		–		–		–		–
Maturing after ten years		–		–		–		–
Total	$	13	$	13		.3		2.66	%
Total investment securities(d)	$	122,117	$	122,613		4.2		2.38	%

(a) Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities that take into account anticipated future prepayments.

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

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

(d) The weighted-average maturity of total available-for-sale and held-to-maturity investment securities was 5.3 years at December 31, 2018, with a corresponding weighted-average yield of 2.52 percent.

(e) Weighted-average yields for obligations of state and political subdivisions are presented on a fully-taxable equivalent basis based on a federal income tax rate of 21 percent. Yields on investment securities are computed based on amortized cost balances, excluding any premiums or discounts recorded related to the transfer of investment securities at fair value from available-for-sale to held-to-maturity.

87    

  NOTE 5   Loans and Allowance for Credit Losses

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

(Dollars in Millions)	2019		2018
Commercial
Commercial	$	98,168	$	96,849
Lease financing		5,695		5,595
Total commercial		103,863		102,444
Commercial Real Estate
Commercial mortgages		29,404		28,596
Construction and development		10,342		10,943
Total commercial real estate		39,746		39,539
Residential Mortgages
Residential mortgages		59,865		53,034
Home equity loans, first liens		10,721		12,000
Total residential mortgages		70,586		65,034
Credit Card		24,789		23,363
Other Retail
Retail leasing		8,490		8,546
Home equity and second mortgages		15,036		16,122
Revolving credit		2,899		3,088
Installment		11,038		9,676
Automobile		19,435		18,719
Student		220		279
Total other retail		57,118		56,430
Total loans	$	296,102	$	286,810

The Company had loans of $96.2 billion at December 31, 2019, and $88.7 billion at December 31, 2018, pledged at the Federal Home Loan Bank, and loans of $76.3 billion at December 31, 2019, and $70.1 billion at December 31, 2018, pledged at the Federal Reserve Bank.

The Company offers a broad array of lending products to consumer and commercial customers, in various industries, across several geographical locations, predominately in the states in which it has Consumer and Business Banking offices. Collateral for commercial and commercial real estate loans may include marketable securities, accounts receivable, inventory, equipment, real estate, or the related property.

Originated loans are reported at the principal amount outstanding, net of unearned interest and deferred fees and

costs, and any partial charge-offs recorded. Net unearned interest and deferred fees and costs amounted to $781 million at December 31, 2019 and $872 million at December 31, 2018. All purchased loans are recorded at fair value at the date of purchase. The Company evaluates purchased loans for impairment at the date of purchase in accordance with applicable authoritative accounting guidance. Purchased loans with evidence of credit deterioration since origination for which it is probable that all contractually required payments will not be collected are considered “purchased impaired loans.” All other purchased loans are considered “purchased nonimpaired loans.”

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Allowance for Credit Losses The allowance for credit losses is established for probable and estimable losses incurred in the Company’s loan and lease portfolio, including unfunded credit

commitments. The allowance for credit losses is increased through provisions charged to earnings and reduced by net charge-offs.

Activity in the allowance for credit losses by portfolio class was as follows:

(Dollars in Millions)	Commercial			Commercial Real Estate			Residential Mortgages			Credit Card			Other Retail			Covered Loans			Total Loans
Balance at December 31, 2018
Balance at beginning of period	$	1,454		$	800		$	455		$	1,102		$	630		$	–		$	4,441
Add
Provision for credit losses		315			13			(19	)		919			276			–			1,504
Deduct
Loans charged-off		399			21			34			1,028			385			–			1,867
Less recoveries of loans charged-off		(114	)		(7	)		(31	)		(135	)		(126	)		–			(413	)
Net loans charged-off		285			14			3			893			259			–			1,454
Balance at December 31, 2019	$	1,484		$	799		$	433		$	1,128		$	647		$	–		$	4,491
Balance at December 31, 2017
Balance at beginning of period	$	1,372		$	831		$	449		$	1,056		$	678		$	31		$	4,417
Add
Provision for credit losses		333			(50	)		23			892			211			(30	)		1,379
Deduct
Loans charged-off		350			9			48			970			383			–			1,760
Less recoveries of loans charged-off		(99	)		(28	)		(31	)		(124	)		(124	)		–			(406	)
Net loans charged-off		251			(19	)		17			846			259			–			1,354
Other changes(a)		–			–			–			–			–			(1	)		(1	)
Balance at December 31, 2018	$	1,454		$	800		$	455		$	1,102		$	630		$	–		$	4,441
Balance at December 31, 2016
Balance at beginning of period	$	1,450		$	812		$	510		$	934		$	617		$	34		$	4,357
Add
Provision for credit losses		186			19			(24	)		908			304			(3	)		1,390
Deduct
Loans charged-off		414			30			65			887			355			–			1,751
Less recoveries of loans charged-off		(150	)		(30	)		(28	)		(101	)		(112	)		–			(421	)
Net loans charged-off		264			–			37			786			243			–			1,330
Balance at December 31, 2017	$	1,372		$	831		$	449		$	1,056		$	678		$	31		$	4,417

(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. 

Additional detail of the allowance for credit losses by portfolio class was as follows:

(Dollars in Millions)	Commercial		Commercial Real Estate		Residential Mortgages		Credit Card		Other Retail		Total Loans
Allowance Balance at December 31, 2019 Related to
Loans individually evaluated for impairment(a)	$	16	$	3	$	–	$	–	$	–	$	19
TDRs collectively evaluated for impairment		20		3		109		81		10		223
Other loans collectively evaluated for impairment		1,448		793		309		1,047		637		4,234
Loans acquired with deteriorated credit quality		–		–		15		–		–		15
Total allowance for credit losses	$	1,484	$	799	$	433	$	1,128	$	647	$	4,491
Allowance Balance at December 31, 2018 Related to
Loans individually evaluated for impairment(a)	$	16	$	8	$	–	$	–	$	–	$	24
TDRs collectively evaluated for impairment		15		3		126		69		12		225
Other loans collectively evaluated for impairment		1,423		788		314		1,033		618		4,176
Loans acquired with deteriorated credit quality		–		1		15		–		–		16
Total allowance for credit losses	$	1,454	$	800	$	455	$	1,102	$	630	$	4,441

(a) Represents the allowance for credit losses related to loans greater than $5 million classified as nonperforming or TDRs.

89    

Additional detail of loan balances by portfolio class was as follows:

(Dollars in Millions)	Commercial		Commercial Real Estate		Residential Mortgages		Credit Card		Other Retail		Total Loans
December 31, 2019
Loans individually evaluated for impairment(a)	$	253	$	61	$	–	$	–	$	–	$	314
TDRs collectively evaluated for impairment		163		138		3,044		263		185		3,793
Other loans collectively evaluated for impairment		103,447		39,513		67,315		24,526		56,933		291,734
Loans acquired with deteriorated credit quality		–		34		227		–		–		261
Total loans	$	103,863	$	39,746	$	70,586	$	24,789	$	57,118	$	296,102
December 31, 2018
Loans individually evaluated for impairment(a)	$	262	$	86	$	–	$	–	$	–	$	348
TDRs collectively evaluated for impairment		151		129		3,252		245		183		3,960
Other loans collectively evaluated for impairment		102,031		39,297		61,465		23,118		56,247		282,158
Loans acquired with deteriorated credit quality		–		27		317		–		–		344
Total loans	$	102,444	$	39,539	$	65,034	$	23,363	$	56,430	$	286,810

(a) Represents loans greater than $5 million classified as nonperforming or TDRs.

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

ratings as defined by the Company. These credit quality ratings are an important part of the Company’s overall credit risk management and evaluation of its allowance for credit losses.

The following table provides a summary of loans by portfolio class, including the delinquency status of those that continue to accrue interest, and those that are nonperforming:

	Accruing
(Dollars in Millions)	Current		30-89 Days Past Due		90 Days or More Past Due		Nonperforming		Total
December 31, 2019
Commercial	$	103,273	$	307	$	79	$	204	$	103,863
Commercial real estate		39,627		34		3		82		39,746
Residential mortgages(a)		70,071		154		120		241		70,586
Credit card		24,162		321		306		–		24,789
Other retail		56,463		393		97		165		57,118
Total loans	$	293,596	$	1,209	$	605	$	692	$	296,102
December 31, 2018
Commercial	$	101,844	$	322	$	69	$	209	$	102,444
Commercial real estate		39,354		70		–		115		39,539
Residential mortgages(a)		64,443		181		114		296		65,034
Credit card		22,746		324		293		–		23,363
Other retail		55,722		403		108		197		56,430
Total loans	$	284,109	$	1,300	$	584	$	817	$	286,810

(a) At December 31, 2019, $428 million of loans 30–89 days past due and $1.7 billion of loans 90 days or more past due purchased from Government National Mortgage Association (“GNMA”) mortgage pools whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs, were classified as current, compared with $430 million and $1.7 billion at December 31, 2018, respectively.

At December 31, 2019, total nonperforming assets held by the Company were $829 million, compared with $989 million at December 31, 2018. Total nonperforming assets included $692 million of nonperforming loans, $78 million of OREO and $59 million of other nonperforming assets owned by the Company at December 31, 2019, compared with $817 million, $111 million and $61 million, respectively, at December 31, 2018.

At December 31, 2019, the amount of foreclosed residential real estate held by the Company, and included in OREO, was $74 million, compared with $106 million at December 31, 2018. These amounts exclude $155 million and $235 million at December 31, 2019 and 2018, respectively, of foreclosed

residential real estate related to mortgage loans whose payments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. In addition, the amount of residential mortgage loans secured by residential real estate in the process of foreclosure was $1.5 billion at December 31, 2019 and 2018, of which $1.2 billion at December 31, 2019 and 2018, related to loans purchased from Government National Mortgage Association (“GNMA”) mortgage pools whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs.

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The following table provides a summary of loans by portfolio class and the Company’s internal credit quality rating:

			Criticized
(Dollars in Millions)	Pass		Special Mention		Classified(a)		Total Criticized		Total
December 31, 2019
Commercial	$	101,850	$	1,147	$	866	$	2,013	$	103,863
Commercial real estate		38,872		484		390		874		39,746
Residential mortgages(b)		70,174		2		410		412		70,586
Credit card		24,483		–		306		306		24,789
Other retail		56,825		10		283		293		57,118
Total loans	$	292,204	$	1,643	$	2,255	$	3,898	$	296,102
Total outstanding commitments	$	619,224	$	2,451	$	2,873	$	5,324	$	624,548
December 31, 2018
Commercial	$	100,014	$	1,149	$	1,281	$	2,430	$	102,444
Commercial real estate		38,473		584		482		1,066		39,539
Residential mortgages(b)		64,570		1		463		464		65,034
Credit card		23,070		–		293		293		23,363
Other retail		56,101		6		323		329		56,430
Total loans	$	282,228	$	1,740	$	2,842	$	4,582	$	286,810
Total outstanding commitments	$	600,407	$	2,801	$	3,448	$	6,249	$	606,656

(a) Classified rating on consumer loans primarily based on delinquency status.

(b) At December 31, 2019, $1.7 billion of GNMA loans 90 days or more past due and $1.6 billion of restructured GNMA loans whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs were classified with a pass rating, unchanged from December 31, 2018.

For all loan classes, a loan is considered to be impaired when, based on current events or information, it is probable the Company will be unable to collect all amounts due per the contractual terms of the loan agreement. A summary of impaired loans, which include all nonaccrual and TDR loans, by portfolio class was as follows:

(Dollars in Millions)	Period-end Recorded Investment(a)		Unpaid Principal Balance		Valuation Allowance		Commitments to Lend Additional Funds
December 31, 2019
Commercial	$	483	$	1,048	$	39	$	158
Commercial real estate		242		603		7		–
Residential mortgages		1,515		1,827		71		–
Credit card		263		263		81		–
Other retail		318		417		12		2
Total loans, excluding loans purchased from GNMA mortgage pools		2,821		4,158		210		160
Loans purchased from GNMA mortgage pools		1,622		1,622		39		–
Total	$	4,443	$	5,780	$	249	$	160
December 31, 2018
Commercial	$	467	$	1,006	$	32	$	106
Commercial real estate		279		511		12		2
Residential mortgages		1,709		1,879		86		–
Credit card		245		245		69		–
Other retail		335		418		14		5
Total loans, excluding loans purchased from GNMA mortgage pools		3,035		4,059		213		113
Loans purchased from GNMA mortgage pools		1,639		1,639		41		–
Total	$	4,674	$	5,698	$	254	$	113

(a) Substantially all loans classified as impaired at December 31, 2019 and 2018, had an associated allowance for credit losses. The total amount of interest income recognized during 2019 on loans classified as impaired at December 31, 2019, excluding those acquired with deteriorated credit quality, was $194 million, compared to what would have been recognized at the original contractual terms of the loans of $246 million.

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Additional information on impaired loans follows for the years ended December 31 follows:

(Dollars in Millions)	Average Recorded Investment		Interest Income Recognized
2019
Commercial	$	520	$	9
Commercial real estate		248		11
Residential mortgages		1,622		92
Credit card		257		–
Other retail		323		12
Total loans, excluding loans purchased from GNMA mortgage pools		2,970		124
Loans purchased from GNMA mortgage pools		1,638		70
Total	$	4,608	$	194
2018
Commercial	$	497	$	8
Commercial real estate		273		13
Residential mortgages		1,817		76
Credit card		236		3
Other retail		309		16
Covered Loans		25		1
Total loans, excluding loans purchased from GNMA mortgage pools		3,157		117
Loans purchased from GNMA mortgage pools		1,640		47
Total	$	4,797	$	164
2017
Commercial	$	683	$	7
Commercial real estate		273		11
Residential mortgages		2,135		103
Credit card		229		3
Other retail		287		14
Covered Loans		37		1
Total loans, excluding loans purchased from GNMA mortgage pools		3,644		139
Loans purchased from GNMA mortgage pools		1,672		65
Total	$	5,316	$	204

92    

Troubled Debt Restructurings In certain circumstances, the Company may modify the terms of a loan to maximize the collection of amounts due when a borrower is experiencing financial difficulties or is expected to experience difficulties in the near-term. The following table provides a summary of loans modified as TDRs for the years ended December 31, by portfolio class:

(Dollars in Millions)	Number of Loans		Pre-Modification Outstanding Loan Balance		Post- Modification Outstanding Loan Balance
2019
Commercial		3,445	$	376	$	359
Commercial real estate		136		129		125
Residential mortgages		417		55		54
Credit card		34,247		185		186
Other retail		2,952		63		61
Total loans, excluding loans purchased from GNMA mortgage pools		41,197		808		785
Loans purchased from GNMA mortgage pools		6,257		856		827
Total loans		47,454	$	1,664	$	1,612
2018
Commercial		2,824	$	336	$	311
Commercial real estate		127		168		169
Residential mortgages		526		73		69
Credit card		33,318		169		171
Other retail		2,462		58		55
Covered Loans		3		1		1
Total loans, excluding loans purchased from GNMA mortgage pools		39,260		805		776
Loans purchased from GNMA mortgage pools		6,268		821		803
Total loans		45,528	$	1,626	$	1,579
2017
Commercial		2,758	$	380	$	328
Commercial real estate		128		82		78
Residential mortgages		800		90		88
Credit card		33,615		161		162
Other retail		3,881		79		68
Covered Loans		11		2		2
Total loans, excluding loans purchased from GNMA mortgage pools		41,193		794		726
Loans purchased from GNMA mortgage pools		6,791		881		867
Total loans		47,984	$	1,675	$	1,593

Residential mortgages, home equity and second mortgages, and loans purchased from GNMA mortgage pools in the table above include trial period arrangements offered to customers during the periods presented. The post-modification balances for these loans reflect the current outstanding balance until a permanent modification is made. In addition, the post-modification balances typically include capitalization of unpaid accrued interest and/or fees under the various modification programs. For those loans modified as TDRs during the fourth

quarter of 2019, at December 31, 2019, 41 residential mortgages, 17 home equity and second mortgage loans and 990 loans purchased from GNMA mortgage pools with outstanding balances of $6 million, $1 million and $136 million, respectively, were in a trial period and have estimated post-modification balances of $6 million, $1 million and $135 million, respectively, assuming permanent modification occurs at the end of the trial period.

93    

The following table provides a summary of TDR loans that defaulted (fully or partially charged-off or became 90 days or more past due) for the years ended December 31, that were modified as TDRs within 12 months previous to default:

(Dollars in Millions)	Number of Loans		Amount Defaulted
2019
Commercial		1,040	$	46
Commercial real estate		36		24
Residential mortgages		137		15
Credit card		8,273		40
Other retail		380		10
Total loans, excluding loans purchased from GNMA mortgage pools		9,866		135
Loans purchased from GNMA mortgage pools		997		131
Total loans		10,863	$	266
2018
Commercial		836	$	71
Commercial real estate		39		15
Residential mortgages		191		18
Credit card		8,012		35
Other retail		334		5
Covered loans		1		–
Total loans, excluding loans purchased from GNMA mortgage pools		9,413		144
Loans purchased from GNMA mortgage pools		1,447		187
Total loans		10,860	$	331
2017
Commercial		724	$	53
Commercial real estate		36		9
Residential mortgages		374		41
Credit card		8,372		36
Other retail		415		5
Covered loans		4		–
Total loans, excluding loans purchased from GNMA mortgage pools		9,925		144
Loans purchased from GNMA mortgage pools		1,369		177
Total loans		11,294	$	321

In addition to the defaults in the table above, the Company had a total of 826 residential mortgage loans, home equity and second mortgage loans and loans purchased from GNMA mortgage pools for the year ended December 31, 2019, where borrowers did not successfully complete the trial period

arrangement and, therefore, are no longer eligible for a permanent modification under the applicable modification program. These loans had aggregate outstanding balances of $111 million for the year ended December 31, 2019.

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  NOTE 6   Leases

The Company, as a lessor, originates retail and commercial leases either directly to the consumer or indirectly through dealer networks. Retail leases consist primarily of automobiles, while

commercial leases may include high dollar assets such as aircraft or lower cost items such as office equipment.

The components of the net investment in sales-type and direct financing leases, at December 31, were as follows:

(Dollars in Millions)	2019		2018
Lease receivables	$	12,324	$	12,207
Unguaranteed residual values accruing to the lessor’s benefit		1,834		1,877
Total net investment in sales-type and direct financing leases	$	14,158	$	14,084

The Company, as a lessor, recorded $996 million of revenue on its Consolidated Statement of Income for the year ended 

December 31, 2019, primarily consisting of interest income on sales-type and direct financing leases.

The contractual future lease payments to be received by the Company, at December 31, 2019, were as follows:

(Dollars in Millions)	Sales-type and direct financing leases			Operating leases
2020	$	4,755		$	176
2021		3,729			142
2022		2,766			103
2023		1,248			69
2024		382			50
Thereafter		483			52
Total lease payments		13,363		$	592
Amounts representing interest		(1,039	)
Lease receivables	$	12,324

The Company, as lessee, leases certain assets for use in its operations. Leased assets primarily include retail branches, operations centers and other corporate locations, and, to a lesser extent, office and computer equipment. For each lease with an original term greater than 12 months, the Company records a lease liability and a corresponding right of use (“ROU”) asset. At December 31, 2019, the Company’s ROU assets included in premises and equipment and lease liabilities included in long-term

debt and other liabilities, were $1.3 billion and $1.4 billion, respectively.

Total costs incurred by the Company, as a lessee, were $394 million for the year ended December 31, 2019, and principally related to contractual lease payments on operating leases. The Company’s leases do not impose significant covenants or other restrictions on the Company.

The following table presents amounts relevant to the Company’s assets leased for use in its operations for the year ended December 31, 2019:

(Dollars in Millions)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	302
Operating cash flows from finance leases		7
Financing cash flows from finance leases		10
Right of use assets obtained in exchange for new operating lease liabilities		134
Right of use assets obtained in exchange for new finance lease liabilities		10

The following table presents the weighted-average remaining lease terms and discount rates of the Company’s assets leased for use in its operations at December 31, 2019:

Weighted-average remaining lease term of operating leases (in years)	7.4
Weighted-average remaining lease term of finance leases (in years)	10.7
Weighted-average discount rate of operating leases	3.2	%
Weighted-average discount rate of finance leases	14.3	%

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The contractual future lease obligations of the Company at December 31, 2019, were as follows:

(Dollars in Millions)	Operating leases			Finance leases
2020	$	296		$	17
2021		267			15
2022		226			13
2023		180			12
2024		132			10
Thereafter		391			38
Total lease payments		1,492			105
Amounts representing interest		(150	)		(31	)
Lease liabilities	$	1,342		$	74

NOTE 7	Accounting for Transfers and Servicing of Financial Assets and Variable Interest
	Entities

The Company transfers financial assets in the normal course of business. The majority of the Company’s financial asset transfers are residential mortgage loan sales primarily to government-sponsored enterprises (“GSEs”), transfers of tax-advantaged investments, commercial loan sales through participation agreements, and other individual or portfolio loan and securities sales. In accordance with the accounting guidance for asset transfers, the Company considers any ongoing involvement with transferred assets in determining whether the assets can be derecognized from the balance sheet. Guarantees provided to certain third parties in connection with the transfer of assets are further discussed in Note 22.

For loans sold under participation agreements, the Company also considers whether the terms of the loan participation agreement meet the accounting definition of a participating interest. With the exception of servicing and certain performance-based guarantees, the Company’s continuing involvement with financial assets sold is minimal and generally limited to market customary representation and warranty clauses. Any gain or loss on sale depends on the previous carrying amount of the transferred financial assets, the consideration received, and any liabilities incurred in exchange for the transferred assets. Upon transfer, any servicing assets and other interests that continue to be held by the Company are initially recognized at fair value. For further information on MSRs, refer to Note 9. On a limited basis, the Company may acquire and package high-grade corporate bonds for select corporate customers, in which the Company generally has no continuing involvement with these transactions. Additionally, the Company is an authorized GNMA issuer and issues GNMA securities on a regular basis. The Company has no other asset securitizations or similar asset-backed financing arrangements that are off-balance sheet.

The Company also provides financial support primarily through the use of waivers of trust and investment management fees associated with various unconsolidated registered money market funds it manages. The Company provided $30 million, $25 million, and $23 million of support to the funds during the years ended December 31, 2019, 2018 and 2017, respectively.

The Company is involved in various entities that are considered to be VIEs. The Company’s investments in VIEs are

primarily related to investments promoting affordable housing, community development and renewable energy sources. Some of these tax-advantaged investments support the Company’s regulatory compliance with the Community Reinvestment Act. The Company’s investments in these entities generate a return primarily through the realization of federal and state income tax credits, and other tax benefits, such as tax deductions from operating losses of the investments, over specified time periods. These tax credits are recognized as a reduction of tax expense or, for investments qualifying as investment tax credits, as a reduction to the related investment asset. The Company recognized federal and state income tax credits related to its affordable housing and other tax-advantaged investments in tax expense of $615 million, $689 million and $711 million for the years ended December 31, 2019, 2018 and 2017, respectively. The Company also recognized $506 million, $639 million and $1.5 billion of investment tax credits for the years ended December 31, 2019, 2018 and 2017, respectively. The Company recognized $557 million, $604 million and $741 million of expenses related to all of these investments for the years ended December 31, 2019, 2018 and 2017, respectively, of which $318 million, $275 million and $317 million, respectively, were included in tax expense and the remaining amounts were included in noninterest expense.

The Company is not required to consolidate VIEs in which it has concluded it does not have a controlling financial interest, and thus is not the primary beneficiary. In such cases, the Company does not have both the power to direct the entities’ most significant activities and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs.

The Company’s investments in these unconsolidated VIEs are carried in other assets on the Consolidated Balance Sheet. The Company’s unfunded capital and other commitments related to these unconsolidated VIEs are generally carried in other liabilities on the Consolidated Balance Sheet. The Company’s maximum exposure to loss from these unconsolidated VIEs include the investment recorded on the Company’s Consolidated Balance Sheet, net of unfunded capital commitments, and previously recorded tax credits which remain subject to recapture

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by taxing authorities based on compliance features required to be met at the project level. While the Company believes potential losses from these investments are remote, the maximum exposure was determined by assuming a scenario where the community-based business and housing projects completely fail and do not meet certain government compliance requirements resulting in recapture of the related tax credits. 

The following table provides a summary of investments in community development and tax-advantaged VIEs that the Company has not consolidated:

At December 31 (Dollars in Millions)	2019		2018
Investment carrying amount	$	6,148	$	5,823
Unfunded capital and other commitments		2,938		2,778
Maximum exposure to loss		12,118		12,360

The Company also has noncontrolling financial investments in private investment funds and partnerships considered to be VIEs, which are not consolidated. The Company’s recorded investment in these entities, carried in other assets on the Consolidated Balance Sheet, was approximately $31 million at December 31, 2019 and $27 million at December 31, 2018. The maximum exposure to loss related to these VIEs was $55 million at December 31, 2019 and $52 million at December 31, 2018, representing the Company’s investment balance and its unfunded commitments to invest additional amounts.

The Company’s individual net investments in unconsolidated VIEs, which exclude any unfunded capital commitments, ranged from less than $1 million to $87 million at December 31, 2019, compared with less than $1 million to $95 million at December 31, 2018.

The Company is required to consolidate VIEs in which it has concluded it has a controlling financial interest. The Company sponsors entities to which it transfers its interests in tax-advantaged investments to third parties. At December 31,

2019, approximately $4.0 billion of the Company’s assets and $3.2 billion of its liabilities included on the Consolidated Balance Sheet were related to community development and tax-advantaged investment VIEs which the Company has consolidated, primarily related to these transfers. These amounts compared to $3.9 billion and $2.7 billion, respectively, at December 31, 2018. The majority of the assets of these consolidated VIEs are reported in other assets, and the liabilities are reported in long-term debt and other liabilities. The assets of a particular VIE are the primary source of funds to settle its obligations. The creditors of the VIEs do not have recourse to the general credit of the Company. The Company’s exposure to the consolidated VIEs is generally limited to the carrying value of its variable interests plus any related tax credits previously recognized or transferred to others with a guarantee.

The Company also sponsors a conduit to which it previously transferred high-grade investment securities. The Company consolidates the conduit because of its ability to manage the activities of the conduit. At December 31, 2019, $12 million of the available-for-sale investment securities on the Company’s Consolidated Balance Sheet were related to the conduit, compared with $14 million of the held-to-maturity investment securities at December 31, 2018.

In addition, the Company sponsors a municipal bond securities tender option bond program. The Company controls the activities of the program’s entities, is entitled to the residual returns and provides liquidity and remarketing arrangements to the program. As a result, the Company has consolidated the program’s entities. At December 31, 2019, $3.0 billion of available-for-sale investment securities and $2.7 billion of short-term borrowings on the Consolidated Balance Sheet were related to the tender option bond program, compared with $2.4 billion of available-for-sale investment securities and $2.3 billion of short-term borrowings at December 31, 2018.

  NOTE 8   Premises and Equipment

Premises and equipment at December 31 consisted of the following:

(Dollars in Millions)	2019			2018
Land	$	504		$	515
Buildings and improvements		3,513			3,481
Furniture, fixtures and equipment		3,366			3,110
Right of use assets on operating leases		1,141			–
Right of use assets on finance leases		111			121
Construction in progress		21			20
		8,656			7,247
Less accumulated depreciation and amortization		(4,954	)		(4,790	)
Total	$	3,702		$	2,457

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  NOTE 9   Mortgage Servicing Rights

The Company capitalizes MSRs as separate assets when loans are sold and servicing is retained. MSRs may also be purchased from others. The Company carries MSRs at fair value, with changes in the fair value recorded in earnings during the period in which they occur. The Company serviced $226.0 billion of residential mortgage loans for others at December 31, 2019, and $231.5 billion at December 31, 2018, including subserviced mortgages with no corresponding MSR asset. Included in mortgage banking revenue are the MSR fair value changes arising

from market rate and model assumption changes, net of the value change in derivatives used to economically hedge MSRs. These changes resulted in a net loss of $24 million and net gains of $47 million and $15 million for the years ended December 31, 2019, 2018 and 2017, respectively. Loan servicing and ancillary fees, not including valuation changes, included in mortgage banking revenue were $734 million, $746 million and $746 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Changes in fair value of capitalized MSRs for the years ended December 31, are summarized as follows:

(Dollars in Millions)	2019			2018			2017
Balance at beginning of period	$	2,791		$	2,645		$	2,591
Rights purchased		20			8			13
Rights capitalized		559			397			445
Rights sold(a)		5			(27	)		–
Changes in fair value of MSRs
Due to fluctuations in market interest rates(b)		(390	)		98			(23	)
Due to revised assumptions or models(c)		23			56			18
Other changes in fair value(d)		(462	)		(386	)		(399	)
Balance at end of period	$	2,546		$	2,791		$	2,645

(a) MSRs sold in 2019 include those having a negative fair value, resulting from the related loans being severely delinquent.

(b) Includes changes in MSR value associated with changes in market interest rates, including estimated prepayment rates and anticipated earnings on escrow deposits.

(c) Includes changes in MSR value not caused by changes in market interest rates, such as changes in cost to service, ancillary income and option adjusted spread, as well as the impact of any model changes.

(d) Primarily represents changes due to realization of expected cash flows over time (decay).

The estimated sensitivity to changes in interest rates of the fair value of the MSR portfolio and the related derivative instruments as of December 31 follows:

	2019																		2018
(Dollars in Millions)	Down 100 bps			Down 50 bps			Down 25 bps			Up 25 bps			Up 50 bps			Up 100 bps			Down 100 bps			Down 50 bps			Down 25 bps			Up 25 bps			Up 50 bps			Up 100 bps
MSR portfolio	$	(663	)	$	(316	)	$	(153	)	$	141		$	269		$	485		$	(501	)	$	(223	)	$	(105	)	$	92		$	171		$	295
Derivative instrument hedges		613			306			152			(143	)		(279	)		(550	)		455			215			104			(94	)		(177	)		(321	)
Net sensitivity	$	(50	)	$	(10	)	$	(1	)	$	(2	)	$	(10	)	$	(65	)	$	(46	)	$	(8	)	$	(1	)	$	(2	)	$	(6	)	$	(26	)

The fair value of MSRs and their sensitivity to changes in interest rates is influenced by the mix of the servicing portfolio and characteristics of each segment of the portfolio. The Company’s servicing portfolio consists of the distinct portfolios of government-insured mortgages, conventional mortgages and Housing Finance Agency (“HFA”) mortgages. The servicing portfolios are predominantly comprised of fixed-rate agency loans

with limited adjustable-rate or jumbo mortgage loans. The HFA servicing portfolio is comprised of loans originated under state and local housing authority program guidelines which assist purchases by first-time or low- to moderate-income homebuyers through a favorable rate subsidy, down payment and/or closing cost assistance on government- and conventional-insured mortgages.

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A summary of the Company’s MSRs and related characteristics by portfolio as of December 31 follows:

	2019												2018
(Dollars in Millions)	HFA			Government			Conventional(d)			Total			HFA			Government			Conventional(d)			Total
Servicing portfolio(a)	$	44,906		$	35,302		$	143,310		$	223,518		$	44,384		$	35,990		$	148,910		$	229,284
Fair value	$	486		$	451		$	1,609		$	2,546		$	526		$	465		$	1,800		$	2,791
Value (bps)(b)		108			128			112			114			119			129			121			122
Weighted-average servicing fees (bps)		34			39			28			31			34			36			27			30
Multiple (value/servicing fees)		3.15			3.29			4.00			3.67			3.45			3.63			4.52			4.11
Weighted-average note rate		4.65	%		3.99	%		4.07	%		4.17	%		4.59	%		3.97	%		4.06	%		4.15	%
Weighted-average age (in years)		3.7			4.9			4.8			4.6			3.3			4.7			4.5			4.3
Weighted-average expected prepayment (constant prepayment rate)		12.2	%		13.7	%		12.2	%		12.4	%		9.8	%		11.0	%		9.1	%		9.5	%
Weighted-average expected life (in years)		6.5			5.7			5.9			6.0			7.7			6.7			7.1			7.2
Weighted-average option adjusted spread(c)		8.4	%		7.9	%		6.9	%		7.3	%		8.6	%		8.3	%		7.2	%		7.6	%

(a) Represents principal balance of mortgages having corresponding MSR asset.

(b) Calculated as fair value divided by the servicing portfolio.

(c) Option adjusted spread is the incremental spread added to the risk-free rate to reflect optionality and other risk inherent in the MSRs.

(d) Represents loans sold primarily to GSEs.

  NOTE 10   Intangible Assets

Intangible assets consisted of the following:

At December 31 (Dollars in Millions)	Estimated Life(a)	Amortization Method(b)		Balance
				2019		2018
Goodwill			(c)	$	9,655	$	9,369
Merchant processing contracts	6 years/7 years		SL/AC		225		155
Core deposit benefits	22 years/5 years		SL/AC		82		104
Mortgage servicing rights			(c)		2,546		2,791
Trust relationships	10 years/7 years		SL/AC		27		34
Other identified intangibles	6 years/4 years		SL/AC		343		308
Total				$	12,878	$	12,761

(a) Estimated life represents the amortization period for assets subject to the straight line method and the weighted-average or life of the underlying cash flows amortization period for intangibles subject to accelerated methods. If more than one amortization method is used for a category, the estimated life for each method is calculated and reported separately.

(b) Amortization methods:         SL = straight line method

                                                      AC = accelerated methods generally based on cash flows

(c) Goodwill is evaluated for impairment, but not amortized. Mortgage servicing rights are recorded at fair value, and are not amortized.

Aggregate amortization expense consisted of the following:

Year Ended December 31 (Dollars in Millions)	2019		2018		2017
Merchant processing contracts	$	45	$	24	$	24
Core deposit benefits		22		26		30
Trust relationships		10		11		14
Other identified intangibles		91		100		107
Total	$	168	$	161	$	175

The estimated amortization expense for the next five years is as follows:

(Dollars in Millions)
2020	$	155
2021		130
2022		109
2023		76
2024		60

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The following table reflects the changes in the carrying value of goodwill for the years ended December 31, 2019, 2018 and 2017: 

(Dollars in Millions)	Corporate and Commercial Banking		Consumer and Business Banking			Wealth Management and Investment Services			Payment Services			Treasury and Corporate Support		Consolidated Company
Balance at December 31, 2016	$	1,647	$	3,681		$	1,566		$	2,450		$	–	$	9,344
Goodwill acquired		–		–			–			62			–		62
Foreign exchange translation and other		–		–			3			25			–		28
Balance at December 31, 2017	$	1,647	$	3,681		$	1,569		$	2,537		$	–	$	9,434
Goodwill acquired		–		–			–			105			–		105
Disposal		–		(155	)		–			–			–		(155	)
Foreign exchange translation and other		–		(51	)		49			(13	)		–		(15	)
Balance at December 31, 2018	$	1,647	$	3,475		$	1,618		$	2,629		$	–	$	9,369
Goodwill acquired		–		–			–			285			–		285
Foreign exchange translation and other		–		–			(1	)		2			–		1
Balance at December 31, 2019	$	1,647	$	3,475		$	1,617		$	2,916		$	–	$	9,655

  NOTE 11   Deposits

The composition of deposits at December 31 was as follows:

(Dollars in Millions)	2019		2018
Noninterest-bearing deposits	$	75,590	$	81,811
Interest-bearing deposits
Interest checking		75,949		73,994
Money market savings		120,082		100,396
Savings accounts		47,401		44,720
Time deposits		42,894		44,554
Total interest-bearing deposits		286,326		263,664
Total deposits	$	361,916	$	345,475

The maturities of time deposits outstanding at December 31, 2019 were as follows:

(Dollars in Millions)
2020	$	37,731
2021		2,700
2022		1,183
2023		673
2024		602
Thereafter		5
Total	$	42,894

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  NOTE 12   Short-Term Borrowings(a)

The following table is a summary of short-term borrowings for the last three years:

	2019					2018					2017
(Dollars in Millions)	Amount		Rate			Amount		Rate			Amount		Rate
At year-end
Federal funds purchased	$	828		1.45	%	$	458		2.05	%	$	252		.77	%
Securities sold under agreements to repurchase		1,165		1.41			2,582		2.20			803		.61
Commercial paper		7,576		1.07			6,940		1.35			8,303		.68
Other short-term borrowings		14,154		1.94			4,159		2.68			7,293		2.13
Total	$	23,723		1.62	%	$	14,139		1.92	%	$	16,651		1.31	%
Average for the year
Federal funds purchased	$	1,457		1.94	%	$	1,070		1.70	%	$	528		.86	%
Securities sold under agreements to repurchase		1,770		2.00			2,279		1.87			917		.44
Commercial paper		8,186		1.45			6,929		.94			8,236		.49
Other short-term borrowings		6,724		2.78			11,512		2.27			5,341		1.90
Total	$	18,137		2.04	%	$	21,790		1.78	%	$	15,022		1.00	%
Maximum month-end balance
Federal funds purchased	$	3,629				$	4,532				$	600
Securities sold under agreements to repurchase		2,755					3,225					927
Commercial paper		9,431					7,846					9,950
Other short-term borrowings		14,154					16,588					7,293

(a) Interest and rates are presented on a fully taxable-equivalent basis utilizing a tax rate of 21 percent for 2019 and 2018 and 35 percent for 2017.

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  NOTE 13   Long-Term Debt

Long-term debt (debt with original maturities of more than one year) at December 31 consisted of the following:

(Dollars in Millions)	Rate Type		Rate(a)			Maturity Date		2019		2018
U.S. Bancorp (Parent Company)
Subordinated notes		Fixed		2.950	%		2022	$	1,300	$	1,300
		Fixed		3.600	%		2024		1,000		1,000
		Fixed		7.500	%		2026		199		199
		Fixed		3.100	%		2026		1,000		1,000
		Fixed		3.000	%		2029		1,000		–
Medium-term notes		Fixed		.850% - 4.125	%		2021 - 2028		13,820		12,345
		Floating		2.576	%		2022		250		500
Other(b)									33		(53	)
Subtotal									18,602		16,291
Subsidiaries
Federal Home Loan Bank advances		Fixed		1.250% - 8.250	%		2020 - 2026		1,106		307
		Floating		2.165% - 2.461	%		2022 - 2026		3,272		4,272
Bank notes		Fixed		1.950% - 3.450	%		2020 - 2025		9,550		11,600
		Floating		.600% - 2.350	%		2020 - 2059		6,789		7,864
Other(c)									848		1,006
Subtotal									21,565		25,049
Total								$	40,167	$	41,340

(a) Weighted-average interest rates of medium-term notes, Federal Home Loan Bank advances and bank notes were 2.87 percent, 2.42 percent and 2.54 percent, respectively.

(b) Includes debt issuance fees and unrealized gains and losses and deferred amounts relating to derivative instruments.

(c) Includes consolidated community development and tax-advantaged investment VIEs, finance lease obligations, debt issuance fees, and unrealized gains and losses and deferred amounts relating to derivative instruments.

The Company has arrangements with the Federal Home Loan Bank and Federal Reserve Bank whereby the Company could have borrowed an additional $97.4 billion and $98.8 billion at December 31, 2019 and 2018, respectively, based on collateral available.

Maturities of long-term debt outstanding at December 31, 2019, were:

(Dollars in Millions)	Parent Company		Consolidated
2020	$	–	$	3,772
2021		2,696		9,430
2022		3,790		6,298
2023		–		2,799
2024		5,657		5,663
Thereafter		6,459		12,205
Total	$	18,602	$	40,167

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  NOTE 14   Shareholders’  Equity

At December 31, 2019 and 2018, the Company had authority to issue 4 billion shares of common stock and 50 million shares of preferred stock. The Company had 1.5 billion and 1.6 billion shares of common stock outstanding at December 31, 2019 and

2018, respectively. The Company had 45 million shares reserved for future issuances, primarily under its stock incentive plans at December 31, 2019.

The number of shares issued and outstanding and the carrying amount of each outstanding series of the Company’s preferred stock were as follows:

	2019								2018
At December 31 (Dollars in Millions)	Shares Issued and Outstanding		Liquidation Preference		Discount		Carrying Amount		Shares Issued and Outstanding		Liquidation Preference		Discount		Carrying Amount
Series A		12,510	$	1,251	$	145	$	1,106		12,510	$	1,251	$	145	$	1,106
Series B		40,000		1,000		–		1,000		40,000		1,000		–		1,000
Series F		44,000		1,100		12		1,088		44,000		1,100		12		1,088
Series H		20,000		500		13		487		20,000		500		13		487
Series I		30,000		750		5		745		30,000		750		5		745
Series J		40,000		1,000		7		993		40,000		1,000		7		993
Series K		23,000		575		10		565		23,000		575		10		565
Total preferred stock(a)		209,510	$	6,176	$	192	$	5,984		209,510	$	6,176	$	192	$	5,984

(a) The par value of all shares issued and outstanding at December 31, 2019 and 2018, was $1.00 per share.

During 2018, the Company issued depositary shares representing an ownership interest in 23,000 shares of Series K Non-Cumulative Perpetual Preferred Stock with a liquidation preference of $25,000 per share (the “Series K Preferred Stock”). The Series K Preferred Stock has no stated maturity and will not be subject to any sinking fund or other obligation of the Company. Dividends, if declared, will accrue and be payable quarterly, in arrears, at a rate per annum equal to 5.50 percent. The Series K Preferred Stock is redeemable at the Company’s option, in whole or in part, on or after October 15, 2023. The Series K Preferred Stock is redeemable at the Company’s option, in whole, but not in part, prior to October 15, 2023 within 90 days following an official administrative or judicial decision, amendment to, or change in the laws or regulations that would not allow the Company to treat the full liquidation value of the Series K Preferred Stock as Tier 1 capital for purposes of the capital adequacy guidelines of the Federal Reserve Board.

During 2017, the Company issued depositary shares representing an ownership interest in 40,000 shares of Series J Non-Cumulative Perpetual Preferred Stock with a liquidation preference of $25,000 per share (the “Series J Preferred Stock”). The Series J Preferred Stock has no stated maturity and will not be subject to any sinking fund or other obligation of the Company. Dividends, if declared, will accrue and be payable semiannually, in arrears, at a rate per annum equal to 5.300 percent from the date of issuance to, but excluding, April 15, 2027, and thereafter will accrue and be payable quarterly at a floating rate per annum equal to the three-month London Interbank Offered Rate (“LIBOR”) plus 2.914 percent. The Series J Preferred Stock is redeemable at the Company’s option, in whole or in part, on or after April 15, 2027. The Series J Preferred Stock is redeemable at the Company’s option, in whole, but not in part, prior to April 15, 2027 within 90 days following an official administrative or judicial decision, amendment to, or change in the laws or regulations that would not allow the

Company to treat the full liquidation value of the Series J Preferred Stock as Tier 1 capital for purposes of the capital adequacy guidelines of the Federal Reserve Board.

During 2015, the Company issued depositary shares representing an ownership interest in 30,000 shares of Series I Non-Cumulative Perpetual Preferred Stock with a liquidation preference of $25,000 per share (the “Series I Preferred Stock”). The Series I Preferred Stock has no stated maturity and will not be subject to any sinking fund or other obligation of the Company. Dividends, if declared, will accrue and be payable semiannually, in arrears, at a rate per annum equal to 5.125 percent from the date of issuance to, but excluding, January 15, 2021, and thereafter will accrue and be payable quarterly at a floating rate per annum equal to three-month LIBOR plus 3.486 percent. The Series I Preferred Stock is redeemable at the Company’s option, in whole or in part, on or after January 15, 2021. The Series I Preferred Stock is redeemable at the Company’s option, in whole, but not in part, prior to January 15, 2021 within 90 days following an official administrative or judicial decision, amendment to, or change in the laws or regulations that would not allow the Company to treat the full liquidation value of the Series I Preferred Stock as Tier 1 capital for purposes of the capital adequacy guidelines of the Federal Reserve Board.

During 2013, the Company issued depositary shares representing an ownership interest in 20,000 shares of Series H Non-Cumulative Perpetual Preferred Stock with a liquidation preference of $25,000 per share (the “Series H Preferred Stock”). The Series H Preferred Stock has no stated maturity and will not be subject to any sinking fund or other obligation of the Company. Dividends, if declared, will accrue and be payable quarterly, in arrears, at a rate per annum equal to 5.15 percent. The Series H Preferred Stock is redeemable at the Company’s option, subject to the prior approval of the Federal Reserve Board.

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During 2012, the Company issued depositary shares representing an ownership interest in 44,000 shares of Series F Non-Cumulative Perpetual Preferred Stock with a liquidation preference of $25,000 per share (the “Series F Preferred Stock”). The Series F Preferred Stock has no stated maturity and will not be subject to any sinking fund or other obligation of the Company. Dividends, if declared, will accrue and be payable quarterly, in arrears, at a rate per annum equal to 6.50 percent from the date of issuance to, but excluding, January 15, 2022, and thereafter at a floating rate per annum equal to three-month LIBOR plus 4.468 percent. The Series F Preferred Stock is redeemable at the Company’s option, in whole or in part, on or after January 15, 2022. The Series F Preferred Stock is redeemable at the Company’s option, in whole, but not in part, prior to January 15, 2022 within 90 days following an official administrative or judicial decision, amendment to, or change in the laws or regulations that would not allow the Company to treat the full liquidation value of the Series F Preferred Stock as Tier 1 capital for purposes of the capital adequacy guidelines of the Federal Reserve Board. 

During 2010, the Company issued depositary shares representing an ownership interest in 5,746 shares of Series A Non-Cumulative Perpetual Preferred Stock (the “Series A Preferred Stock”) to investors, in exchange for their portion of USB Capital IX Income Trust Securities. During 2011, the Company issued depositary shares representing an ownership interest in 6,764 shares of Series A Preferred Stock to USB Capital IX, thereby settling the stock purchase contract established between the Company and USB Capital IX as part of the 2006 issuance of USB Capital IX Income Trust Securities. The preferred shares were issued to USB Capital IX for the purchase price specified in the stock forward purchase contract. The Series A Preferred Stock has a liquidation preference of $100,000 per share, no stated maturity and will not be subject to any sinking fund or other obligation of the Company. Dividends, if

declared, will accrue and be payable quarterly, in arrears, at a rate per annum equal to the greater of three-month LIBOR plus 1.02 percent or 3.50 percent. The Series A Preferred Stock is redeemable at the Company’s option, subject to prior approval by the Federal Reserve Board.

During 2006, the Company issued depositary shares representing an ownership interest in 40,000 shares of Series B Non-Cumulative Perpetual Preferred Stock with a liquidation preference of $25,000 per share (the “Series B Preferred Stock”). The Series B Preferred Stock has no stated maturity and will not be subject to any sinking fund or other obligation of the Company. Dividends, if declared, will accrue and be payable quarterly, in arrears, at a rate per annum equal to the greater of three-month LIBOR plus .60 percent, or 3.50 percent. The Series B Preferred Stock is redeemable at the Company’s option, subject to the prior approval of the Federal Reserve Board.

Dividends for certain of the Company’s outstanding series of preferred stock described above are, or will in the future be, calculated by reference to LIBOR. The outstanding series contain fallback provisions in the event that LIBOR is no longer published or quoted, but these fallback provisions have not yet been utilized.

During 2019, 2018 and 2017, the Company repurchased shares of its common stock under various authorizations approved by its Board of Directors. As of December 31, 2019, the approximate dollar value of shares that may yet be purchased by the Company under the current Board of Directors approved authorization was $2.4 billion.

The following table summarizes the Company’s common stock repurchased in each of the last three years:

(Dollars and Shares in Millions)	Shares		Value
2019		81	$	4,515
2018		54		2,844
2017		49		2,622

104    

Shareholders’ equity is affected by transactions and valuations of asset and liability positions that require adjustments to accumulated other comprehensive income (loss). The reconciliation of the transactions affecting accumulated other comprehensive income (loss) included in shareholders’ equity for the years ended December 31, is as follows:

(Dollars in Millions)	Unrealized Gains (Losses) on Investment Securities Available-For-Sale			Unrealized Gains (Losses) on Investment Securities Transferred From Available-For-Sale to Held-To-Maturity			Unrealized Gains (Losses) on Derivative Hedges			Unrealized Gains (Losses) on Retirement Plans			Foreign Currency Translation			Total
2019
Balance at beginning of period	$	(946	)	$	14		$	112		$	(1,418	)	$	(84	)	$	(2,322	)
Changes in unrealized gains and losses		1,693			–			(229	)		(380	)		–			1,084
Unrealized gains and losses on held-to-maturity investment securities transferred to available-for-sale		150			(9	)		–			–			–			141
Foreign currency translation adjustment(a)		–			–			–			–			26			26
Reclassification to earnings of realized gains and losses		(73	)		(7	)		11			89			–			20
Applicable income taxes		(445	)		2			55			73			(7	)		(322	)
Balance at end of period	$	379		$	–		$	(51	)	$	(1,636	)	$	(65	)	$	(1,373	)
2018
Balance at beginning of period	$	(357	)	$	17		$	71		$	(1,066	)	$	(69	)	$	(1,404	)
Revaluation of tax related balances(b)		(77	)		4			15			(229	)		(13	)		(300	)
Changes in unrealized gains and losses		(656	)		–			39			(302	)		–			(919	)
Foreign currency translation adjustment(a)		–			–			–			–			3			3
Reclassification to earnings of realized gains and losses		(30	)		(9	)		(5	)		137			–			93
Applicable income taxes		174			2			(8	)		42			(5	)		205
Balance at end of period	$	(946	)	$	14		$	112		$	(1,418	)	$	(84	)	$	(2,322	)
2017
Balance at beginning of period	$	(431	)	$	25		$	55		$	(1,113	)	$	(71	)	$	(1,535	)
Changes in unrealized gains and losses		178			–			(5	)		(41	)		–			132
Foreign currency translation adjustment(a)		–			–			–			–			(2	)		(2	)
Reclassification to earnings of realized gains and losses		(57	)		(13	)		30			117			–			77
Applicable income taxes		(47	)		5			(9	)		(29	)		4			(76	)
Balance at end of period	$	(357	)	$	17		$	71		$	(1,066	)	$	(69	)	$	(1,404	)

(a) Represents the impact of changes in foreign currency exchange rates on the Company’s investment in foreign operations and related hedges.

(b) Reflects the adoption of new accounting guidance on January 1, 2018 to reclassify the impact of the reduced federal statutory rate for corporations included in 2017 tax reform legislation from accumulated other comprehensive income to retained earnings.

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Additional detail about the impact to net income for items reclassified out of accumulated other comprehensive income (loss) and into earnings for the years ended December 31, is as follows:

	Impact to Net Income									Affected Line Item in the Consolidated Statement of Income
(Dollars in Millions)	2019			2018			2017
Unrealized gains (losses) on investment securities available-for-sale
Realized gains (losses) on sale of investment securities	$	73		$	30		$	57		Total securities gains (losses), net
		(18	)		(7	)		(22	)	Applicable income taxes
		55			23			35		Net-of-tax
Unrealized gains (losses) on investment securities transferred from available-for-sale to held-to-maturity
Amortization of unrealized gains		7			9			13		Interest income
		(2	)		(2	)		(5	)	Applicable income taxes
		5			7			8		Net-of-tax
Unrealized gains (losses) on derivative hedges
Realized gains (losses) on derivative hedges		(11	)		5			(30	)	Interest expense
		3			(2	)		11		Applicable income taxes
		(8	)		3			(19	)	Net-of-tax
Unrealized gains (losses) on retirement plans
Actuarial gains (losses) and prior service cost (credit) amortization		(89	)		(137	)		(117	)	Other noninterest expense
		22			35			45		Applicable income taxes
		(67	)		(102	)		(72	)	Net-of-tax
Total impact to net income	$	(15	)	$	(69	)	$	(48	)

Regulatory Capital The Company uses certain measures defined by bank regulatory agencies to assess its capital. The regulatory capital requirements effective for the Company follow Basel III, which includes two comprehensive methodologies for calculating risk-weighted assets: a general standardized approach and more risk-sensitive advanced approaches. Effective December 31, 2019, the Company is no longer subject to calculating its capital adequacy as a percentage of risk-weighted assets under advanced approaches. Prior to December 31, 2019, the Company’s capital adequacy was evaluated against the methodology that was most restrictive.

Tier 1 capital is considered core capital and includes common shareholders’ equity adjusted for the aggregate impact of certain items included in other comprehensive income (loss) (“common equity tier 1 capital”), plus qualifying preferred stock, trust

preferred securities and noncontrolling interests in consolidated subsidiaries subject to certain limitations. Total risk-based capital includes Tier 1 capital and other items such as subordinated debt and the allowance for credit losses. Capital measures are stated as a percentage of risk-weighted assets, which are measured based on their perceived credit and operational risks and include certain off-balance sheet exposures, such as unfunded loan commitments, letters of credit, and derivative contracts. As of December 31, 2019, the Company is subject to leverage ratio requirements under each methodology, which is defined as Tier 1 capital as a percentage of adjusted average assets under the standardized approach and Tier 1 capital as a percentage of total on- and off-balance sheet leverage exposure under the advanced approaches.

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The following tables provide a summary of the regulatory capital requirements in effect, along with the actual components and ratios  for the Company and its bank subsidiary, at December 31, 2019 and 2018:

	U.S. Bancorp						U.S. Bank National Association
(Dollars in Millions)	2019			2018			2019			2018
Basel III standardized approach:
Common shareholders’ equity	$	45,869		$	45,045		$	48,592		$	47,728
Less intangible assets
Goodwill (net of deferred tax liability)		(8,788	)		(8,549	)		(8,806	)		(8,566	)
Other disallowed intangible assets		(677	)		(601	)		(710	)		(732	)
Other(a)		(691	)		(1,171	)		38			(112	)
Total common equity tier 1 capital		35,713			34,724			39,114			38,318
Qualifying preferred stock		5,984			5,984			–			–
Noncontrolling interests eligible for tier 1 capital		28			36			28			36
Other(b)		(4	)		(3	)		(4	)		(3	)
Total tier 1 capital		41,721			40,741			39,138			38,351
Eligible portion of allowance for credit losses		4,491			4,441			4,491			4,441
Subordinated debt and noncontrolling interests eligible for tier 2 capital		3,532			2,996			3,365			3,168
Total tier 2 capital		8,023			7,437			7,856			7,609
Total risk-based capital	$	49,744		$	48,178		$	46,994		$	45,960
Risk-weighted assets	$	391,269		$	381,661		$	383,560		$	374,299
Common equity tier 1 capital as a percent of risk-weighted assets		9.1	%		9.1	%		10.2	%		10.2	%
Tier 1 capital as a percent of risk-weighted assets		10.7			10.7			10.2			10.2
Total risk-based capital as a percent of risk-weighted assets		12.7			12.6			12.3			12.3
Tier 1 capital as a percent of adjusted quarterly average assets (leverage ratio)		8.8			9.0			8.4			8.6
Basel III advanced approaches(c):
Common shareholders’ equity				$	45,045					$	47,728
Less intangible assets
Goodwill (net of deferred tax liability)					(8,549	)					(8,566	)
Other disallowed intangible assets					(601	)					(732	)
Other(a)					(1,171	)					(112	)
Total common equity tier 1 capital					34,724						38,318
Qualifying preferred stock					5,984						–
Noncontrolling interests eligible for tier 1 capital					36						36
Other(b)					(3	)					(3	)
Total tier 1 capital					40,741						38,351
Eligible portion of allowance for credit losses					1,399						1,364
Subordinated debt and noncontrolling interests eligible for tier 2 capital					2,996						3,168
Total tier 2 capital					4,395						4,532
Total risk-based capital				$	45,136					$	42,883
Risk-weighted assets				$	295,002					$	287,897
Common equity tier 1 capital as a percent of risk-weighted assets					11.8	%					13.3	%
Tier 1 capital as a percent of risk-weighted assets					13.8						13.3
Total risk-based capital as a percent of risk-weighted assets					15.3						14.9
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure (total leverage exposure ratio)		7.0	%		7.2			6.7	%		6.9

(a) Includes the impact of items included in other comprehensive income (loss), such as unrealized gains (losses) on available-for-sale securities, accumulated net gains on cash flow hedges, pension liability adjustments, etc., and the portion of deferred tax assets related to net operating loss and tax credit carryforwards not eligible for common equity tier 1 capital.

(b) Includes the remaining portion of deferred tax assets not eligible for total tier 1 capital.

(c) Effective December 31, 2019, the Company is no longer subject to calculating its, or its bank subsidiary’s, capital adequacy as a percentage of risk-weighted assets under advanced approaches.

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	Minimum(a)			Well- Capitalized
Bank Regulatory Capital Requirements
2019
Common equity tier 1 capital as a percent of risk-weighted assets		7.000	%		6.500	%
Tier 1 capital as a percent of risk-weighted assets		8.500			8.000
Total risk-based capital as a percent of risk-weighted assets		10.500			10.000
Tier 1 capital as a percent of adjusted quarterly average assets (leverage ratio)		4.000			5.000
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure (total leverage exposure ratio)		3.000			3.000
2018
Common equity tier 1 capital as a percent of risk-weighted assets		6.375	%		6.500	%
Tier 1 capital as a percent of risk-weighted assets		7.875			8.000
Total risk-based capital as a percent of risk-weighted assets		9.875			10.000
Tier 1 capital as a percent of adjusted quarterly average assets (leverage ratio)		4.000			5.000
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure (total leverage exposure ratio)		3.000			3.000

(a) The minimum common equity tier 1 capital, tier 1 capital and total risk-based capital ratio requirements reflect a capital conservation buffer requirement of 2.5 percent and 1.875 percent for 2019 and 2018, respectively. Banks and financial services holding companies must maintain minimum capital levels, including a capital conservation buffer requirement, to avoid limitations on capital distributions and certain discretionary compensation payments.

Noncontrolling interests principally represent third-party investors’ interests in consolidated entities, including preferred stock of consolidated subsidiaries. During 2006, the Company’s banking subsidiary formed USB Realty Corp., a real estate investment trust, for the purpose of issuing 5,000 shares of Fixed-to-Floating Rate Exchangeable Non-cumulative Perpetual Series A Preferred Stock with a liquidation preference of $100,000 per share (“Series A Preferred Securities”) to third-party investors. Dividends on the Series A Preferred Securities, if declared, will accrue and be payable quarterly, in arrears, at a rate per annum equal to three-month LIBOR plus 1.147 percent. If USB Realty Corp. has not declared a dividend on the Series A Preferred Securities before the dividend payment date for any 

dividend period, such dividend shall not be cumulative and shall cease to accrue and be payable, and USB Realty Corp. will have no obligation to pay dividends accrued for such dividend period, whether or not dividends on the Series A Preferred Securities are declared for any future dividend period.

The Series A Preferred Securities will be redeemable, in whole or in part, at the option of USB Realty Corp. on each fifth anniversary after the dividend payment date occurring in January 2012. Any redemption will be subject to the approval of the Office of the Comptroller of the Currency. During 2016, the Company purchased 500 shares of the Series A Preferred Securities held by third-party investors. As of December 31, 2019, 4,500 shares of the Series A Preferred Securities remain outstanding.

  NOTE 15   Earnings Per Share

The components of earnings per share were:

Year Ended December 31 (Dollars and Shares in Millions, Except Per Share Data)	2019			2018			2017
Net income attributable to U.S. Bancorp	$	6,914		$	7,096		$	6,218
Preferred dividends		(302	)		(282	)		(267	)
Impact of preferred stock redemption(a)		–			–			(10	)
Earnings allocated to participating stock awards		(29	)		(30	)		(28	)
Net income applicable to U.S. Bancorp common shareholders	$	6,583		$	6,784		$	5,913
Average common shares outstanding		1,581			1,634			1,677
Net effect of the exercise and assumed purchase of stock awards		2			4			6
Average diluted common shares outstanding		1,583			1,638			1,683
Earnings per common share	$	4.16		$	4.15		$	3.53
Diluted earnings per common share	$	4.16		$	4.14		$	3.51

(a) Represents stock issuance costs originally recorded in preferred stock upon the issuance of the Company’s Series G Preferred Stock that were reclassified to retained earnings on the date the Company announced its intent to redeem the outstanding shares.

Options outstanding at December 31, 2019, 2018 and 2017, to purchase 1 million common shares, were not included in the computation of diluted earnings per share for the years ended December 31, 2019, 2018 and 2017, because they were antidilutive.

108    

  NOTE 16 Employee Benefits

Employee Retirement Savings Plan The Company has a defined contribution retirement savings plan that covers substantially all its employees. Qualified employees are allowed to contribute up to 75 percent of their annual compensation, subject to Internal Revenue Service limits, through salary deductions under Section 401(k) of the Internal Revenue Code. Employee contributions are invested at their direction among a variety of investment alternatives. Employee contributions are 100 percent matched by the Company, up to four percent of each employee’s eligible annual compensation. The Company’s matching contribution vests immediately and is invested in the same manner as each employee’s future contribution elections. Total expense for the Company’s matching contributions was $179 million, $171 million and $156 million in 2019, 2018 and 2017, respectively.

Pension Plans The Company has a tax qualified noncontributory defined benefit pension plan that provides benefits to substantially all its employees. Participants receive annual cash balance pay credits based on eligible pay multiplied by a percentage determined by their age and years of service. Participants also receive an annual interest credit. Employees become vested upon completing three years of vesting service. For participants in the plan before 2010 that elected to stay under their existing formula, pension benefits are provided to eligible employees based on years of service, multiplied by a percentage of their final average pay. Additionally, as a result of plan mergers, a portion of pension benefits may also be provided using a cash balance benefit formula where only interest credits continue to be credited to participants’ accounts.

In general, the Company’s qualified pension plan’s funding objectives include maintaining a funded status sufficient to meet participant benefit obligations over time while reducing long-term funding requirements and pension costs. The Company has an established process for evaluating the plan, its performance and significant plan assumptions, including the assumed discount rate and the long-term rate of return (“LTROR”). Annually, the

Company’s Compensation and Human Resources Committee (the “Committee”), assisted by outside consultants, evaluates plan objectives, funding policies and plan investment policies considering its long-term investment time horizon and asset allocation strategies. The process also evaluates significant plan assumptions. Although plan assumptions are established annually, the Company may update its analysis on an interim basis in order to be responsive to significant events that occur during the year, such as plan mergers and amendments.

The Company’s funding policy is to contribute amounts to its plan sufficient to meet the minimum funding requirements of the Employee Retirement Income Security Act of 1974, as amended by the Pension Protection Act, plus such additional amounts as the Company determines to be appropriate. The Company did not contribute to its qualified pension plan in 2019 and 2018. The Company expects to contribute approximately $125 million to the plan in 2020. Any contributions made to the qualified plan are invested in accordance with established investment policies and asset allocation strategies.

In addition to the funded qualified pension plan, the Company maintains a non-qualified plan that is unfunded and provides benefits to certain employees. The assumptions used in computing the accumulated benefit obligation, the projected benefit obligation and net pension expense are substantially consistent with those assumptions used for the funded qualified plan. In 2020, the Company expects to contribute approximately $25 million to its non-qualified pension plan which equals the 2020 expected benefit payments.

Postretirement Welfare Plan In addition to providing pension benefits, the Company provides health care and death benefits to certain former employees who retired prior to January 1, 2014. Employees retiring after December 31, 2013, are not eligible for retiree health care benefits. The Company expects to contribute approximately $4 million to its postretirement welfare plan in 2020.

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The following table summarizes the changes in benefit obligations and plan assets for the years ended December 31, and the funded status and amounts recognized in the Consolidated Balance Sheet at December 31 for the retirement plans:

	Pension Plans						Postretirement Welfare Plan
(Dollars in Millions)	2019			2018			2019			2018
Change In Projected Benefit Obligation(a)
Benefit obligation at beginning of measurement period	$	5,507		$	5,720		$	54		$	68
Service cost		192			208			–			–
Interest cost		249			224			2			2
Participants’ contributions		–			–			7			8
Actuarial loss (gain)		1,100			(440	)		(4	)		(7	)
Lump sum settlements		(56	)		(50	)		–			–
Benefit payments		(163	)		(155	)		(13	)		(18	)
Federal subsidy on benefits paid		–			–			1			1
Benefit obligation at end of measurement period(b)	$	6,829		$	5,507		$	47		$	54
Change In Fair Value Of Plan Assets(c)
Fair value at beginning of measurement period	$	4,936		$	5,482		$	81		$	87
Actual return on plan assets		1,095			(365	)		6			–
Employer contributions		26			24			4			5
Participants’ contributions		–			–			6			7
Lump sum settlements		(56	)		(50	)		–			–
Benefit payments		(163	)		(155	)		(13	)		(18	)
Fair value at end of measurement period	$	5,838		$	4,936		$	84		$	81
Funded (Unfunded) Status	$	(991	)	$	(571	)	$	37		$	27
Components Of The Consolidated Balance Sheet
Noncurrent benefit asset	$	–		$	–		$	37		$	27
Current benefit liability		(25	)		(23	)		–			–
Noncurrent benefit liability		(966	)		(548	)		–			–
Recognized amount	$	(991	)	$	(571	)	$	37		$	27
Accumulated Other Comprehensive Income (Loss), Pretax
Net actuarial gain (loss)	$	(2,271	)	$	(1,981	)	$	68		$	66
Net prior service credit (cost)		–			–			14			18
Recognized amount	$	(2,271	)	$	(1,981	)	$	82		$	84

(a) The increase and the decrease in the projected benefit obligation for 2019 and 2018, respectively, were primarily due to discount rate changes.

(b) At December 31, 2019 and 2018, the accumulated benefit obligation for all pension plans was $6.2 billion and $5.0 billion.

(c) The increase and the decrease in the fair value of plan assets for 2019 and 2018, respectively, were primary due to market conditions.

The following table provides information for pension plans with benefit obligations in excess of plan assets at December 31:

(Dollars in Millions)	2019		2018
Pension Plans with Projected Benefit Obligations in Excess of Plan Assets
Projected benefit obligation	$	6,829	$	5,507
Fair value of plan assets		5,838		4,936
Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets
Accumulated benefit obligation	$	553	$	467
Fair value of plan assets		–		–

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The following table sets forth the components of net periodic benefit cost and other amounts recognized in accumulated other comprehensive income (loss) for the years ended December 31 for the retirement plans:

	Pension Plans									Postretirement Welfare Plan
(Dollars in Millions)	2019			2018			2017			2019			2018			2017
Components Of Net Periodic Benefit Cost
Service cost	$	192		$	208		$	187		$	–		$	–		$	–
Interest cost		249			224			220			2			2			2
Expected return on plan assets		(383	)		(379	)		(284	)		(3	)		(3	)		(3	)
Prior service cost (credit) and transition obligation (asset) amortization		–			–			(2	)		(3	)		(3	)		(3	)
Actuarial loss (gain) amortization		98			146			127			(6	)		(6	)		(5	)
Net periodic benefit cost	$	156		$	199		$	248		$	(10	)	$	(10	)	$	(9	)
Other Changes In Plan Assets And Benefit Obligations
Recognized In Other Comprehensive Income (Loss)
Net actuarial gain (loss) arising during the year	$	(388	)	$	(305	)	$	(48	)	$	7		$	3		$	7
Net actuarial loss (gain) amortized during the year		98			146			127			(6	)		(6	)		(5	)
Net prior service cost (credit) and transition obligation (asset) amortized during the year		–			–			(2	)		(3	)		(3	)		(3	)
Total recognized in other comprehensive income (loss)	$	(290	)	$	(159	)	$	77		$	(2	)	$	(6	)	$	(1	)
Total recognized in net periodic benefit cost and other comprehensive income (loss)	$	(446	)	$	(358	)	$	(171	)	$	8		$	4		$	8

The following table sets forth weighted-average assumptions used to determine the projected benefit obligations at December 31:

	Pension Plans						Postretirement Welfare Plan
(Dollars in Millions)	2019			2018			2019			2018
Discount rate(a)		3.40	%		4.45	%		2.80	%		4.05	%
Cash balance interest crediting rate		3.00			3.00			*			*
Rate of compensation increase(b)		3.56			3.52			*			*
Health care cost trend rate(c)
Prior to age 65								6.25	%		6.50	%
After age 65								6.25	%		10.00	%

(a) The discount rates were developed using a cash flow matching bond model with a modified duration for the qualified pension plan, non-qualified pension plan and postretirement welfare plan of 15.8, 12.3, and 6.1 years, respectively, for 2019, and 14.7, 11.5 and 5.9 years, respectively, for 2018.

(b) Determined on an active liability-weighted basis.

(c) The 2019 and 2018 pre-65 and post-65 rates are both assumed to decrease gradually to 5.00 percent by 2025 and remain at this level thereafter.

* Not applicable

The following table sets forth weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:

	Pension Plans									Postretirement Welfare Plan
(Dollars in Millions)	2019			2018			2017			2019			2018			2017
Discount rate(a)		4.45	%		3.84	%		4.27	%		4.05	%		3.34	%		3.57	%
Cash balance interest crediting rate		3.00			3.00			3.00			*			*			*
Expected return on plan assets(b)		7.25			7.25			7.25			3.50			3.50			3.50
Rate of compensation increase(c)		3.52			3.56			3.58			*			*			*
Health care cost trend rate(d)
Prior to age 65											6.50	%		6.75	%		7.00	%
After age 65											10.00			6.75			7.00

(a) The discount rates were developed using a cash flow matching bond model with a modified duration for the qualified pension plan, non-qualified pension plan and postretirement welfare plan of 14.7, 11.5, and 5.9 years, respectively, for 2019, and 15.8, 12.3 and 6.1 years, respectively, for 2018.

(b) With the help of an independent pension consultant, the Company considers several sources when developing its expected long-term rates of return on plan assets assumptions, including, but not limited to, past returns and estimates of future returns given the plans’ asset allocation, economic conditions, and peer group LTROR information. The Company determines its expected long-term rates of return reflecting current economic conditions and plan assets.

(c) Determined on an active liability weighted basis.

(d) The 2019, 2018 and 2017 pre-65 and post-65 rates are both assumed to decrease gradually to 5.00 percent by 2025 and remain at that level thereafter.

* Not applicable

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Investment Policies and Asset Allocation In establishing its investment policies and asset allocation strategies, the Company considers expected returns and the volatility associated with different strategies. An independent consultant performs modeling that projects numerous outcomes using a broad range of possible scenarios, including a mix of possible rates of inflation and economic growth. Starting with current economic information, the model bases its projections on past relationships between inflation, fixed income rates and equity returns when these types of economic conditions have existed over the previous 30 years, both in the United States and in foreign countries. Estimated future returns and other actuarially determined adjustments are also considered in calculating the estimated return on assets.

Generally, based on historical performance of the various investment asset classes, investments in equities have outperformed other investment classes but are subject to higher volatility. In an effort to minimize volatility, while recognizing the long-term up-side potential of investing in equities, the Committee has determined that a target asset allocation of 35 percent long duration bonds, 30 percent global equities, 10 percent real estate equities, 10 percent private equity funds, 5 percent domestic mid-small cap equities, 5 percent emerging markets equities, and 5 percent hedge funds is appropriate.

At December 31, 2019 and 2018, plan assets included an asset management arrangement with a related party totaling $57 million and $52 million, respectively.

In accordance with authoritative accounting guidance, the Company groups plan assets into a three-level hierarchy for valuation techniques used to measure their fair value based on whether the valuation inputs are observable or unobservable. Refer to Note 21 for further discussion on these levels.

The assets of the qualified pension plan include investments in equity and U.S. Treasury securities whose fair values are determined based on quoted prices in active markets and are classified within Level 1 of the fair value hierarchy. The qualified pension plan also invests in U.S. agency, corporate and municipal debt securities, which are all valued based on observable market prices or data by third-party pricing services, and mutual funds which are valued based on quoted net asset values provided by the trustee of the fund; these assets are classified as Level 2. Additionally, the qualified pension plan invests in certain assets that are valued based on net asset values as a practical expedient, including investments in collective investment funds, hedge funds, and private equity funds; the net asset values are provided by the fund trustee or administrator and are not classified in the fair value hierarchy.

The following table summarizes plan investment assets measured at fair value at December 31:

	Qualified Pension Plan																Postretirement Welfare Plan
	2019								2018								2019		2018
(Dollars in Millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total		Level 1		Level 1
Cash and cash equivalents	$	58	$	–	$	–	$	58	$	54	$	–	$	–	$	54	$	40	$	42
Debt securities		727		1,073		–		1,800		631		904		–		1,535		–		–
Corporate stock
Real estate equity securities(a)		–		–		–		–		109		–		–		109		–		–
Mutual funds
Debt securities		–		304		–		304		–		295		–		295		–		–
Emerging markets equity securities		–		136		–		136		–		113		–		113		–		–
Other		–		–		3		3		–		–		3		3		–		–
	$	785	$	1,513	$	3		2,301	$	794	$	1,312	$	3		2,109		40		42
Plan investment assets not classified in fair value hierarchy(b):
Collective investment funds
Domestic equity securities								1,328								1,183		27		24
Mid-small cap equity securities(c)								323								340		–		–
International equity securities								752								643		17		15
Real estate securities								547								146		–		–
Hedge funds(d)								283								290		–		–
Private equity funds(e)								304								225		–		–
Total plan investment assets at fair value							$	5,838							$	4,936	$	84	$	81

(a) At December 31, 2018, securities included $56 million in domestic equities and $53 million in international equities.

(b) These investments are valued based on net asset value per share as a practical expedient; fair values are provided to reconcile to total investment assets of the plans at fair value.

(c) At December 31, 2019 and 2018, securities included $323 million and $340 million in domestic equities, respectively.

(d) This category consists of several investment strategies diversified across several hedge fund managers.

(e) This category consists of several investment strategies diversified across several private equity fund managers.

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The following table summarizes the changes in fair value for qualified pension plan investment assets measured at fair value using significant unobservable inputs (Level 3) for the years ended December 31:

	2019		2018		2017
(Dollars in Millions)	Other		Other		Other
Balance at beginning of period	$	3	$	2	$	1
Unrealized gains (losses) relating to assets still held at end of year		–		–		–
Purchases, sales, and settlements, net		–		1		1
Balance at end of period	$	3	$	3	$	2

The following benefit payments are expected to be paid from the retirement plans for the years ended December 31:

(Dollars in Millions)	Pension Plans		Postretirement Welfare Plan(a)		Medicare Part D Subsidy Receipts
2020	$	233	$	7	$	1
2021		254		6		1
2022		267		6		1
2023		294		6		1
2024		306		5		1
2025-2029		1,811		19		2

(a) Net of expected retiree contributions and before Medicare Part D subsidy.

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  NOTE 17   Stock-Based Compensation

As part of its employee and director compensation programs, the Company currently may grant certain stock awards under the provisions of its stock incentive plan. The plan provides for grants of options to purchase shares of common stock at a fixed price equal to the fair value of the underlying stock at the date of grant. Option grants are generally exercisable up to ten years from the date of grant. In addition, the plan provides for grants of shares of common stock or stock units that are subject to restriction on transfer prior to vesting. Most stock and unit awards vest over

three to five years and are subject to forfeiture if certain vesting requirements are not met. Stock incentive plans of acquired companies are generally terminated at the merger closing dates. Participants under such plans receive the Company’s common stock, or options to buy the Company’s common stock, based on the conversion terms of the various merger agreements. At December 31, 2019, there were 32 million shares (subject to adjustment for forfeitures) available for grant under the Company’s stock incentive plan.

Stock Option Awards

The following is a summary of stock options outstanding and exercised under prior and existing stock incentive plans of the Company:

Year Ended December 31	Stock Options/Shares			Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value (in millions)
2019
Number outstanding at beginning of period		9,115,010		$	34.52
Granted(a)		—			—
Exercised		(3,333,467	)		26.36
Cancelled(b)		(63,287	)		36.74
Number outstanding at end of period(c)		5,718,256		$	39.25		4.4	$	115
Exercisable at end of period		4,869,805		$	37.67		4.0	$	105
2018
Number outstanding at beginning of period		12,668,467		$	32.15
Granted(a)		—			—
Exercised		(3,443,494	)		25.41
Cancelled(b)		(109,963	)		46.72
Number outstanding at end of period(c)		9,115,010		$	34.52		4.3	$	102
Exercisable at end of period		7,372,036		$	31.61		3.5	$	104
2017
Number outstanding at beginning of period		17,059,241		$	29.95
Granted		1,066,188			54.97
Exercised		(5,389,741	)		29.58
Cancelled(b)		(67,221	)		43.31
Number outstanding at end of period(c)		12,668,467		$	32.15		4.5	$	272
Exercisable at end of period		9,647,937		$	27.87		3.3	$	248

(a) The Company did not grant any stock option awards during 2019 and 2018.

(b) Options cancelled include both non-vested (i.e., forfeitures) and vested options.

(c) Outstanding options include stock-based awards that may be forfeited in future periods. The impact of the estimated forfeitures is reflected in compensation expense.

Stock-based compensation expense is based on the estimated fair value of the award at the date of grant or modification. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model, requiring the use of subjective assumptions. Because employee stock options have characteristics that differ from those of traded options, including vesting provisions and trading limitations that impact

their liquidity, the determined value used to measure compensation expense may vary from the actual fair value of the employee stock options. The following table includes the weighted-average estimated fair value of stock options granted and the assumptions utilized by the Company for newly issued grants for the year ended December 31, 2017:

Year Ended December 31	2017
Estimated fair value	$	14.66
Risk-free interest rates		2.0	%
Dividend yield		2.6	%
Stock volatility factor		.35
Expected life of options (in years)		5.5

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Expected stock volatility is based on several factors including the historical volatility of the Company’s common stock, implied volatility determined from traded options and other factors. The Company uses historical data to estimate option exercises and employee terminations to estimate the expected life of options.

The risk-free interest rate for the expected life of the options is based on the U.S. Treasury yield curve in effect on the date of grant. The expected dividend yield is based on the Company’s expected dividend yield over the life of the options.    

The following summarizes certain stock option activity of the Company:

Year Ended December 31 (Dollars in Millions)	2019		2018		2017
Fair value of options vested	$	10	$	14	$	13
Intrinsic value of options exercised		95		97		127
Cash received from options exercised		88		87		159
Tax benefit realized from options exercised		24		24		49

To satisfy option exercises, the Company predominantly uses treasury stock.

Additional information regarding stock options outstanding as of December 31, 2019, is as follows:

	Outstanding Options						Exercisable Options
Range of Exercise Prices	Shares		Weighted- Average Remaining Contractual Life (Years)		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price
$23.36—$25.00		236,661		.2	$	23.82		236,661	$	23.82
$25.01—$30.00		1,277,726		1.8		28.65		1,277,726		28.65
$30.01—$35.00		537,881		3.1		33.98		537,881		33.98
$35.01—$40.00		1,251,397		6.1		39.49		885,968		39.49
$40.01—$45.00		1,454,651		4.7		42.42		1,454,068		42.43
$45.01—$50.00		—		—		—		—		—
$50.01—$55.01		959,940		7.1		54.97		477,501		54.97
		5,718,256		4.4	$	39.25		4,869,805	$	37.67

Restricted Stock and Unit Awards

A summary of the status of the Company’s restricted shares of stock and unit awards is presented below:

	2019					2018					2017
Year Ended December 31	Shares			Weighted- Average Grant- Date Fair Value		Shares			Weighted- Average Grant- Date Fair Value		Shares			Weighted- Average Grant- Date Fair Value
Outstanding at beginning of period		6,719,298		$	48.17		7,446,955		$	44.49		8,265,507		$	39.50
Granted		3,519,474			50.45		3,213,023			55.03		2,850,927			54.45
Vested		(3,270,778	)		48.69		(3,373,323	)		46.42		(3,295,376	)		40.66
Cancelled		(361,161	)		50.55		(567,357	)		49.07		(374,103	)		43.91
Outstanding at end of period		6,606,833		$	48.99		6,719,298		$	48.17		7,446,955		$	44.49

The total fair value of shares vested was $175 million, $182 million and $180 million for the years ended December 31, 2019, 2018 and 2017, respectively. Stock-based compensation expense was $178 million, $174 million and $163 million for the years ended December 31, 2019, 2018 and 2017, respectively. On an after-tax basis, stock-based compensation was $133 million, $130 million and $101 million for the years ended

December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, there was $143 million of total unrecognized compensation cost related to nonvested share-based arrangements granted under the plans. That cost is expected to be recognized over a weighted-average period of 1.7 years as compensation expense.

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  NOTE 18   Income Taxes

The components of income tax expense were:

Year Ended December 31 (Dollars in Millions)	2019			2018			2017
Federal
Current	$	1,162		$	1,287		$	2,086
Deferred		166			(148	)		(1,180	)
Federal income tax		1,328			1,139			906
State
Current		379			395			201
Deferred		(59	)		20			157
State income tax		320			415			358
Total income tax provision	$	1,648		$	1,554		$	1,264

A reconciliation of expected income tax expense at the federal statutory rate of 21 percent for 2019 and 2018 and 35 percent for 2017 to the Company’s applicable income tax expense follows:

Year Ended December 31 (Dollars in Millions)	2019			2018			2017
Tax at statutory rate	$	1,805		$	1,822		$	2,631
State income tax, at statutory rates, net of federal tax benefit		355			352			281
Tax effect of
Revaluation of tax related assets and liabilities(a)		—			—			(910	)
Tax credits and benefits, net of related expenses		(424	)		(513	)		(774	)
Tax-exempt income		(120	)		(130	)		(200	)
Nondeductible legal and regulatory expenses		23			52			213
Other items(b)		9			(29	)		23
Applicable income taxes	$	1,648		$	1,554		$	1,264

(a) In late 2017, tax legislation was enacted that, among other provisions, reduced the federal statutory rate for corporations from 35 percent to 21 percent effective in 2018. In accordance with generally accepted accounting principles, the Company revalued its deferred tax assets and liabilities at December 31, 2017, resulting in an estimated net tax benefit of $910 million, which the Company recorded in 2017.

(b) Includes excess tax benefits associated with stock-based compensation and adjustments related to deferred tax assets and liabilities.

The tax effects of fair value adjustments on securities available-for-sale, derivative instruments in cash flow hedges, foreign currency translation adjustments, and pension and post-retirement plans are recorded directly to shareholders’ equity as part of other comprehensive income (loss).

In preparing its tax returns, the Company is required to interpret complex tax laws and regulations and utilize income and cost allocation methods to determine its taxable income. On an ongoing basis, the Company is subject to examinations by federal, state, local and foreign taxing authorities that may give rise to differing interpretations of these complex laws, regulations

and methods. Due to the nature of the examination process, it generally takes years before these examinations are completed and matters are resolved. Federal tax examinations for all years ending through December 31, 2010, and years ending December 31, 2013 and December 31, 2014 are completed and resolved. The Company’s tax returns for the years ended December 31, 2011, 2012, 2015 and 2016 are under examination by the Internal Revenue Service. The years open to examination by state and local government authorities vary by jurisdiction.

116    

A reconciliation of the changes in the federal, state and foreign uncertain tax position balances are summarized as follows:

Year Ended December 31 (Dollars in Millions)	2019			2018			2017
Balance at beginning of period	$	335		$	287		$	302
Additions for tax positions taken in prior years		168			93			3
Additions for tax positions taken in the current year		6			10			9
Exam resolutions		(62	)		(51	)		(23	)
Statute expirations		(15	)		(4	)		(4	)
Balance at end of period	$	432		$	335		$	287

The total amount of uncertain tax positions that, if recognized, would impact the effective income tax rate as of December 31, 2019, 2018 and 2017, were $274 million, $273 million and $265 million, respectively. The Company classifies interest and penalties related to uncertain tax positions as a component of income tax expense. At December 31, 2019, the Company’s uncertain tax position balance included $35 million of accrued interest and penalties. During the years ended December 31, 

2019, 2018 and 2017 the Company recorded approximately $7 million, $(25) million and $16 million, respectively, in interest and penalties on uncertain tax positions.

Deferred income tax assets and liabilities reflect the tax effect of estimated temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for the same items for income tax reporting purposes.

The significant components of the Company’s net deferred tax asset (liability) follows:

At December 31 (Dollars in Millions)	2019			2018
Deferred Tax Assets
Federal, state and foreign net operating loss and credit carryforwards	$	2,592		$	2,699
Allowance for credit losses		1,155			1,141
Accrued expenses		485			508
Obligation for operating leases		328			—
Pension and postretirement benefits		193			85
Partnerships and other investment assets		91			69
Stock compensation		78			79
Fixed assets		2			58
Securities available-for-sale and financial instruments		—			278
Other deferred tax assets, net		257			268
Gross deferred tax assets		5,181			5,185
Deferred Tax Liabilities
Leasing activities		(2,700	)		(2,652	)
Goodwill and other intangible assets		(763	)		(703	)
Mortgage servicing rights		(546	)		(642	)
Right of use assets		(282	)		—
Loans		(139	)		(168	)
Securities available-for-sale and financial instruments		(111	)		—
Other deferred tax liabilities, net		(131	)		(102	)
Gross deferred tax liabilities		(4,672	)		(4,267	)
Valuation allowance		(127	)		(109	)
Net Deferred Tax Asset	$	382		$	809

The Company has approximately $2.0 billion of federal, state and foreign net operating loss carryforwards which expire at various times beginning in 2020. A substantial portion of these carryforwards relate to state-only net operating losses, which are subject to a full valuation allowance as they are not expected to be realized within the carryforward period. Management has determined it is more likely than not the other net deferred tax assets could be realized through carry back to taxable income in

prior years, future reversals of existing taxable temporary differences and future taxable income.

In addition, the Company has $2.5 billion of federal credit carryforwards which expire at various times through 2039 which are not subject to a valuation allowance as management believes that it is more likely than not that the credits will be utilized within the carryforward period.

117    

At December 31, 2019, retained earnings included approximately $102 million of base year reserves of acquired thrift institutions, for which no deferred federal income tax liability has been recognized. These base year reserves would be recaptured if certain subsidiaries of the Company cease to qualify as a bank 

for federal income tax purposes. The base year reserves also remain subject to income tax penalty provisions that, in general, require recapture upon certain stock redemptions of, and excess distributions to, stockholders.

  NOTE 19   Derivative Instruments

In the ordinary course of business, the Company enters into derivative transactions to manage various risks and to accommodate the business requirements of its customers. The Company recognizes all derivatives on the Consolidated Balance Sheet at fair value in other assets or in other liabilities. On the date the Company enters into a derivative contract, the derivative is designated as either a fair value hedge, cash flow hedge, net investment hedge, or a designation is not made as it is a customer-related transaction, an economic hedge for asset/liability risk management purposes or another stand-alone derivative created through the Company’s operations (“free-standing derivative”). When a derivative is designated as a fair value, cash flow or net investment hedge, the Company performs an assessment, at inception and, at a minimum, quarterly thereafter, to determine the effectiveness of the derivative in offsetting changes in the value or cash flows of the hedged item(s).

Fair Value Hedges These derivatives are interest rate swaps the Company uses to hedge the change in fair value related to interest rate changes of its underlying fixed-rate debt. Changes in the fair value of derivatives designated as fair value hedges, and changes in the fair value of the hedged items, are recorded in earnings. 

Cash Flow Hedges These derivatives are interest rate swaps the Company uses to hedge the forecasted cash flows from its underlying variable-rate debt. Changes in the fair value of derivatives designated as cash flow hedges are recorded in other comprehensive income (loss) until the cash flows of the hedged items are realized. If a derivative designated as a cash flow hedge is terminated or ceases to be highly effective, the gain or loss in other comprehensive income (loss) is amortized to earnings over the period the forecasted hedged transactions impact earnings. If a hedged forecasted transaction is no longer probable, hedge accounting is ceased and any gain or loss included in other comprehensive income (loss) is reported in earnings immediately, unless the forecasted transaction is at least reasonably possible of occurring, whereby the amounts remain within other comprehensive income (loss). At December 31, 2019, the Company had $51 million (net-of-tax) of realized and unrealized losses on derivatives classified as cash flow hedges recorded in other comprehensive income (loss), compared with $112 million (net-of-tax) of realized and unrealized gains at December 31, 2018. The estimated amount to be reclassified from other

comprehensive income (loss) into earnings during the next 12 months is a loss of $32 million (net-of-tax). All cash flow hedges were highly effective for the year ended December 31, 2019.

Net Investment Hedges The Company uses forward commitments to sell specified amounts of certain foreign currencies, and non-derivative debt instruments, to hedge the volatility of its net investment in foreign operations driven by fluctuations in foreign currency exchange rates. The carrying amount of non-derivative debt instruments designated as net investment hedges was $1.3 billion at December 31, 2019, compared with $1.1 billion at December 31, 2018.

Other Derivative Positions The Company enters into free-standing derivatives to mitigate interest rate risk and for other risk management purposes. These derivatives include forward commitments to sell to-be-announced securities (“TBAs”) and other commitments to sell residential mortgage loans, which are used to economically hedge the interest rate risk related to MLHFS and unfunded mortgage loan commitments. The Company also enters into interest rate swaps, swaptions, forward commitments to buy TBAs, U.S. Treasury and Eurodollar futures and options on U.S. Treasury futures to economically hedge the change in the fair value of the Company’s MSRs. The Company also enters into foreign currency forwards to economically hedge remeasurement gains and losses the Company recognizes on foreign currency denominated assets and liabilities. In addition, the Company acts as a seller and buyer of interest rate derivatives and foreign exchange contracts for its customers. The Company mitigates the market and liquidity risk associated with these customer derivatives by entering into similar offsetting positions with broker-dealers, or on a portfolio basis by entering into other derivative or non-derivative financial instruments that partially or fully offset the exposure from these customer-related positions. The Company’s customer derivatives and related hedges are monitored and reviewed by the Company’s Market Risk Committee, which establishes policies for market risk management, including exposure limits for each portfolio. The Company also has derivative contracts that are created through its operations, including certain unfunded mortgage loan commitments and swap agreements related to the sale of a portion of its Class B common and preferred shares of Visa Inc. Refer to Note 21 for further information on these swap agreements.

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The following table summarizes the asset and liability management derivative positions of the Company:

	Asset Derivatives						Liability Derivatives
(Dollars in Millions)	Notional Value		Fair Value		Weighted-Average Remaining Maturity In Years		Notional Value		Fair Value		Weighted-Average Remaining Maturity In Years
December 31, 2019
Fair value hedges
Interest rate contracts
Receive fixed/pay floating swaps	$	18,300	$	–		3.89	$	4,900	$	–		3.49
Cash flow hedges
Interest rate contracts
Pay fixed/receive floating swaps		1,532		–		6.06		7,150		10		2.11
Net investment hedges
Foreign exchange forward contracts		–		–		–		287		3		.04
Other economic hedges
Interest rate contracts
Futures and forwards
Buy		5,409		17		.08		5,477		11		.07
Sell		16,333		13		.81		8,113		25		.03
Options
Purchased		10,180		79		2.97		–		–		–
Written		1,270		30		.08		4,238		81		2.07
Receive fixed/pay floating swaps		4,408		–		5.99		5,316		–		13.04
Pay fixed/receive floating swaps		1,259		–		5.67		4,497		–		6.03
Foreign exchange forward contracts		113		1		.05		467		6		.04
Equity contracts		128		2		.45		20		–		1.06
Other(a)		34		–		.01		1,823		165		2.45
Total	$	58,966	$	142			$	42,288	$	301
December 31, 2018
Cash flow hedges
Interest rate contracts
Pay fixed/receive floating swaps	$	7,422	$	8		3.11	$	4,320	$	–		1.77
Net investment hedges
Foreign exchange forward contracts		209		5		.05		223		1		.05
Other economic hedges
Interest rate contracts
Futures and forwards
Buy		2,839		27		.07		1,140		5		.05
Sell		994		3		.06		13,968		30		.72
Options
Purchased		5,080		88		10.77		–		–		–
Written		584		16		.09		3		–		.09
Receive fixed/pay floating swaps		3,605		–		14.80		4,333		–		6.97
Pay fixed/receive floating swaps		4,333		–		6.97		1,132		–		7.64
Foreign exchange forward contracts		549		7		.03		75		1		.05
Equity contracts		19		1		.82		104		2		.45
Other(a)		1		–		.01		1,458		84		1.50
Total	$	25,635	$	155			$	26,756	$	123

(a) Includes derivative liability swap agreements related to the sale of a portion of the Company’s Class B common and preferred shares of Visa Inc. The Visa swap agreements had a total notional value, fair value and weighted-average remaining maturity of $1.8 billion, $165 million and 2.50 years at December 31, 2019, respectively, compared to $1.5 billion, $84 million and 1.50 years at December 31, 2018, respectively. In addition, includes short-term underwriting purchase and sale commitments with total asset and liability notional values of $34 million at December 31, 2019, and $1 million at December 31, 2018.

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The following table summarizes the customer-related derivative positions of the Company:

	Asset Derivatives						Liability Derivatives
(Dollars in Millions)	Notional Value		Fair Value		Weighted-Average Remaining Maturity In Years		Notional Value		Fair Value		Weighted-Average Remaining Maturity In Years
December 31, 2019
Interest rate contracts
Receive fixed/pay floating swaps	$	108,560	$	1,865		4.83	$	31,544	$	88		3.83
Pay fixed/receive floating swaps		28,150		30		3.83		101,078		753		4.55
Other(a)		6,895		1		3.45		6,218		2		2.98
Options
Purchased		46,406		43		2.06		12,804		47		1.25
Written		6,901		49		1.93		49,741		41		1.82
Futures
Buy		894		–		.21		–		–		–
Sell		3,874		1		1.18		1,995		–		1.04
Foreign exchange rate contracts
Forwards, spots and swaps		36,350		748		.97		36,671		729		1.07
Options
Purchased		1,354		17		.54		–		–		–
Written		–		–		–		1,354		17		.54
Credit contracts		2,879		1		3.28		7,488		5		4.33
Total	$	242,263	$	2,755			$	248,893	$	1,682
December 31, 2018
Interest rate contracts
Receive fixed/pay floating swaps	$	42,054	$	754		6.73	$	60,731	$	456		4.32
Pay fixed/receive floating swaps		60,970		288		3.90		40,499		420		6.57
Other(a)		5,777		2		3.77		6,496		2		2.72
Options
Purchased		41,711		51		1.54		1,940		30		1.98
Written		2,060		32		2.07		39,538		51		1.44
Futures
Buy		460		–		1.58		–		–		–
Sell		–		–		–		6,190		1		.59
Foreign exchange rate contracts
Forwards, spots and swaps		26,210		681		.91		25,571		663		.88
Options
Purchased		2,779		47		.75		–		–		–
Written		–		–		–		2,779		47		.75
Credit contracts		2,318		–		3.50		4,923		2		4.04
Total	$	184,339	$	1,855			$	188,667	$	1,672

(a) Primarily represents floating rate interest rate swaps that pay based on differentials between specified interest rate indexes.

120    

The table below shows the effective portion of the gains (losses) recognized in other comprehensive income (loss) and the gains (losses) reclassified from other comprehensive income (loss) into earnings (net-of-tax) for the years ended December 31:

	Gains (Losses) Recognized in Other Comprehensive Income (Loss)								Gains (Losses) Reclassified from Other Comprehensive Income (Loss) into Earnings
(Dollars in Millions)	2019			2018		2017			2019			2018		2017
Asset and Liability Management Positions
Cash flow hedges
Interest rate contracts	$	(171	)	$	29	$	(3	)	$	(8	)	$	3	$	(19	)
Net investment hedges
Foreign exchange forward contracts		3			39		(56	)		–			–		–
Non-derivative debt instruments		13			32		(46	)		–			–		–

Note: The Company does not exclude components from effectiveness testing for cash flow and net investment hedges.

The table below shows the effect of fair value and cash flow hedge accounting on the Consolidated Statement of Income for the years ended December 31:

	Other Noninterest Income							Interest Expense
(Dollars in Millions)	2019		2018		2017			2019			2018			2017
Total amount of income and expense line items presented in the Consolidated Statement of Income in which the effects of fair value or cash flow hedges are recorded	$	926	$	910	$	774		$	4,442		$	3,254		$	1,966
Asset and Liability Management Positions
Fair value hedges
Interest rate contract derivatives		–		–		(28	)		(44	)		5			–
Hedged items		–		–		28			44			(5	)		–
Cash Flow hedges
Interest rate contract derivatives		–		–		–			11			(5	)		30

Note: The Company does not exclude components from effectiveness testing for fair value and cash flow hedges. The Company did not reclassify gains or losses into earnings as a result of the discontinuance of cash flow hedges during the years ended December 31, 2019, 2018 and 2017.

The table below shows cumulative hedging adjustments and the carrying amount of assets (liabilities) designated in fair value hedges:

	Carrying Amount of the Hedged Assets (Liabilities)				Cumulative Hedging Adjustment(a)
At December 31 (Dollars in Millions)	2019		2018		2019		2018
Line Item in the Consolidated Balance Sheet
Long-term Debt	$	23,195	$	–	$	35	$	(27	)

(a) The cumulative hedging adjustment related to discontinued hedging relationships at December 31, 2019 and 2018 was $(7) million and $(27) million, respectively.

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The table below shows the gains (losses) recognized in earnings for other economic hedges and the customer-related positions for the years ended December 31:

(Dollars in Millions)	Location of Gains (Losses) Recognized in Earnings		2019			2018			2017
Asset and Liability Management Positions
Other economic hedges
Interest rate contracts
Futures and forwards		Mortgage banking revenue	$	34		$	110		$	24
Purchased and written options		Mortgage banking revenue		432			188			237
Swaps		Mortgage banking revenue		316			(111	)		35
Foreign exchange forward contracts		Other noninterest income		(24	)		39			(69	)
Equity contracts		Compensation expense		–			(4	)		1
Other		Other noninterest income		(140	)		2			(1	)
Customer-Related Positions
Interest rate contracts
Swaps		Commercial products revenue		82			47			67
Purchased and written options		Commercial products revenue		10			2			(24	)
Futures		Commercial products revenue		(5	)		9			(3	)
Foreign exchange rate contracts
Forwards, spots and swaps		Commercial products revenue		82			84			92
Purchased and written options		Commercial products revenue		1			–			2
Credit contracts		Commercial products revenue		(18	)		2			3

Derivatives are subject to credit risk associated with counterparties to the derivative contracts. The Company measures that credit risk using a credit valuation adjustment and includes it within the fair value of the derivative. The Company manages counterparty credit risk through diversification of its derivative positions among various counterparties, by entering into derivative positions that are centrally cleared through clearinghouses, by entering into master netting arrangements and, where possible, by requiring collateral arrangements. A master netting arrangement allows two counterparties, who have multiple derivative contracts with each other, the ability to net settle amounts under all contracts, including any related collateral, through a single payment and in a single currency. Collateral arrangements generally require the counterparty to deliver collateral (typically cash or U.S. Treasury and agency securities) equal to the Company’s net derivative receivable, subject to minimum transfer and credit rating requirements.

The Company’s collateral arrangements are predominately bilateral and, therefore, contain provisions that require collateralization of the Company’s net liability derivative positions. Required collateral coverage is based on net liability thresholds and may be contingent upon the Company’s credit rating from two of the nationally recognized statistical rating organizations. If the Company’s credit rating were to fall below credit ratings thresholds established in the collateral arrangements, the counterparties to the derivatives could request immediate additional collateral coverage up to and including full collateral coverage for derivatives in a net liability position. The aggregate fair value of all derivatives under collateral arrangements that were in a net liability position at December 31, 2019, was $717 million. At December 31, 2019, the Company had $514 million of cash posted as collateral against this net liability position.

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NOTE 20	Netting Arrangements for Certain Financial Instruments and Securities Financing
	Activities

The Company’s derivative portfolio consists of bilateral over-the-counter trades, certain interest rate derivatives and credit contracts required to be centrally cleared through clearinghouses per current regulations, and exchange-traded positions which may include U.S. Treasury and Eurodollar futures or options on U.S. Treasury futures. Of the Company’s $592.4 billion total notional amount of derivative positions at December 31, 2019, $299.4 billion related to bilateral over-the-counter trades, $272.4 billion related to those centrally cleared through clearinghouses and $20.6 billion related to those that were exchange-traded. The Company’s derivative contracts typically include offsetting rights (referred to as netting arrangements), and depending on expected volume, credit risk, and counterparty preference, collateral maintenance may be required. For all derivatives under collateral support arrangements, fair value is determined daily and, depending on the collateral maintenance requirements, the Company and a counterparty may receive or deliver collateral, based upon the net fair value of all derivative positions between the Company and the counterparty. Collateral is typically cash, but securities may be allowed under collateral arrangements with certain counterparties. Receivables and payables related to cash collateral are included in other assets and other liabilities on the Consolidated Balance Sheet, along with the related derivative asset and liability fair values. Any securities pledged to counterparties as collateral remain on the Consolidated Balance Sheet. Securities received from counterparties as collateral are not recognized on the Consolidated Balance Sheet, unless the counterparty defaults. In general, securities used as collateral can be sold, repledged or otherwise used by the party in possession. No restrictions exist on the use of cash collateral by either party. Refer to Note 19 for further discussion of the Company’s derivatives, including collateral arrangements.

As part of the Company’s treasury and broker-dealer operations, the Company executes transactions that are treated as securities sold under agreements to repurchase or securities purchased under agreements to resell, both of which are

accounted for as collateralized financings. Securities sold under agreements to repurchase include repurchase agreements and securities loaned transactions. Securities purchased under agreements to resell include reverse repurchase agreements and securities borrowed transactions. For securities sold under agreements to repurchase, the Company records a liability for the cash received, which is included in short-term borrowings on the Consolidated Balance Sheet. For securities purchased under agreements to resell, the Company records a receivable for the cash paid, which is included in other assets on the Consolidated Balance Sheet.

Securities transferred to counterparties under repurchase agreements and securities loaned transactions continue to be recognized on the Consolidated Balance Sheet, are measured at fair value, and are included in investment securities or other assets. Securities received from counterparties under reverse repurchase agreements and securities borrowed transactions are not recognized on the Consolidated Balance Sheet unless the counterparty defaults. The securities transferred under repurchase and reverse repurchase transactions typically are U.S. Treasury and agency securities, residential agency mortgage-backed securities or corporate debt securities. The securities loaned or borrowed typically are corporate debt securities traded by the Company’s broker-dealer subsidiary. In general, the securities transferred can be sold, repledged or otherwise used by the party in possession. No restrictions exist on the use of cash collateral by either party. Repurchase/reverse repurchase and securities loaned/borrowed transactions expose the Company to counterparty risk. The Company manages this risk by performing assessments, independent of business line managers, and establishing concentration limits on each counterparty. Additionally, these transactions include collateral arrangements that require the fair values of the underlying securities to be determined daily, resulting in cash being obtained or refunded to counterparties to maintain specified collateral levels.

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The following table summarizes the maturities by category of collateral pledged for repurchase agreements and securities loaned transactions:

(Dollars in Millions)	Overnight and Continuous		Less Than 30 Days		30-89 Days		Greater Than 90 Days		Total
December 31, 2019
Repurchase agreements
U.S. Treasury and agencies	$	289	$	—	$	—	$	—	$	289
Residential agency mortgage-backed securities		266		—		—		—		266
Corporate debt securities		610		—		—		—		610
Total repurchase agreements		1,165		—		—		—		1,165
Securities loaned
Corporate debt securities		50		—		—		—		50
Total securities loaned		50		—		—		—		50
Gross amount of recognized liabilities	$	1,215	$	—	$	—	$	—	$	1,215
December 31, 2018
Repurchase agreements
U.S. Treasury and agencies	$	134	$	—	$	—	$	—	$	134
Residential agency mortgage-backed securities		565		—		945		470		1,980
Corporate debt securities		480		—		—		—		480
Total repurchase agreements		1,179		—		945		470		2,594
Securities loaned
Corporate debt securities		227		—		—		—		227
Total securities loaned		227		—		—		—		227
Gross amount of recognized liabilities	$	1,406	$	—	$	945	$	470	$	2,821

The Company executes its derivative, repurchase/reverse repurchase and securities loaned/borrowed transactions under the respective industry standard agreements. These agreements include master netting arrangements that allow for multiple contracts executed with the same counterparty to be viewed as a single arrangement. This allows for net settlement of a single amount on a daily basis. In the event of default, the master netting arrangement provides for close-out netting, which allows all of these positions with the defaulting counterparty to be terminated and net settled with a single payment amount.

The Company has elected to offset the assets and liabilities under netting arrangements for the balance sheet presentation of the majority of its derivative counterparties. The netting occurs at the counterparty level, and includes all assets and liabilities related to the derivative contracts, including those associated with cash collateral received or delivered. The Company has not elected to offset the assets and liabilities under netting arrangements for the balance sheet presentation of repurchase/reverse repurchase and securities loaned/borrowed transactions.

The following tables provide information on the Company’s netting adjustments, and items not offset on the Consolidated Balance Sheet but available for offset in the event of default:

	Gross Recognized Assets		Gross Amounts Offset on the Consolidated Balance Sheet(a)			Net Amounts Presented on the Consolidated Balance Sheet		Gross Amounts Not Offset on the Consolidated Balance Sheet
(Dollars in Millions)								Financial Instruments(b)			Collateral Received(c)			Net Amount
December 31, 2019
Derivative assets(d)	$	2,857	$	(982	)	$	1,875	$	(80	)	$	(116	)	$	1,679
Reverse repurchase agreements		1,021		—			1,021		(152	)		(869	)		—
Securities borrowed		1,624		—			1,624		—			(1,569	)		55
Total	$	5,502	$	(982	)	$	4,520	$	(232	)	$	(2,554	)	$	1,734
December 31, 2018
Derivative assets(d)	$	1,987	$	(942	)	$	1,045	$	(106	)	$	(16	)	$	923
Reverse repurchase agreements		205		—			205		(114	)		(91	)		—
Securities borrowed		1,069		—			1,069		—			(1,039	)		30
Total	$	3,261	$	(942	)	$	2,319	$	(220	)	$	(1,146	)	$	953

(a) Includes $429 million and $236 million of cash collateral related payables that were netted against derivative assets at December 31, 2019 and 2018, respectively.

(b) For derivative assets this includes any derivative liability fair values that could be offset in the event of counterparty default; for reverse repurchase agreements this includes any repurchase agreement payables that could be offset in the event of counterparty default; for securities borrowed this includes any securities loaned payables that could be offset in the event of counterparty default.

(c) Includes the fair value of securities received by the Company from the counterparty. These securities are not included on the Consolidated Balance Sheet unless the counterparty defaults.

(d) Excludes $40 million and $23 million at December 31, 2019 and 2018, respectively, of derivative assets not subject to netting arrangements.

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	Gross Recognized Liabilities		Gross Amounts Offset on the Consolidated Balance Sheet(a)			Net Amounts Presented on the Consolidated Balance Sheet		Gross Amounts Not Offset on the Consolidated Balance Sheet
(Dollars in Millions)								Financial Instruments(b)			Collateral Pledged(c)			Net Amount
December 31, 2019
Derivative liabilities(d)	$	1,816	$	(1,067	)	$	749	$	(80	)	$	–		$	669
Repurchase agreements		1,165		–			1,165		(152	)		(1,012	)		1
Securities loaned		50		–			50		–			(49	)		1
Total	$	3,031	$	(1,067	)	$	1,964	$	(232	)	$	(1,061	)	$	671
December 31, 2018
Derivative liabilities(d)	$	1,710	$	(946	)	$	764	$	(106	)	$	–		$	658
Repurchase agreements		2,594		–			2,594		(114	)		(2,480	)		–
Securities loaned		227		–			227		–			(224	)		3
Total	$	4,531	$	(946	)	$	3,585	$	(220	)	$	(2,704	)	$	661

(a) Includes $514 million and $240 million of cash collateral related receivables that were netted against derivative liabilities at December 31, 2019 and 2018, respectively.

(b) For derivative liabilities this includes any derivative asset fair values that could be offset in the event of counterparty default; for repurchase agreements this includes any reverse repurchase agreement receivables that could be offset in the event of counterparty default; for securities loaned this includes any securities borrowed receivables that could be offset in the event of counterparty default.

(c) Includes the fair value of securities pledged by the Company to the counterparty. These securities are included on the Consolidated Balance Sheet unless the Company defaults.

(d) Excludes $167 million and $85 million at December 31, 2019 and 2018, respectively, of derivative liabilities not subject to netting arrangements.

  NOTE 21 Fair Values of Assets and Liabilities

The Company uses fair value measurements for the initial recording of certain assets and liabilities, periodic remeasurement of certain assets and liabilities, and disclosures. Derivatives, trading and available-for-sale investment securities, MSRs and substantially all MLHFS are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as loans held for sale, loans held for investment and certain other assets. These nonrecurring fair value adjustments typically involve application of lower-of-cost-or-fair value accounting or impairment write-downs of individual assets.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value measurement reflects all of the assumptions that market participants would use in pricing the asset or liability, including assumptions about the risk inherent in a particular valuation technique, the effect of a restriction on the sale or use of an asset and the risk of nonperformance.

The Company groups its assets and liabilities measured at fair value into a three-level hierarchy for valuation techniques used to measure financial assets and financial liabilities at fair value. This hierarchy is based on whether the valuation inputs are observable or unobservable. These levels are:

– Level 1—Quoted prices in active markets for identical assets or liabilities. Level 1 includes U.S. Treasury securities, as well as exchange-traded instruments.

– Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for

substantially the full term of the assets or liabilities. Level 2 includes debt securities that are traded less frequently than exchange-traded instruments and which are typically valued using third-party pricing services; derivative contracts and other assets and liabilities, including securities, whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data; and MLHFS whose values are determined using quoted prices for similar assets or pricing models with inputs that are observable in the market or can be corroborated by observable market data.

– Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category includes MSRs and certain derivative contracts.

Valuation Methodologies

The valuation methodologies used by the Company to measure financial assets and liabilities at fair value are described below. In addition, the following section includes an indication of the level of the fair value hierarchy in which the assets or liabilities are classified. Where appropriate, the descriptions include information about the valuation models and key inputs to those models. During the years ended December 31, 2019, 2018 and 2017, there were no significant changes to the valuation techniques used by the Company to measure fair value.

125    

Available-For-Sale Investment Securities When quoted market prices for identical securities are available in an active market, these prices are used to determine fair value and these securities are classified within Level 1 of the fair value hierarchy. Level 1 investment securities include U.S. Treasury and exchange-traded securities.

For other securities, quoted market prices may not be readily available for the specific securities. When possible, the Company determines fair value based on market observable information, including quoted market prices for similar securities, inactive transaction prices, and broker quotes. These securities are classified within Level 2 of the fair value hierarchy. Level 2 valuations are generally provided by a third-party pricing service. Level 2 investment securities are predominantly agency mortgage-backed securities, certain other asset-backed securities, obligations of state and political subdivisions and agency debt securities.

Mortgage Loans Held For Sale MLHFS measured at fair value, for which an active secondary market and readily available market prices exist, are initially valued at the transaction price and are subsequently valued by comparison to instruments with similar collateral and risk profiles. MLHFS are classified within Level 2. Included in mortgage banking revenue was a net gain of $73 million, a net loss of $60 million and a net gain of $84 million for the years ended December 31, 2019, 2018 and 2017, respectively, from the changes to fair value of these MLHFS under fair value option accounting guidance. Changes in fair value due to instrument specific credit risk were immaterial. Interest income for MLHFS is measured based on contractual interest rates and reported as interest income on the Consolidated Statement of Income. Electing to measure MLHFS at fair value reduces certain timing differences and better matches changes in fair value of these assets with changes in the value of the derivative instruments used to economically hedge them without the burden of complying with the requirements for hedge accounting.

Mortgage Servicing Rights MSRs are valued using a discounted cash flow methodology, and are classified within Level 3. The Company determines fair value of the MSRs by projecting future cash flows for different interest rate scenarios using prepayment rates and other assumptions, and discounts these cash flows using a risk adjusted rate based on option adjusted spread levels. There is minimal observable market activity for MSRs on comparable portfolios and, therefore, the determination of fair value requires significant management judgment. Refer to Note 9 for further information on MSR valuation assumptions.

Derivatives The majority of derivatives held by the Company are executed over-the-counter or centrally cleared through clearinghouses and are valued using market standard cash flow valuation techniques. The models incorporate inputs, depending on the type of derivative, including interest rate curves, foreign exchange rates and volatility. All derivative values incorporate an assessment of the risk of counterparty nonperformance, measured based on the Company’s evaluation of credit risk

including external assessments of credit risk. The Company monitors and manages its nonperformance risk by considering its ability to net derivative positions under master netting arrangements, as well as collateral received or provided under collateral arrangements. Accordingly, the Company has elected to measure the fair value of derivatives, at a counterparty level, on a net basis. The majority of the derivatives are classified within Level 2 of the fair value hierarchy, as the significant inputs to the models, including nonperformance risk, are observable. However, certain derivative transactions are with counterparties where risk of nonperformance cannot be observed in the market and, therefore, the credit valuation adjustments result in these derivatives being classified within Level 3 of the fair value hierarchy.

The Company also has other derivative contracts that are created through its operations, including commitments to purchase and originate mortgage loans and swap agreements executed in conjunction with the sale of a portion of its Class B common and preferred shares of Visa Inc. (the “Visa swaps”). The mortgage loan commitments are valued by pricing models that include market observable and unobservable inputs, which result in the commitments being classified within Level 3 of the fair value hierarchy. The unobservable inputs include assumptions about the percentage of commitments that actually become a closed loan and the MSR value that is inherent in the underlying loan value. The Visa swaps require payments by either the Company or the purchaser of the Visa Inc. Class B common and preferred shares when there are changes in the conversion rate of the Visa Inc. Class B common and preferred shares to Visa Inc. Class A common and preferred shares, respectively, as well as quarterly payments to the purchaser based on specified terms of the agreements. Management reviews and updates the Visa swaps fair value in conjunction with its review of Visa Inc. related litigation contingencies, and the associated escrow funding. The expected litigation resolution impacts the Visa Inc. Class B common share to Visa Inc. Class A common share conversion rate, as well as the ultimate termination date for the Visa swaps. Accordingly, the Visa swaps are classified within Level 3. Refer to Note 22 for further information on the Visa Inc. restructuring and related card association litigation.

Significant Unobservable Inputs of Level 3 Assets and Liabilities

The following section provides information to facilitate an understanding of the uncertainty in the fair value measurements for the Company’s Level 3 assets and liabilities recorded at fair value on the Consolidated Balance Sheet. This section includes a description of the significant inputs used by the Company and a description of any interrelationships between these inputs. The discussion below excludes nonrecurring fair value measurements of collateral value used for impairment measures for loans and OREO. These valuations utilize third-party appraisal or broker price opinions, and are classified as Level 3 due to the significant judgment involved.

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Mortgage Servicing Rights The significant unobservable inputs used in the fair value measurement of the Company’s MSRs are expected prepayments and the option adjusted spread that is added to the risk-free rate to discount projected cash flows. Significant increases in either of these inputs in isolation would have resulted in a significantly lower fair value measurement. Significant decreases in either of these inputs in isolation would

have resulted in a significantly higher fair value measurement. There is no direct interrelationship between prepayments and option adjusted spread. Prepayment rates generally move in the opposite direction of market interest rates. Option adjusted spread is generally impacted by changes in market return requirements.

The following table shows the significant valuation assumption ranges for MSRs at December 31, 2019:

	Minimum			Maximum			Weighted Average(a)
Expected prepayment		9	%		22	%		12	%
Option adjusted spread		6			10			7

(a) Determined based on the relative fair value of the related mortgage loans serviced.

Derivatives The Company has two distinct Level 3 derivative portfolios: (i) the Company’s commitments to purchase and originate mortgage loans that meet the requirements of a derivative and (ii) the Company’s asset/liability and customer-related derivatives that are Level 3 due to unobservable inputs related to measurement of risk of nonperformance by the counterparty. In addition, the Company’s Visa swaps are classified within Level 3.

The significant unobservable inputs used in the fair value measurement of the Company’s derivative commitments to

purchase and originate mortgage loans are the percentage of commitments that actually become a closed loan and the MSR value that is inherent in the underlying loan value. A significant increase in the rate of loans that close would have resulted in a larger derivative asset or liability. A significant increase in the inherent MSR value would have resulted in an increase in the derivative asset or a reduction in the derivative liability. Expected loan close rates and the inherent MSR values are directly impacted by changes in market rates and will generally move in the same direction as interest rates.

The following table shows the significant valuation assumption ranges for the Company’s derivative commitments to purchase and originate mortgage loans at December 31, 2019:

	Minimum			Maximum			Weighted Average(a)
Expected loan close rate		12	%		100	%		78	%
Inherent MSR value (basis points per loan)		56			221			130

(a) Determined based on the relative fair value of the related mortgage loans.

The significant unobservable input used in the fair value measurement of certain of the Company’s asset/liability and customer-related derivatives is the credit valuation adjustment related to the risk of counterparty nonperformance. A significant increase in the credit valuation adjustment would have resulted in a lower fair value measurement. A significant decrease in the credit valuation adjustment would have resulted in a higher fair value measurement. The credit valuation adjustment is impacted by changes in market rates, volatility, market implied credit spreads, and loss recovery rates, as well as the Company’s assessment of the counterparty’s credit position. At December 31, 2019, the minimum, maximum and weighted-average credit valuation adjustment as a percentage of the

derivative contract fair value prior to adjustment was 0 percent, 671 percent and 1 percent, respectively.

The significant unobservable inputs used in the fair value measurement of the Visa swaps are management’s estimate of the probability of certain litigation scenarios, and the timing of the resolution of the related litigation loss estimates in excess, or shortfall, of the Company’s proportional share of escrow funds. An increase in the loss estimate or a delay in the resolution of the related litigation would have resulted in an increase in the derivative liability. A decrease in the loss estimate or an acceleration of the resolution of the related litigation would have resulted in a decrease in the derivative liability.

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The following table summarizes the balances of assets and liabilities measured at fair value on a recurring basis:

(Dollars in Millions)	Level 1		Level 2		Level 3		Netting			Total
December 31, 2019
Available-for-sale securities
U.S. Treasury and agencies	$	18,986	$	853	$	–	$	–		$	19,839
Mortgage-backed securities
Residential agency		–		94,111		–		–			94,111
Commercial agency		–		1,453		–		–			1,453
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations		–		–		1		–			1
Other		–		375		7		–			382
Obligations of state and political subdivisions		–		6,813		1		–			6,814
Obligations of foreign governments		–		9		–		–			9
Corporate debt securities		–		4		–		–			4
Total available-for-sale		18,986		103,618		9		–			122,613
Mortgage loans held for sale		–		5,533		–		–			5,533
Mortgage servicing rights		–		–		2,546		–			2,546
Derivative assets		9		1,707		1,181		(982	)		1,915
Other assets		312		1,563		–		–			1,875
Total	$	19,307	$	112,421	$	3,736	$	(982	)	$	134,482
Derivative liabilities	$	–	$	1,612	$	371	$	(1,067	)	$	916
Short-term borrowings and other liabilities(a)		50		1,578		–		–			1,628
Total	$	50	$	3,190	$	371	$	(1,067	)	$	2,544
December 31, 2018
Available-for-sale securities
U.S. Treasury and agencies	$	18,585	$	672	$	–	$	–		$	19,257
Mortgage-backed securities
Residential agency		–		39,752		–		–			39,752
Commercial agency		–		2		–		–			2
Other asset-backed securities		–		403		–		–			403
Obligations of state and political subdivisions		–		6,701		–		–			6,701
Total available-for-sale		18,585		47,530		–		–			66,115
Mortgage loans held for sale		–		2,035		–		–			2,035
Mortgage servicing rights		–		–		2,791		–			2,791
Derivative assets		–		1,427		583		(942	)		1,068
Other assets		392		1,273		–		–			1,665
Total	$	18,977	$	52,265	$	3,374	$	(942	)	$	73,674
Derivative liabilities	$	1	$	1,291	$	503	$	(946	)	$	849
Short-term borrowings and other liabilities(a)		199		1,019		–		–			1,218
Total	$	200	$	2,310	$	503	$	(946	)	$	2,067

Note: Excluded from the table above are equity investments without readily determinable fair values. The Company has elected to carry these investments at historical cost, adjusted for impairment and any changes resulting from observable price changes for identical or similar investments of the issuer. The aggregate carrying amount of these equity investments was $91 million and $86 million at December 31, 2019 and 2018, respectively. The Company has not recorded impairments or adjustments for observable price changes on these equity investments during 2019 or on a cumulative basis.

(a) Primarily represents the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.

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The following table presents the changes in fair value for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31:

(Dollars in Millions)	Beginning of Period Balance		Net Gains (Losses) Included in Net Income			Net Gains (Losses) Included in Other Comprehensive Income (Loss)			Purchases		Sales			Principal Payments			Issuances			Settlements			Transfers into Level 3		End of Period Balance		Net Change in Unrealized Gains (Losses) Relating to Assets and Liabilities Held at End of Period
2019
Available-for-sale securities
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations	$	–	$	–		$	–		$	–	$	–		$	–		$	–		$	–		$	1	$	1	$	–
Other		–		–			–			–		–			–			–			–			7		7		–
Obligations of state and political subdivisions		–		–			–			–		–			–			–			–			1		1		–
Total available-for-sale		–		–			–			–		–			–			–			–			9		9		–
Mortgage servicing rights		2,791		(829	)(c)		–			20		5			–			559	(e)		–			–		2,546		(829	)(c)
Net derivative assets and liabilities		80		769	(d)		–			142		(9	)		–			–			(172	)		–		810		782	(f)
2018
Mortgage servicing rights	$	2,645	$	(232	)(c)	$	–		$	8	$	(27	)	$	–		$	397	(e)	$	–		$	–	$	2,791	$	(232	)(c)
Net derivative assets and liabilities		107		21	(g)		–			13		(41	)		–			–			(20	)		–		80		34	(h)
2017
Available-for-sale securities
Residential non-agency mortgage-backed securities
Prime(a)	$	242	$	–		$	(2	)	$	–	$	(234	)	$	(6	)	$	–		$	–		$	–	$	–	$	–
Non-prime(b)		195		–			(17	)		–		(175	)		(3	)		–			–			–		–		–
Other asset-backed securities		2		–			–			–		(2	)		–			–			–			–		–		–
Corporate debt securities		9		–			2			–		(11	)		–			–			–			–		–		–
Total available-for-sale		448		–			(17	)(i)		–		(422	)		(9	)		–			–			–		–		–
Mortgage servicing rights		2,591		(404	)(c)		–			13		–			–			445	(e)		–			–		2,645		(404	)(c)
Net derivative assets and liabilities		171		317	(j)		–			1		(10	)		–			–			(372	)		–		107		(52	)(k)

(a) Prime securities are those designated as such by the issuer at origination. When an issuer designation is unavailable, the Company determines at acquisition date the categorization based on asset pool characteristics (such as weighted-average credit score, loan-to-value, loan type, prevalence of low documentation loans) and deal performance (such as pool delinquencies and security market spreads).

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

(c) Included in mortgage banking revenue.

(d) Approximately $287 million included in other noninterest income and $482 million included in mortgage banking revenue.

(e) Represents MSRs capitalized during the period.

(f) Approximately $747 million included in other noninterest income and $35 million included in mortgage banking revenue.

(g) Approximately $(139) million included in other noninterest income and $160 million included in mortgage banking revenue.

(h) Approximately $14 million included in other noninterest income and $20 million included in mortgage banking revenue.

(i) Included in changes in unrealized gains and losses on investment securities available-for-sale.

(j) Approximately $21 million included in other noninterest income and $296 million included in mortgage banking revenue.

(k) Approximately $(77) million included in other noninterest income and $25 million included in mortgage banking revenue.

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The Company is also required periodically to measure certain other financial assets at fair value on a nonrecurring basis. These measurements of fair value usually result from the application of lower-of-cost-or-fair value accounting or write-downs of individual assets.

The following table summarizes the balances as of the measurement date of assets measured at fair value on a nonrecurring basis, and still held as of December 31:

	2019								2018
(Dollars in Millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Loans(a)	$	–	$	–	$	136	$	136	$	–	$	–	$	40	$	40
Other assets(b)		–		–		46		46		–		–		57		57

(a) Represents the carrying value of loans for which adjustments were based on the fair value of the collateral, excluding loans fully charged-off.

(b) Primarily represents the fair value of foreclosed properties that were measured at fair value based on an appraisal or broker price opinion of the collateral subsequent to their initial acquisition.

The following table summarizes losses recognized related to nonrecurring fair value measurements of individual assets or portfolios for the years ended December 31:

(Dollars in Millions)	2019		2018		2017
Loans(a)	$	122	$	83	$	171
Other assets(b)		17		26		20

(a) Represents write-downs of loans which were based on the fair value of the collateral, excluding loans fully charged-off.

(b) Primarily represents related losses of foreclosed properties that were measured at fair value subsequent to their initial acquisition.

Fair Value Option

The following table summarizes the differences between the aggregate fair value carrying amount of MLHFS for which the fair value option has been elected and the aggregate unpaid principal amount that the Company is contractually obligated to receive at maturity as of December 31:

	2019						2018
(Dollars in Millions)	Fair Value Carrying Amount		Aggregate Unpaid Principal		Carrying Amount Over (Under) Unpaid Principal		Fair Value Carrying Amount		Aggregate Unpaid Principal		Carrying Amount Over (Under) Unpaid Principal
Total loans	$	5,533	$	5,366	$	167	$	2,035	$	1,972	$	63
Nonaccrual loans		1		1		–		2		2		–
Loans 90 days or more past due		1		1		–		–		–		–

Fair Value of Financial Instruments

The following section summarizes the estimated fair value for financial instruments accounted for at amortized cost as of December 31, 2019 and 2018. In accordance with disclosure guidance related to fair values of financial instruments, the Company did not include assets and liabilities that are not financial instruments, such as the value of goodwill, long-term

relationships with deposit, credit card, merchant processing and trust customers, other purchased intangibles, premises and equipment, deferred taxes and other liabilities. Additionally, in accordance with the disclosure guidance, receivables and payables due in one year or less, insurance contracts, equity investments not accounted for at fair value, and deposits with no defined or contractual maturities are excluded.

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The estimated fair values of the Company’s financial instruments as of December 31, are shown in the table below:

	2019										2018
	Carrying Amount		Fair Value								Carrying Amount		Fair Value
(Dollars in Millions)			Level 1		Level 2		Level 3		Total				Level 1		Level 2		Level 3		Total
Financial Assets
Cash and due from banks	$	22,405	$	22,405	$	–	$	–	$	22,405	$	21,453	$	21,453	$	–	$	–	$	21,453
Federal funds sold and securities purchased under resale agreements		1,036		–		1,036		–		1,036		306		–		306		–		306
Investment securities held-to-maturity		–		–		–		–		–		46,050		4,594		40,359		11		44,964
Loans held for sale(a)		45		–		–		43		43		21		–		–		21		21
Loans		292,082		–		–		297,241		297,241		282,837		–		–		284,790		284,790
Other		1,923		–		929		994		1,923		2,412		–		1,241		1,171		2,412
Financial Liabilities
Time deposits		42,894		–		42,831		–		42,831		44,554		–		44,140		–		44,140
Short-term borrowings(b)		22,095		–		21,461		–		21,461		12,921		–		12,678		–		12,678
Long-term debt		40,167		–		41,077		–		41,077		41,340		–		41,003		–		41,003
Other		3,678		–		1,342		2,336		3,678		1,726		–		–		1,726		1,726

(a) Excludes mortgages held for sale for which the fair value option under applicable accounting guidance was elected.

(b) Excludes the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.

The fair value of unfunded commitments, deferred non-yield related loan fees, standby letters of credit and other guarantees is approximately equal to their carrying value. The carrying value of unfunded commitments, deferred non-yield related loan fees and

standby letters of credit was $528 million and $532 million at December 31, 2019 and 2018, respectively. The carrying value of other guarantees was $200 million and $263 million at December 31, 2019 and 2018, respectively.

  NOTE 22   Guarantees and Contingent Liabilities

Visa Restructuring and Card Association Litigation The Company’s payment services business issues credit and debit cards and acquires credit and debit card transactions through the Visa U.S.A. Inc. card association or its affiliates (collectively “Visa”). In 2007, Visa completed a restructuring and issued shares of Visa Inc. common stock to its financial institution members in contemplation of its initial public offering (“IPO”) completed in the first quarter of 2008 (the “Visa Reorganization”). As a part of the Visa Reorganization, the Company received its proportionate number of shares of Visa Inc. common stock, which were subsequently converted to Class B shares of Visa Inc. (“Class B shares”).

Visa U.S.A. Inc. (“Visa U.S.A.”) and MasterCard International (collectively, the “Card Associations”) are defendants in antitrust lawsuits challenging the practices of the Card Associations (the “Visa Litigation”). Visa U.S.A. member banks have a contingent obligation to indemnify Visa Inc. under the Visa U.S.A. bylaws (which were modified at the time of the restructuring in October 2007) for potential losses arising from the Visa Litigation. The indemnification by the Visa U.S.A. member banks has no specific maximum amount. Using proceeds from its IPO and through reductions to the conversion ratio applicable to the Class B shares held by Visa U.S.A. member banks, Visa Inc. has funded an escrow account for the benefit of member financial institutions to fund their indemnification obligations associated with the Visa Litigation. The receivable related to the escrow account is classified in other liabilities as a direct offset to the related Visa Litigation contingent liability.

In October 2012, Visa signed a settlement agreement to resolve class action claims associated with the multi-district interchange litigation pending in the United States District Court for the Eastern District of New York (the “Multi-District Litigation”). The U.S. Court of Appeals for the Second Circuit reversed the approval of that settlement and remanded the matter to the district court. In September 2018, Visa signed a new settlement agreement, superseding the original settlement agreement, to resolve class action claims associated with the Multi-District Litigation. The new settlement is still subject to court approval.

Commitments to Extend Credit Commitments to extend credit are legally binding and generally have fixed expiration dates or other termination clauses. The contractual amount represents the Company’s exposure to credit loss, in the event of default by the borrower. The Company manages this credit risk by using the same credit policies it applies to loans. Collateral is obtained to secure commitments based on management’s credit assessment of the borrower. The collateral may include marketable securities, receivables, inventory, equipment and real estate. Since the Company expects many of the commitments to expire without being drawn, total commitment amounts do not necessarily represent the Company’s future liquidity requirements. In addition, the commitments include consumer credit lines that are cancelable upon notification to the consumer.

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The contract or notional amounts of unfunded commitments to extend credit at December 31, 2019, excluding those commitments considered derivatives, were as follows:

	Term
(Dollars in Millions)	Less Than One Year		Greater Than One Year		Total
Commercial and commercial real estate loans	$	31,235	$	108,303	$	139,538
Corporate and purchasing card loans(a)		29,296		–		29,296
Residential mortgages		416		1		417
Retail credit card loans(a)		111,773		–		111,773
Other retail loans		12,614		24,183		36,797
Other		6,325		–		6,325

(a) Primarily cancelable at the Company’s discretion.

Other Guarantees and Contingent Liabilities

The following table is a summary of other guarantees and contingent liabilities of the Company at December 31, 2019:

(Dollars in Millions)	Collateral Held		Carrying Amount		Maximum Potential Future Payments
Standby letters of credit	$	–	$	48	$	10,258
Third-party borrowing arrangements		–		–		7
Securities lending indemnifications		4,564		–		4,468
Asset sales		–		68		5,069
Merchant processing		589		61		108,875
Tender option bond program guarantee		2,994		–		2,725
Minimum revenue guarantees		–		–		3
Other		–		71		1,461

Letters of Credit Standby letters of credit are commitments the Company issues to guarantee the performance of a customer to a third party. The guarantees frequently support public and private borrowing arrangements, including commercial paper issuances, bond financings and other similar transactions. The Company also issues and confirms commercial letters of credit on behalf of customers to ensure payment or collection in connection with trade transactions. In the event of a customer’s or counterparty’s nonperformance, the Company’s credit loss exposure is similar to that in any extension of credit, up to the letter’s contractual amount. Management assesses the borrower’s credit to determine the necessary collateral, which may include marketable securities, receivables, inventory, equipment and real estate. Since the conditions requiring the Company to fund letters of credit may not occur, the Company

expects its liquidity requirements to be less than the total outstanding commitments. The maximum potential future payments guaranteed by the Company under standby letter of credit arrangements at December 31, 2019, were approximately $10.3 billion with a weighted-average term of approximately 21 months. The estimated fair value of standby letters of credit was approximately $48 million at December 31, 2019.

The contract or notional amount of letters of credit at December 31, 2019, were as follows:

	Term
(Dollars in Millions)	Less Than One Year		Greater Than One Year		Total
Standby	$	4,676	$	5,582	$	10,258
Commercial		339		28		367

Guarantees Guarantees are contingent commitments issued by the Company to customers or other third parties. The Company’s guarantees primarily include parent guarantees related to subsidiaries’ third-party borrowing arrangements; third-party performance guarantees inherent in the Company’s business operations, such as indemnified securities lending programs and merchant charge-back guarantees; and indemnification or buy-back provisions related to certain asset sales. For certain guarantees, the Company has recorded a liability related to the potential obligation, or has access to collateral to support the guarantee or through the exercise of other recourse provisions can offset some or all of the maximum potential future payments made under these guarantees.

Third-Party Borrowing Arrangements The Company provides guarantees to third parties as a part of certain subsidiaries’ borrowing arrangements. The maximum potential future payments guaranteed by the Company under these arrangements were approximately $7 million at December 31, 2019.

Commitments from Securities Lending The Company participates in securities lending activities by acting as the customer’s agent involving the loan of securities. The Company indemnifies customers for the difference between the fair value of the securities lent and the fair value of the collateral received. Cash collateralizes these transactions. The maximum potential future payments guaranteed by the Company under these arrangements were approximately $4.5 billion at December 31, 2019, and represent the fair value of the securities lent to third parties. At December 31, 2019, the Company held $4.6 billion of cash as collateral for these arrangements.

Asset Sales The Company has provided guarantees to certain third parties in connection with the sale or syndication of certain assets, primarily loan portfolios and tax-advantaged investments. These guarantees are generally in the form of asset buy-back or make-whole provisions that are triggered upon a credit event or a change in the tax-qualifying status of the related projects, as applicable, and remain in effect until the loans are collected or final tax credits are realized, respectively. The maximum potential

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future payments guaranteed by the Company under these arrangements were approximately $5.1 billion at December 31, 2019, and represented the proceeds received from the buyer or the guaranteed portion in these transactions where the buy-back or make-whole provisions have not yet expired. At December 31, 2019, the Company had reserved $68 million for potential losses related to the sale or syndication of tax-advantaged investments.

The maximum potential future payments do not include loan sales where the Company provides standard representation and warranties to the buyer against losses related to loan underwriting documentation defects that may have existed at the time of sale that generally are identified after the occurrence of a triggering event such as delinquency. For these types of loan sales, the maximum potential future payments is generally the unpaid principal balance of loans sold measured at the end of the current reporting period. Actual losses will be significantly less than the maximum exposure, as only a fraction of loans sold will have a representation and warranty breach, and any losses on repurchase would generally be mitigated by any collateral held against the loans.

The Company regularly sells loans to GSEs as part of its mortgage banking activities. The Company provides customary representations and warranties to GSEs in conjunction with these sales. These representations and warranties generally require the Company to repurchase assets if it is subsequently determined that a loan did not meet specified criteria, such as a documentation deficiency or rescission of mortgage insurance. If the Company is unable to cure or refute a repurchase request, the Company is generally obligated to repurchase the loan or otherwise reimburse the GSE for losses. At December 31, 2019, the Company had reserved $9 million for potential losses from representation and warranty obligations, compared with $10 million at December 31, 2018. The Company’s reserve reflects management’s best estimate of losses for representation and warranty obligations. The Company’s repurchase reserve is modeled at the loan level, taking into consideration the individual credit quality and borrower activity that has transpired since origination. The model applies credit quality and economic risk factors to derive a probability of default and potential repurchase that are based on the Company’s historical loss experience, and estimates loss severity based on expected collateral value. The Company also considers qualitative factors that may result in anticipated losses differing from historical loss trends.

As of December 31, 2019 and 2018, the Company had $10 million and $15 million, respectively, of unresolved representation and warranty claims from GSEs. The Company does not have a significant amount of unresolved claims from investors other than GSEs.

Merchant Processing The Company, through its subsidiaries, provides merchant processing services. Under the rules of credit card associations, a merchant processor retains a contingent liability for credit card transactions processed. This contingent liability arises in the event of a billing dispute between the merchant and a cardholder that is ultimately resolved in the cardholder’s favor. In this situation, the transaction is “charged-

back” to the merchant and the disputed amount is credited or otherwise refunded to the cardholder. If the Company is unable to collect this amount from the merchant, it bears the loss for the amount of the refund paid to the cardholder.

A cardholder, through its issuing bank, generally has until the later of up to four months after the date the transaction is processed or the receipt of the product or service to present a charge-back to the Company as the merchant processor. The absolute maximum potential liability is estimated to be the total volume of credit card transactions that meet the associations’ requirements to be valid charge-back transactions at any given time. Management estimates that the maximum potential exposure for charge-backs would approximate the total amount of merchant transactions processed through the credit card associations for the last four months. For the last four months of 2019 this amount totaled approximately $108.9 billion. In most cases, this contingent liability is unlikely to arise, as most products and services are delivered when purchased and amounts are refunded when items are returned to merchants. However, where the product or service has been purchased but is not provided until a future date (“future delivery”), the potential for this contingent liability increases. To mitigate this risk, the Company may require the merchant to make an escrow deposit, place maximum volume limitations on future delivery transactions processed by the merchant at any point in time, or require various credit enhancements (including letters of credit and bank guarantees). Also, merchant processing contracts may include event triggers to provide the Company more financial and operational control in the event of financial deterioration of the merchant.

The Company currently processes card transactions in the United States, Canada, Europe and Mexico through wholly-owned subsidiaries and a network of other financial institutions. In the event a merchant was unable to fulfill product or services subject to future delivery, such as airline tickets, the Company could become financially liable for refunding the purchase price of such products or services purchased through the credit card associations under the charge-back provisions. Charge-back risk related to these merchants is evaluated in a manner similar to credit risk assessments and, as such, merchant processing contracts contain various provisions to protect the Company in the event of default. At December 31, 2019, the value of airline tickets purchased to be delivered at a future date through card transactions processed by the Company was $8.3 billion. The Company held collateral of $496 million in escrow deposits, letters of credit and indemnities from financial institutions, and liens on various assets. In addition to specific collateral or other credit enhancements, the Company maintains a liability for its implied guarantees associated with future delivery. At December 31, 2019, the liability was $44 million primarily related to these airline processing arrangements.

In the normal course of business, the Company has unresolved charge-backs. The Company assesses the likelihood of its potential liability based on the extent and nature of unresolved charge-backs and its historical loss experience. At

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December 31, 2019, the Company held $89 million of merchant escrow deposits as collateral and had a recorded liability for potential losses of $17 million.

Tender Option Bond Program Guarantee As discussed in Note 7, the Company sponsors a municipal bond securities tender option bond program and consolidates the program’s entities on its Consolidated Balance Sheet. The Company provides financial performance guarantees related to the program’s entities. At December 31, 2019, the Company guaranteed $2.7 billion of borrowings of the program’s entities, included on the Consolidated Balance Sheet in short-term borrowings. The Company also included on its Consolidated Balance Sheet the related $3.0 billion of available-for-sale investment securities serving as collateral for this arrangement.

Minimum Revenue Guarantees In the normal course of business, the Company may enter into revenue share agreements with third-party business partners who generate customer referrals or provide marketing or other services related to the generation of revenue. In certain of these agreements, the Company may guarantee that a minimum amount of revenue share payments will be made to the third party over a specified period of time. At December 31, 2019, the maximum potential future payments required to be made by the Company under these agreements were $3 million.

Other Guarantees and Commitments As of December 31, 2019, the Company sponsored, and owned 100 percent of the common equity of, USB Capital IX, a wholly-owned unconsolidated trust, formed for the purpose of issuing redeemable Income Trust Securities (“ITS”) to third-party investors, originally investing the proceeds in junior subordinated debt securities (“Debentures”) issued by the Company and entering into stock purchase contracts to purchase the Company’s preferred stock in the future. As of December 31, 2019, all of the Debentures issued by the Company have either matured or been retired. Total assets of USB Capital IX were $682 million at December 31, 2019, consisting primarily of the Company’s Series A Preferred Stock. The Company’s obligations under the transaction documents, taken together, have the effect of providing a full and unconditional guarantee by the Company, on a junior subordinated basis, of the payment obligations of the trust to third-party investors totaling $681 million at December 31, 2019.

The Company has also made other financial performance guarantees and commitments primarily related to the operations of its subsidiaries. At December 31, 2019, the maximum potential future payments guaranteed or committed by the Company under these arrangements were approximately $781 million.

Litigation and Regulatory Matters

The Company is subject to various litigation and regulatory matters that arise in the ordinary course of its business. The Company establishes reserves for such matters when potential losses become probable and can be reasonably estimated. The

Company believes the ultimate resolution of existing legal and regulatory matters will not have a material adverse effect on the financial condition, results of operations or cash flows of the Company. However, in light of the uncertainties inherent in these matters, it is possible that the ultimate resolution of one or more of these matters may have a material adverse effect on the Company’s results from operations for a particular period, and future changes in circumstances or additional information could result in additional accruals or resolution in excess of established accruals, which could adversely affect the Company’s results from operations, potentially materially.

Residential Mortgage-Backed Securities Litigation Starting in 2011, the Company and other large financial institutions have been sued in their capacity as trustee for residential mortgage–backed securities trusts. In the lawsuits brought against the Company, the investors allege that the Company’s banking subsidiary, U.S. Bank National Association (“U.S. Bank”), as trustee caused them to incur substantial losses by failing to enforce loan repurchase obligations and failing to abide by appropriate standards of care after events of default allegedly occurred. The plaintiffs in these matters seek monetary damages in unspecified amounts and most also seek equitable relief.

Regulatory Matters The Company is continually subject to examinations, inquiries and investigations in areas of heightened regulatory scrutiny, such as compliance, risk management, third-party risk management and consumer protection. For example, the Company is currently subject to examinations, inquiries and investigations by government agencies and bank regulators concerning mortgage-related practices, including those related to lender-placed insurance, and notices and filings in bankruptcy cases. The Company is cooperating fully with all pending examinations, inquiries and investigations, any of which could lead to administrative or legal proceedings or settlements. Remedies in these proceedings or settlements may include fines, penalties, restitution or alterations in the Company’s business practices (which may increase the Company’s operating expenses and decrease its revenue).

In February 2018, the Company entered into a deferred prosecution agreement (the “DPA”) with the United States Attorney’s Office in Manhattan that resolved its investigation of the Company concerning a legacy banking relationship between U.S. Bank and payday lending businesses associated with a former customer and U.S. Bank’s legacy Bank Secrecy Act/anti-money laundering compliance program. The DPA deferred prosecution for a period of two years, subject to the Company’s compliance with its terms, which included ongoing efforts to implement and maintain an adequate Bank Secrecy Act/anti-money laundering compliance program. The United States Attorney’s Office filed a motion to dismiss all charges under the DPA with the United States District Court for the Southern District of New York and that motion was granted by the court on February 13, 2020.

In related actions taken in February 2018, the Company and one of its affiliates entered into a regulatory settlement with the

134    

Board of Governors of the Federal Reserve System (the “Federal Reserve”) and U.S. Bank entered into a regulatory settlement with the Financial Crimes Enforcement Network (“FinCEN”). In December 2019, the Federal Reserve terminated the order that it had entered into with the Company and its affiliate and thereby terminated the ongoing obligations under that settlement. Additionally, U.S. Bank’s ongoing obligations under its settlement agreement with FinCEN will expire on February 22, 2020, in accordance with the terms of that agreement.

Outlook Due to their complex nature, it can be years before litigation and regulatory matters are resolved. The Company may be unable to develop an estimate or range of loss where matters are in early stages, there are significant factual or legal issues to

be resolved, damages are unspecified or uncertain, or there is uncertainty as to a litigation class being certified or the outcome of pending motions, appeals or proceedings. For those litigation and regulatory matters where the Company has information to develop an estimate or range of loss, the Company believes the upper end of the range of reasonably possible losses in aggregate, in excess of any reserves established for matters where a loss is considered probable, will not be material to its financial condition, results of operations or cash flows. The Company’s estimates are subject to significant judgment and uncertainties, and the matters underlying the estimates will change from time to time. Actual results may vary significantly from the current estimates.

135    

  NOTE 23   Business Segments  

Within the Company, financial performance is measured by major lines of business based on the products and services provided to customers through its distribution channels. These operating segments are components of the Company about which financial information is prepared and is evaluated regularly by management in deciding how to allocate resources and assess performance. The Company has five reportable operating segments:

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

Consumer and Business Banking Consumer and Business Banking delivers products and services through banking offices, telephone servicing and sales, on-line services, direct mail, ATM processing and mobile devices. It encompasses community banking, metropolitan banking and indirect lending, as well as mortgage banking.

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

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

Treasury and Corporate Support Treasury and Corporate Support includes the Company’s investment portfolios, funding, capital management, interest rate risk management, income taxes not allocated to business segments, including most investments in tax-advantaged projects, and the residual aggregate of those expenses associated with corporate activities that are managed on a consolidated basis.

Basis of Presentation Business segment results are derived from the Company’s business unit profitability reporting systems by specifically attributing managed balance sheet assets, deposits and other liabilities and their related income or expense. The allowance for credit losses and related provision expense are allocated to the business segments based on the related loan balances managed. Goodwill and other intangible assets are assigned to the business segments based on the mix of business of an entity acquired by the Company. Within the Company, capital levels are evaluated and managed centrally; however,

capital is allocated to the business segments to support evaluation of business performance. Business segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements. Generally, the determination of the amount of capital allocated to each business segment includes credit and operational capital allocations following a Basel III regulatory framework. Interest income and expense is determined based on the assets and liabilities managed by the business segment. Because funding and asset liability management is a central function, funds transfer-pricing methodologies are utilized to allocate a cost of funds used or credit for funds provided to all business segment assets and liabilities, respectively, using a matched funding concept. Also, each business unit is allocated the taxable-equivalent benefit of tax-exempt products. The residual effect on net interest income of asset/liability management activities is included in Treasury and Corporate Support. Noninterest income and expenses directly managed by each business segment, including fees, service charges, salaries and benefits, and other direct revenues and costs are accounted for within each segment’s financial results in a manner similar to the consolidated financial statements. Occupancy costs are allocated based on utilization of facilities by the business segments. Generally, operating losses are charged to the business segment when the loss event is realized in a manner similar to a loan charge-off. Noninterest expenses incurred by centrally managed operations or business segments that directly support another business segment’s operations are charged to the applicable business segment based on its utilization of those services, primarily measured by the volume of customer activities, number of employees or other relevant factors. These allocated expenses are reported as net shared services expense within noninterest expense. Certain activities that do not directly support the operations of the business segments or for which the business segments are not considered financially accountable in evaluating their performance are not charged to the business segments. The income or expenses associated with these corporate activities is reported within the Treasury and Corporate Support business segment. Income taxes are assessed to each business segment at a standard tax rate with the residual tax expense or benefit to arrive at the consolidated effective tax rate included in Treasury and Corporate Support.

Designations, assignments and allocations change from time to time as management systems are enhanced, methods of evaluating performance or product lines change or business segments are realigned to better respond to the Company’s diverse customer base. During 2019, certain organization and methodology changes were made and, accordingly, 2018 results were restated and presented on a comparable basis.

136    

Business segment results for the years ended December 31 were as follows:

	Corporate and Commercial Banking						Consumer and Business Banking						Wealth Management and Investment Services
Year Ended December 31 (Dollars in Millions)	2019			2018			2019			2018			2019			2018
Condensed Income Statement
Net interest income (taxable-equivalent basis)	$	2,871		$	2,936		$	6,261		$	6,156		$	1,157		$	1,131
Noninterest income		867			843			2,387			2,316			1,799			1,748
Securities gains (losses), net		–			–			–			–			–			–
Total net revenue		3,738			3,779			8,648			8,472			2,956			2,879
Noninterest expense		1,607			1,591			5,285			5,232			1,752			1,778
Other intangibles		4			4			20			27			13			16
Total noninterest expense		1,611			1,595			5,305			5,259			1,765			1,794
Income before provision and income taxes		2,127			2,184			3,343			3,213			1,191			1,085
Provision for credit losses		78			65			310			232			(3	)		(2	)
Income before income taxes		2,049			2,119			3,033			2,981			1,194			1,087
Income taxes and taxable-equivalent adjustment		513			531			759			745			299			273
Net income		1,536			1,588			2,274			2,236			895			814
Net (income) loss attributable to noncontrolling interests		–			–			–			–			–			–
Net income attributable to U.S. Bancorp	$	1,536		$	1,588		$	2,274		$	2,236		$	895		$	814
Average Balance Sheet
Loans	$	96,608		$	93,854		$	144,595		$	140,875		$	10,080		$	9,364
Other earning assets		3,751			3,072			3,989			3,501			282			184
Goodwill		1,647			1,647			3,475			3,604			1,617			1,618
Other intangible assets		8			11			2,617			2,953			49			63
Assets		106,716			102,801			158,884			155,267			13,330			12,437
Noninterest-bearing deposits		29,152			32,938			27,876			27,691			13,195			14,006
Interest-bearing deposits		72,780			69,913			129,289			124,934			62,031			56,000
Total deposits		101,932			102,851			157,165			152,625			75,226			70,006
Total U.S. Bancorp shareholders’ equity		10,399			10,463			11,713			11,812			2,525			2,476
	Payment Services						Treasury and Corporate Support						Consolidated Company
Year Ended December 31 (Dollars in Millions)	2019			2018			2019			2018			2019			2018
Condensed Income Statement
Net interest income (taxable-equivalent basis)	$	2,493		$	2,443		$	373		$	369		$	13,155		$	13,035
Noninterest income		3,707	(a)		3,599	(a)		998			1,066			9,758	(b)		9,572	(b)
Securities gains (losses), net		–			–			73			30			73			30
Total net revenue		6,200			6,042			1,444			1,465			22,986			22,637
Noninterest expense		2,940			2,859			1,033			843			12,617			12,303
Other intangibles		131			114			–			–			168			161
Total noninterest expense		3,071			2,973			1,033			843			12,785			12,464
Income before provision and income taxes		3,129			3,069			411			622			10,201			10,173
Provision for credit losses		1,108			1,081			11			3			1,504			1,379
Income before income taxes		2,021			1,988			400			619			8,697			8,794
Income taxes and taxable-equivalent adjustment		505			497			(325	)		(376	)		1,751			1,670
Net income		1,516			1,491			725			995			6,946			7,124
Net (income) loss attributable to noncontrolling interests		–			–			(32	)		(28	)		(32	)		(28	)
Net income attributable to U.S. Bancorp	$	1,516		$	1,491		$	693		$	967		$	6,914		$	7,096
Average Balance Sheet
Loans	$	33,566		$	31,102		$	5,837		$	5,506		$	290,686		$	280,701
Other earning assets		348			291			131,481			127,318			139,851			134,366
Goodwill		2,839			2,570			–			–			9,578			9,439
Other intangible assets		538			406			–			–			3,212			3,433
Assets		39,743			36,912			156,980			149,597			475,653			457,014
Noninterest-bearing deposits		1,205			1,099			2,435			2,462			73,863			78,196
Interest-bearing deposits		115			110			8,734			4,309			272,949			255,266
Total deposits		1,320			1,209			11,169			6,771			346,812			333,462
Total U.S. Bancorp shareholders’ equity		7,084			6,629			20,902			18,383			52,623			49,763

(a) Presented net of related rewards and rebate costs and certain partner payments of $2.2 billion for 2019 and 2018.

(b) Includes revenue generated from certain contracts with customers of $7.3 billion and $7.4 billion for 2019 and 2018, respectively.

137    

  NOTE 24   U.S. Bancorp (Parent Company)  

Condensed Balance Sheet

At December 31 (Dollars in Millions)	2019		2018
Assets
Due from banks, principally interest-bearing	$	11,583	$	9,969
Available-for-sale securities		1,631		921
Investments in bank subsidiaries		48,518		47,549
Investments in nonbank subsidiaries		3,128		2,568
Advances to bank subsidiaries		3,850		3,800
Advances to nonbank subsidiaries		1,465		2,543
Other assets		1,211		813
Total assets	$	71,386	$	68,163
Liabilities and Shareholders’ Equity
Short-term funds borrowed	$	8	$	–
Long-term debt		18,602		16,291
Other liabilities		923		843
Shareholders’ equity		51,853		51,029
Total liabilities and shareholders’ equity	$	71,386	$	68,163

Condensed Income Statement

Year Ended December 31 (Dollars in Millions)	2019			2018			2017
Income
Dividends from bank subsidiaries	$	7,100		$	5,300		$	4,800
Dividends from nonbank subsidiaries		6			6			5
Interest from subsidiaries		317			220			159
Other income		25			33			41
Total income		7,448			5,559			5,005
Expense
Interest expense		551			471			402
Other expense		140			133			124
Total expense		691			604			526
Income before income taxes and equity in undistributed income of subsidiaries		6,757			4,955			4,479
Applicable income taxes		(92	)		(91	)		(176	)
Income of parent company		6,849			5,046			4,655
Equity in undistributed income of subsidiaries		65			2,050			1,563
Net income attributable to U.S. Bancorp	$	6,914		$	7,096		$	6,218

138    

Condensed Statement of Cash Flows

Year Ended December 31 (Dollars in Millions)	2019			2018			2017
Operating Activities
Net income attributable to U.S. Bancorp	$	6,914		$	7,096		$	6,218
Adjustments to reconcile net income to net cash provided by operating activities
Equity in undistributed income of subsidiaries		(65	)		(2,050	)		(1,563	)
Other, net		231			359			(125	)
Net cash provided by operating activities		7,080			5,405			4,530
Investing Activities
Proceeds from sales and maturities of investment securities		291			39			100
Purchases of investment securities		(1,013	)		(10	)		(844	)
Net (increase) decrease in short-term advances to subsidiaries		578			(488	)		(790	)
Long-term advances to subsidiaries		(2,600	)		(500	)		–
Principal collected on long-term advances to subsidiaries		2,550			–			500
Other, net		(341	)		304			(12	)
Net cash used in investing activities		(535	)		(655	)		(1,046	)
Financing Activities
Net increase (decrease) in short-term borrowings		8			(1	)		(21	)
Proceeds from issuance of long-term debt		3,743			2,100			3,920
Principal payments or redemption of long-term debt		(1,500	)		(1,500	)		(1,250	)
Proceeds from issuance of preferred stock		–			565			993
Proceeds from issuance of common stock		88			86			159
Repurchase of preferred stock		–			–			(1,085	)
Repurchase of common stock		(4,525	)		(2,822	)		(2,631	)
Cash dividends paid on preferred stock		(302	)		(274	)		(284	)
Cash dividends paid on common stock		(2,443	)		(2,092	)		(1,928	)
Net cash used in financing activities		(4,931	)		(3,938	)		(2,127	)
Change in cash and due from banks		1,614			812			1,357
Cash and due from banks at beginning of year		9,969			9,157			7,800
Cash and due from banks at end of year	$	11,583		$	9,969		$	9,157

Transfer of funds (dividends, loans or advances) from bank subsidiaries to the Company is restricted. Federal law requires loans to the Company or its affiliates to be secured and generally limits loans to the Company or an individual affiliate to 10 percent of each bank’s unimpaired capital and surplus. In the aggregate, loans to the Company and all affiliates cannot exceed 20 percent of each bank’s unimpaired capital and surplus.

Dividend payments to the Company by its subsidiary bank are subject to regulatory review and statutory limitations and, in some instances, regulatory approval. In general, dividends by the Company’s bank subsidiary to the parent company are limited by rules which compare dividends to net income for regulatorily-defined periods. Furthermore, dividends are restricted by minimum capital constraints for all national banks. 

  NOTE 25   Subsequent Events

The Company has evaluated the impact of events that have occurred subsequent to December 31, 2019 through the date the consolidated financial statements were filed with the United States Securities and Exchange Commission. Based on this

evaluation, the Company has determined none of these events were required to be recognized or disclosed in the consolidated financial statements and related notes.

139    

U.S. Bancorp

Consolidated Balance Sheet—Five Year Summary (Unaudited)

At December 31 (Dollars in Millions)	2019			2018			2017			2016			2015			% Change 2019 v 2018
Assets
Cash and due from banks	$	22,405		$	21,453		$	19,505		$	15,705		$	11,147			4.4	%
Held-to-maturity securities		–			46,050			44,362			42,991			43,590			*
Available-for-sale securities		122,613			66,115			68,137			66,284			61,997			85.5
Loans held for sale		5,578			2,056			3,554			4,826			3,184			*
Loans		296,102			286,810			280,432			273,207			260,849			3.2
Less allowance for loan losses		(4,020	)		(3,973	)		(3,925	)		(3,813	)		(3,863	)		(1.2	)
Net loans		292,082			282,837			276,507			269,394			256,986			3.3
Other assets		52,748			48,863			49,975			46,764			44,949			8.0
Total assets	$	495,426		$	467,374		$	462,040		$	445,964		$	421,853			6.0
Liabilities and Shareholders’ Equity
Deposits
Noninterest-bearing	$	75,590		$	81,811		$	87,557		$	86,097		$	83,766			(7.6	)%
Interest-bearing		286,326			263,664			259,658			248,493			216,634			8.6
Total deposits		361,916			345,475			347,215			334,590			300,400			4.8
Short-term borrowings		23,723			14,139			16,651			13,963			27,877			67.8
Long-term debt		40,167			41,340			32,259			33,323			32,078			(2.8	)
Other liabilities		17,137			14,763			16,249			16,155			14,681			16.1
Total liabilities		442,943			415,717			412,374			398,031			375,036			6.5
Total U.S. Bancorp shareholders’ equity		51,853			51,029			49,040			47,298			46,131			1.6
Noncontrolling interests		630			628			626			635			686			.3
Total equity		52,483			51,657			49,666			47,933			46,817			1.6
Total liabilities and equity	$	495,426		$	467,374		$	462,040		$	445,964		$	421,853			6.0

* Not meaningful

140    

U.S. Bancorp

Consolidated Statement of Income — Five-Year Summary (Unaudited)

Year Ended December 31 (Dollars in Millions)	2019			2018			2017			2016			2015			% Change 2019 v 2018
Interest Income
Loans	$	14,099		$	13,120		$	11,788		$	10,777		$	10,034			7.5	%
Loans held for sale		162			165			144			154			206			(1.8	)
Investment securities		2,893			2,616			2,232			2,078			2,001			10.6
Other interest income		340			272			182			125			136			25.0
Total interest income		17,494			16,173			14,346			13,134			12,377			8.2
Interest Expense
Deposits		2,855			1,869			1,041			622			457			52.8
Short-term borrowings		360			378			141			92			70			(4.8	)
Long-term debt		1,227			1,007			784			754			699			21.8
Total interest expense		4,442			3,254			1,966			1,468			1,226			36.5
Net interest income		13,052			12,919			12,380			11,666			11,151			1.0
Provision for credit losses		1,504			1,379			1,390			1,324			1,132			9.1
Net interest income after provision for credit losses		11,548			11,540			10,990			10,342			10,019			.1
Noninterest Income
Credit and debit card revenue		1,413			1,401			1,289			1,206			1,095			.9
Corporate payment products revenue		664			644			575			541			533			3.1
Merchant processing services		1,601			1,531			1,486			1,498			1,468			4.6
Trust and investment management fees		1,673			1,619			1,522			1,427			1,321			3.3
Deposit service charges		909			1,070			1,035			983			942			(15.0	)
Treasury management fees		578			594			618			583			561			(2.7	)
Commercial products revenue		934			895			954			971			918			4.4
Mortgage banking revenue		874			720			834			979			906			21.4
Investment products fees		186			188			173			169			197			(1.1	)
Securities gains (losses), net		73			30			57			22			–			*
Other		926			910			774			911			877			1.8
Total noninterest income		9,831			9,602			9,317			9,290			8,818			2.4
Noninterest Expense
Compensation		6,325			6,162			5,746			5,212			4,812			2.6
Employee benefits		1,286			1,231			1,134			1,008			970			4.5
Net occupancy and equipment		1,123			1,063			1,019			988			991			5.6
Professional services		454			407			419			502			423			11.5
Marketing and business development		426			429			542			435			360			(.7	)
Technology and communications		1,095			978			903			877			816			12.0
Postage, printing and supplies		290			324			323			311			297			(10.5	)
Other intangibles		168			161			175			179			174			4.3
Other		1,618			1,709			2,529			2,015			1,964			(5.3	)
Total noninterest expense		12,785			12,464			12,790			11,527			10,807			2.6
Income before income taxes		8,594			8,678			7,517			8,105			8,030			(1.0	)
Applicable income taxes		1,648			1,554			1,264			2,161			2,097			6.0
Net income		6,946			7,124			6,253			5,944			5,933			(2.5	)
Net (income) loss attributable to noncontrolling interests		(32	)		(28	)		(35	)		(56	)		(54	)		(14.3	)
Net income attributable to U.S. Bancorp	$	6,914		$	7,096		$	6,218		$	5,888		$	5,879			(2.6	)
Net income applicable to U.S. Bancorp common shareholders	$	6,583		$	6,784		$	5,913		$	5,589		$	5,608			(3.0	)

* Not meaningful

141    

U.S. Bancorp

Quarterly Consolidated Financial Data (Unaudited)

	2019												2018
(Dollars in Millions, Except Per Share Data)	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			First Quarter			Second Quarter			Third Quarter			Fourth Quarter
Interest Income
Loans	$	3,540		$	3,582		$	3,555		$	3,422		$	3,095		$	3,197		$	3,353		$	3,475
Loans held for sale		25			34			48			55			33			39			36			57
Investment securities		705			745			734			709			613			653			661			689
Other interest income		81			90			100			69			50			59			73			90
Total interest income		4,351			4,451			4,437			4,255			3,791			3,948			4,123			4,311
Interest Expense
Deposits		695			762			744			654			345			427			491			606
Short-term borrowings		93			91			97			79			75			86			104			113
Long-term debt		304			293			315			315			203			238			277			289
Total interest expense		1,092			1,146			1,156			1,048			623			751			872			1,008
Net interest income		3,259			3,305			3,281			3,207			3,168			3,197			3,251			3,303
Provision for credit losses		377			365			367			395			341			327			343			368
Net interest income after provision for credit losses		2,882			2,940			2,914			2,812			2,827			2,870			2,908			2,935
Noninterest Income
Credit and debit card revenue		304			365			366			378			324			351			344			382
Corporate payment products revenue		162			167			177			158			154			158			169			163
Merchant processing services		378			404			410			409			363			387			392			389
Trust and investment management fees		399			415			421			438			398			401			411			409
Deposit service charges		217			227			234			231			261			273			283			253
Treasury management fees		146			153			139			140			150			155			146			143
Commercial products revenue		219			249			240			226			220			234			216			225
Mortgage banking revenue		169			189			272			244			184			191			174			171
Investment products fees		45			47			46			48			46			47			47			48
Securities gains (losses), net		5			17			25			26			5			10			10			5
Other		247			257			284			138			167			207			226			310
Total noninterest income		2,291			2,490			2,614			2,436			2,272			2,414			2,418			2,498
Noninterest Expense
Compensation		1,559			1,574			1,595			1,597			1,523			1,542			1,529			1,568
Employee benefits		333			314			324			315			330			299			294			308
Net occupancy and equipment		277			281			279			286			265			262			270			266
Professional services		95			106			114			139			83			95			96			133
Marketing and business development		89			111			109			117			97			111			106			115
Technology and communications		257			270			277			291			235			242			247			254
Postage, printing and supplies		72			73			74			71			80			80			84			80
Other intangibles		40			42			42			44			39			40			41			41
Other		365			382			330			541			403			414			377			515
Total noninterest expense		3,087			3,153			3,144			3,401			3,055			3,085			3,044			3,280
Income before income taxes		2,086			2,277			2,384			1,847			2,044			2,199			2,282			2,153
Applicable income taxes		378			449			467			354			362			441			460			291
Net income		1,708			1,828			1,917			1,493			1,682			1,758			1,822			1,862
Net (income) loss attributable to noncontrolling interests		(9	)		(7	)		(9	)		(7	)		(7	)		(8	)		(7	)		(6	)
Net income attributable to U.S. Bancorp	$	1,699		$	1,821		$	1,908		$	1,486		$	1,675		$	1,750		$	1,815		$	1,856
Net income applicable to U.S. Bancorp common shareholders	$	1,613		$	1,741		$	1,821		$	1,408		$	1,597		$	1,678		$	1,732		$	1,777
Earnings per common share	$	1.01		$	1.09		$	1.16		$	.91		$	.97		$	1.02		$	1.06		$	1.10
Diluted earnings per common share	$	1.00		$	1.09		$	1.15		$	.90		$	.96		$	1.02		$	1.06		$	1.10

142    

U.S. Bancorp

Supplemental Financial Data (Unaudited)

Earnings Per Common Share Summary	2019			2018			2017			2016			2015
Earnings per common share	$	4.16		$	4.15		$	3.53		$	3.25		$	3.18
Diluted earnings per common share		4.16			4.14			3.51			3.24			3.16
Dividends declared per common share		1.58			1.34			1.16			1.07			1.01
Ratios
Return on average assets		1.45	%		1.55	%		1.39	%		1.36	%		1.44	%
Return on average common equity		14.1			15.4			13.8			13.4			14.0
Average total U.S. Bancorp shareholders’ equity to average assets		11.1			10.9			10.8			10.9			11.0
Dividends per common share to net income per common share		38.0			32.3			32.9			32.9			31.8
Other Statistics (Dollars and Shares in Millions)
Common shares outstanding(a)		1,534			1,608			1,656			1,697			1,745
Average common shares outstanding and common stock equivalents
Earnings per common share		1,581			1,634			1,677			1,718			1,764
Diluted earnings per common share		1,583			1,638			1,683			1,724			1,772
Number of shareholders(b)		33,515			35,154			36,841			38,794			40,666
Common dividends declared	$	2,493		$	2,190		$	1,950		$	1,842		$	1,785

(a) Defined as total common shares less common stock held in treasury at December 31.

(b) Based on number of common stock shareholders of record at December 31.

The common stock of U.S. Bancorp is traded on the New York Stock Exchange, under the ticker symbol “USB.” At January 31, 2020, there were 33,410 holders of record of the Company’s common stock.

Stock Performance Chart

The following chart compares the cumulative total shareholder return on the Company’s common stock during the five years ended December 31, 2019, with the cumulative total return on the Standard & Poor’s 500 Index and the KBW Bank Index. The comparison assumes $100 was invested on December 31, 2014, in the Company’s common stock and in each of the foregoing indices and assumes the reinvestment of all dividends. The comparisons in the graph are based upon historical data and are not indicative of, nor intended to forecast, future performance of the Company’s common stock.

    

143    

U.S. Bancorp

Consolidated Daily Average Balance Sheet and Related Yields and Rates (a) (Unaudited)

	2019								2018
Year Ended December 31 (Dollars in Millions)	Average Balances			Interest		Yields and Rates			Average Balances			Interest		Yields and Rates
Assets
Investment securities	$	117,150		$	2,950		2.52	%	$	113,940		$	2,674		2.35	%
Loans held for sale		3,769			162		4.30			3,230			165		5.12
Loans(b)
Commercial		103,198			4,229		4.10			98,854			3,795		3.84
Commercial real estate		39,386			1,919		4.87			39,977			1,881		4.71
Residential mortgages		67,747			2,644		3.90			61,893			2,366		3.82
Credit card		23,309			2,680		11.50			21,672			2,545		11.74
Other retail		57,046			2,682		4.70			56,136			2,466		4.39
Covered loans		—			—		—			2,169			134		6.17
Total loans		290,686			14,154		4.87			280,701			13,187		4.70
Other earning assets		18,932			341		1.80			17,196			272		1.58
Total earning assets		430,537			17,607		4.09			415,067			16,298		3.93
Allowance for loan losses		(4,007	)							(3,939	)
Unrealized gain (loss) on investment securities		(117	)							(1,650	)
Other assets		49,240								47,536
Total assets	$	475,653							$	457,014
Liabilities and Shareholders’ Equity
Noninterest-bearing deposits	$	73,863							$	78,196
Interest-bearing deposits
Interest checking		72,553			227		.31			70,154			150		.21
Money market savings		109,849			1,637		1.49			101,732			1,078		1.06
Savings accounts		46,130			111		.24			44,713			56		.13
Time deposits		44,417			880		1.98			38,667			585		1.51
Total interest-bearing deposits		272,949			2,855		1.05			255,266			1,869		.73
Short-term borrowings		18,137			370		2.04			21,790			387		1.78
Long-term debt		41,572			1,227		2.95			37,450			1,007		2.69
Total interest-bearing liabilities		332,658			4,452		1.34			314,506			3,263		1.04
Other liabilities		15,880					.			13,921
Shareholders’ equity
Preferred equity		5,984								5,636
Common equity		46,639								44,127
Total U.S. Bancorp shareholders’ equity		52,623								49,763
Noncontrolling interests		629								628
Total equity		53,252								50,391
Total liabilities and equity	$	475,653							$	457,014
Net interest income				$	13,155							$	13,035
Gross interest margin							2.75	%							2.89	%
Gross interest margin without taxable-equivalent increments							2.73	%							2.86	%
Percent of Earning Assets
Interest income							4.09	%							3.93	%
Interest expense							1.03								.79
Net interest margin							3.06	%							3.14	%
Net interest margin without taxable-equivalent increments							3.04	%							3.11	%

* Not meaningful

(a) Interest and rates are presented on a fully taxable-equivalent basis based on a federal income tax rate of 21 percent for 2019 and 2018 and 35 percent for 2017, 2016 and 2015.

(b) Interest income and rates on loans include loan fees. Nonaccrual loans are included in average loan balances.

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2017								2016								2015								2019 v 2018
Average Balances			Interest		Yields and Rates			Average Balances			Interest		Yields and Rates			Average Balances			Interest		Yields and Rates			% Change Average Balances
$	111,820		$	2,328		2.08	%	$	107,922		$	2,181		2.02	%	$	103,161		$	2,120		2.06	%		2.8	%
	3,574			144		4.04			4,181			154		3.70			5,784			206		3.56			16.7
	95,904			3,131		3.26			92,043			2,596		2.82			84,083			2,281		2.71			4.4
	42,077			1,788		4.25			43,040			1,698		3.94			42,415			1,650		3.89			(1.5	)
	58,784			2,180		3.71			55,682			2,070		3.72			51,840			1,966		3.79			9.5
	20,906			2,358		11.28			20,490			2,204		10.76			18,057			1,944		10.77			7.6
	55,416			2,272		4.10			52,330			2,114		4.04			49,079			2,020		4.12			1.6
	3,450			175		5.07			4,226			200		4.73			4,985			271		5.42			*
	276,537			11,904		4.30			267,811			10,882		4.06			250,459			10,132		4.05			3.6
	14,490			183		1.26			9,963			125		1.26			8,041			136		1.69			10.1
	406,421			14,559		3.58			389,877			13,342		3.42			367,445			12,594		3.43			3.7
	(3,862	)							(3,837	)							(4,035	)							(1.7	)
	(348	)							593								710								92.9
	46,371								46,680								44,745								3.6
$	448,582							$	433,313							$	408,865								4.1
$	81,933							$	81,176							$	79,203								(5.5	)%
	67,953			84		.12			61,726			42		.07			55,974			30		.05			3.4
	106,476			644		.61			96,518			349		.36			79,266			192		.24			8.0
	43,393			32		.07			40,382			34		.09			37,150			40		.11			3.2
	33,759			281		.83			33,008			197		.60			35,558			195		.55			14.9
	251,581			1,041		.41			231,634			622		.27			207,948			457		.22			6.9
	15,022			149		1.00			19,906			97		.49			27,960			74		.27			(16.8	)
	35,601			784		2.20			36,220			754		2.08			33,566			699		2.08			11.0
	302,204			1,974		.65			287,760			1,473		.51			269,474			1,230		.46			5.8
	15,348								16,389								14,686								14.1
	5,490								5,501								4,836								6.2
	42,976								41,838								39,977								5.7
	48,466								47,339								44,813								5.7
	631								649								689								.2
	49,097								47,988								45,502								5.7
$	448,582							$	433,313							$	408,865								4.1
			$	12,585							$	11,869							$	11,364
						2.93	%							2.91	%							2.97	%
						2.88	%							2.86	%							2.91	%
						3.58	%							3.42	%							3.43	%
						.48								.38								.34
						3.10	%							3.04	%							3.09	%
						3.05	%							2.99	%							3.03	%

145    

Company Information

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

U.S. Bancorp’s banking subsidiary, U.S. Bank National Association, is engaged in the general banking business, principally in domestic markets. U.S. Bank National Association, with $374 billion in deposits at December 31, 2019, provides a wide range of products and services to individuals, businesses, institutional organizations, governmental entities and other financial institutions. Commercial and consumer lending services are principally offered to customers within the Company’s domestic markets, to domestic customers with foreign operations and to large national customers operating in specific industries targeted by the Company. Lending services include traditional credit products as well as credit card services, lease financing and import/export trade, asset-backed lending, agricultural finance and other products. Depository services include checking accounts, savings accounts and time certificate contracts. Ancillary services such as capital markets, treasury management and receivable lock-box collection are provided to corporate customers. U.S. Bancorp’s bank and trust subsidiaries provide a full range of asset management and fiduciary services for individuals, estates, foundations, business corporations and charitable organizations.

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

Banking and investment services are provided through a network of 2,795 banking offices principally operating in the Midwest and West regions of the United States, through on-line services and over mobile devices. The Company operates a network of 4,459 ATMs and provides 24-hour, seven day a week telephone customer service. Mortgage banking services are provided through banking offices and loan production offices throughout the Company’s domestic markets. Lending products may be originated through banking offices, indirect correspondents, brokers or other lending sources. The Company is also one of the largest providers of corporate and purchasing card services and corporate trust services in the United States. A wholly-owned subsidiary, Elavon, Inc. (“Elavon”), provides domestic merchant processing services directly to merchants and through a network of banking affiliations. Wholly-owned subsidiaries, and affiliates of Elavon, provide similar merchant services in Canada, Mexico and segments of Europe. The

Company also provides corporate trust and fund administration services in Europe. These foreign operations are not significant to the Company.

On a full-time equivalent basis, as of December 31, 2019, U.S. Bancorp employed 69,651 people.

Risk Factors An investment in the Company involves risk, including the possibility that the value of the investment could fall substantially and that dividends or other distributions on the investment could be reduced or eliminated. Below are risk factors that could adversely affect the Company’s financial results and condition and the value of, and return on, an investment in the Company.

Economic and Market Conditions Risk

Deterioration in business and economic conditions could adversely affect the Company’s lending business and the value of loans and debt securities it holds The Company’s business activities and earnings are affected by general business conditions in the United States and abroad, including factors such as the level and volatility of short-term and long-term interest rates, inflation, home prices, unemployment and under-employment levels, bankruptcies, household income, consumer spending, fluctuations in both debt and equity capital markets, liquidity of the global financial markets, the availability and cost of capital and credit, investor sentiment and confidence in the financial markets, and the strength of the domestic and global economies in which the Company operates. Changes in any of these conditions can adversely affect the Company’s consumer and commercial businesses and securities portfolios, its level of charge-offs and provision for credit losses, its capital levels and liquidity, and its results of operations.

Given the high percentage of the Company’s assets represented directly or indirectly by loans, and the importance of lending to its overall business, weak economic conditions are likely to have a negative impact on the Company’s business and results of operations. A deterioration in economic conditions could adversely impact new loan origination activity and existing loan utilization rates as well as delinquencies, defaults and the ability of customers to meet obligations under the loans. The value to the Company of other assets such as investment securities, most of which are debt securities or other financial instruments supported by loans, similarly would be negatively impacted by widespread decreases in credit quality resulting from a weakening of the economy.

Any deterioration in global economic conditions could damage the domestic economy or negatively impact the Company’s borrowers or other counterparties that have direct or indirect exposure to these regions. Such global disruptions can undermine investor confidence, cause a contraction of available credit, or create market volatility, any of which could have significant adverse effects on the Company’s businesses, results

146    

of operations, financial condition and liquidity, even if the Company’s direct exposure to the affected region is limited. A withdrawal of the United Kingdom from the European Union, as well as other global political trends toward nationalism and isolationism, could increase the probability of a deterioration in global economic conditions.

Any further changes to economic policies could erode consumer confidence levels, cause adverse changes in payment patterns, lead to increases in delinquencies and default rates in certain industries or regions, or have other negative market or customer impacts. Such developments could increase the Company’s loan charge-offs and provision for credit losses. Any future economic deterioration that affects household or corporate incomes could also result in reduced demand for credit or fee-based products and services.

Changes in United States trade policies, including the imposition of tariffs and retaliatory tariffs, may adversely impact the Company’s business, financial condition and results of operations There has been increased discussion and activity regarding potential and proposed changes to United States trade policies, legislation, treaties and tariffs, including trade policies and tariffs affecting China, the European Union, Canada and Mexico and retaliatory tariffs by such countries. Tariffs and retaliatory tariffs have been imposed, and additional tariffs and retaliation tariffs have been proposed. Such tariffs, retaliatory tariffs or other trade restrictions on products and materials that the Company’s customers import or export could cause the prices of its customers’ products to increase, which could reduce demand for such products, or reduce the Company’s customers’ margins, and adversely impact their revenues, financial results and ability to service debt. This in turn, could adversely affect the Company’s financial condition and results of operations. In addition, to the extent changes in the political environment have a negative impact on the Company or on the markets in which it does business, or otherwise result in sustained deterioration in economic conditions, results of operations and financial condition could be materially and adversely impacted in the future. Additionally, if prices of consumer goods increase materially as a result of tariffs, the ability of individual households to service debt may be negatively impacted. In total, these outcomes could adversely affect the Company’s financial condition and results of operations. It remains unclear what the United States government or foreign governments will do with respect to tariffs already imposed, additional tariffs that may be imposed, or international trade agreements and policies, and this uncertainty further complicates business planning for the Company’s customers in certain industries.

Changes in interest rates could reduce the Company’s net interest income The Company’s earnings are dependent to a large degree on net interest income, which is the difference between interest income from loans and investments and interest expense on deposits and borrowings. Net interest income is significantly affected by market rates of interest, which in turn are affected by prevailing economic conditions, by the fiscal and

monetary policies of the federal government and by the policies of various regulatory agencies. Like all financial institutions, the Company’s financial position is affected by fluctuations in interest rates. Volatility in interest rates can also result in the flow of funds away from financial institutions into direct investments. Direct investments, such as United States government and corporate securities and other investment vehicles (including mutual funds), generally pay higher rates of return than financial institutions, because of the absence of federal insurance premiums and reserve requirements. Some foreign central banks have moved to a negative interest rate environment, which has exerted downward pressure on the profitability of banks in those regions. The Company’s financial condition could be damaged if this interest rate trend extends to the United States.

Changes in, or the discontinuance of, the London Interbank Offered Rate (“LIBOR”) as an interest rate benchmark could adversely affect the Company’s business, financial condition and results of operations In July 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. It is likely that banks will cease submitting LIBOR rates after 2021 and possibly sooner. It is not possible to know whether LIBOR will continue to be viewed as an acceptable market benchmark, what rate or rates may become accepted alternatives to LIBOR, or what the effect of any such changes in views or alternatives may have on the financial markets for LIBOR-linked financial instruments.

In April 2018, the Federal Reserve Bank of New York commenced publication of the Secured Overnight Financing Rate (“SOFR”), which has been recommended as an alternative to United States dollar LIBOR by the Alternative Reference Rates Committee, a group of market and official sector participants. However, uncertainty remains as to the transition process and acceptance of SOFR as the primary alternative to LIBOR.

The market transition from LIBOR to SOFR or a different alternative reference rate is complex and could have a range of adverse impacts on the Company. In particular, any such transition or reform could, among other things, (i) adversely impact the value of, return on and trading for the Company’s financial assets or liabilities that are linked to LIBOR, including its securities, loans and derivatives; (ii) require renegotiations of outstanding financial assets and liabilities; (iii) result in additional inquiries or other actions from regulators in respect of the Company’s preparation and readiness for the LIBOR transition; (iv) increase the risk of disputes or litigation and/or increase expenses related to the transition, including with respect to any actions resulting from the Company’s interpretation and execution of its roles and responsibilities in corporate trust transactions; (v) adversely impact the Company’s reputation as it works with customers to transition loans and financial instruments from LIBOR; (vi) require successful system and analytics development and operationalization to transition the Company’s systems, loan portfolio and risk management processes away from LIBOR, which will require the Company to rely on the

147    

readiness of third-party vendors; and (vii) cause significant disruption to financial markets that are relevant to the Company’s business segments. In addition, there can be no assurance that actions taken by the Company and third parties to address these risks and otherwise prepare for the transition from LIBOR to alternative interest rate benchmarks will be successful.

Operations and Business Risk

A breach in the security of the Company’s systems, or the systems of certain third parties, could disrupt the Company’s businesses, result in the disclosure of confidential information, damage its reputation and create significant financial and legal exposure The Company experiences numerous attacks on its computer systems, software, networks and other technology assets daily, and the number of attacks is increasing. Although the Company devotes significant resources to maintain and regularly upgrade its systems and processes that are designed to protect the security of the Company’s computer systems, software, networks and other technology assets, as well as its intellectual property, and to protect the confidentiality, integrity and availability of information belonging to the Company and its customers, the Company’s security measures may not be effective. Adversaries continue to develop more sophisticated cyber attacks that could impact the Company. Many financial services institutions, retailers and other companies engaged in data processing have reported breaches in the security of their websites or other systems, some of which have involved sophisticated and targeted attacks intended to obtain unauthorized access to confidential information, destroy data, disable or degrade service, or sabotage systems, often through the introduction of computer viruses or malware, cyber attacks and other means.

Attacks on financial or other institutions important to the overall functioning of the financial system could also adversely affect, directly or indirectly, aspects of the Company’s businesses. The increasing consolidation, interdependence and complexity of financial entities and technology systems means that a technology failure, cyber attack, or other information or security breach that significantly degrades, deletes or compromises the systems or data of one or more financial entities could have a material impact on counterparties or other market participants, including the Company. This consolidation, interconnectivity and complexity increases the risk of operational failure, on both an entity-specific and an industry-wide basis.

Third parties that facilitate the Company’s business activities, including exchanges, clearinghouses, payment and ATM networks, financial intermediaries or vendors that provide services or technology solutions for the Company’s operations, could also be sources of operational and security risks to the Company, including with respect to breakdowns or failures of their systems, misconduct by their employees or cyber attacks that could affect their ability to deliver a product or service to the Company or result in lost or compromised information of the Company or its customers. The Company’s ability to implement back-up systems

or other safeguards with respect to third-party systems is limited. Furthermore, an attack on or failure of a third-party system may not be revealed to the Company in a timely manner, which could compromise the Company’s ability to respond effectively. Some of these third parties may engage vendors of their own as they provide services or technology solutions for the Company’s operations, which introduces the risk that these “fourth parties” could be the source of operational and security failures.

In addition, during the past several years a number of retailers and hospitality companies have disclosed substantial cyber security breaches affecting debit and credit card accounts of their customers, some of whom were the Company’s cardholders. When that happens, holders of Company cards who have made purchases from the business whose systems were breached might experience fraud on their card accounts. The Company might suffer losses associated with reimbursing its customers for such fraudulent transactions on the customers’ card accounts, as well as for other costs related to data security compromise events, such as replacing cards associated with compromised card accounts. These attacks involving Company cards are likely to continue and could, individually or in the aggregate, have a material adverse effect on the Company’s financial condition or results of operations.

It is possible that the Company may not be able to anticipate or to implement effective preventive measures against all security breaches of these types, because the techniques used change frequently, generally increase in sophistication, often are not recognized until launched, sometimes go undetected even when successful, and originate from a wide variety of sources, including organized crime, hackers, terrorists, activists, hostile foreign governments and other external parties. Those parties may also attempt to fraudulently induce employees, customers or other users of the Company’s systems to disclose sensitive information to gain access to the Company’s data or that of its customers or clients, such as through “phishing” schemes. Other types of attacks may include computer viruses, malicious or destructive code, denial-of-service attacks, ransomware or ransom demands to not expose security vulnerabilities in the Company’s systems or the systems of third parties. These risks may increase in the future as the Company continues to increase its mobile and internet-based product offerings and expands its internal usage of web-based products and applications. In addition, the Company’s customers often use their own devices, such as computers, smart phones and tablet computers, to make payments and manage their accounts. The Company has limited ability to assure the safety and security of its customers’ transactions with the Company to the extent they are using their own devices, which could be subject to similar threats.

In the event that the Company’s security systems are penetrated or circumvented, or an authorized user intentionally or unintentionally removes, loses or destroys operations data, serious negative consequences for the Company can follow, including significant disruption of the Company’s operations, misappropriation of confidential information of the Company or that of its customers, or damage to computers or systems of the

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Company or those of its customers and counterparties. These consequences could result in violations of applicable privacy and other laws; financial loss to the Company or to its customers; loss of confidence in the Company’s security measures; customer dissatisfaction; significant litigation exposure; regulatory fines, penalties or intervention; reimbursement or other compensatory costs; additional compliance costs; and harm to the Company’s reputation, all of which could adversely affect the Company.

The Company relies on its employees, systems and third parties to conduct its business, and certain failures by systems or misconduct by employees or third parties could adversely affect its operations The Company operates in many different businesses in diverse markets and relies on the ability of its employees and systems to process a high number of transactions. The Company’s business, financial, accounting, data processing, and other operating systems and facilities may stop operating properly or become disabled or damaged as a result of a number of factors, including events that are out of its control. In addition to the risks posed by information security breaches, as discussed above, such systems could be compromised because of spikes in transaction volume, electrical or telecommunications outages, degradation or loss of internet or website availability, natural disasters, political or social unrest, and terrorist acts. The Company’s business operations may be adversely affected by significant disruption to the operating systems that support its businesses and customers. If backup systems are used during outages, they might not process data as quickly as do the primary systems, resulting in the potential of some data not being backed up.

The Company could also incur losses resulting from the risk of fraud by employees or persons outside of the Company, unauthorized access to its computer systems, the execution of unauthorized transactions by employees, errors relating to transaction processing and technology, breaches of the internal control system and compliance requirements, and business continuation and disaster recovery. This risk of loss also includes the potential legal actions, fines or civil money penalties that could arise as a result of an operational deficiency or as a result of noncompliance with applicable regulatory standards, adverse business decisions or their implementation, and customer attrition due to potential negative publicity.

Third parties provide key components of the Company’s business infrastructure, such as internet connections, network access and mutual fund distribution. While the Company has selected these third parties carefully, it does not control their actions. Any problems caused by third-party service providers, including as a result of not providing the Company their services for any reason or performing their services poorly, could adversely affect the Company’s ability to deliver products and services to the Company’s customers and otherwise to conduct its business. Replacing third-party service providers could also entail significant delay and expense. In addition, failure of third-party service providers to handle current or higher volumes of use could adversely affect the Company’s ability to deliver products and services to clients and otherwise to conduct business.

Technological or financial difficulties of a third-party service provider could adversely affect the Company’s businesses to the extent those difficulties result in the interruption or discontinuation of services provided by that party.

Operational risks for large institutions such as the Company have generally increased in recent years, in part because of the proliferation of new technologies, the use of internet services and telecommunications technologies to conduct financial transactions, the increased number and complexity of transactions being processed, and the increased sophistication and activities of organized crime, hackers, terrorists, activists, and other external parties. In the event of a breakdown in the internal control system, improper operation of systems or improper employee or third-party actions, the Company could suffer financial loss, face legal or regulatory action and suffer damage to its reputation.

The Company could face significant legal and reputational harm if it fails to safeguard personal information The Company is subject to complex and evolving laws and regulations, both inside and outside of the United States, governing the privacy and protection of personal information of individuals. The protected individuals can include the Company’s customers, its employees, and the employees of the Company’s suppliers, counterparties and other third parties. Ensuring that the Company’s collection, use, transfer and storage of personal information comply with applicable laws and regulations in relevant jurisdictions can increase operating costs, impact the development of new products or services, and reduce operational efficiency. Any mishandling or misuse of the personal information of customers, employees or others by the Company or a third party affiliated with the Company could expose the Company to litigation or regulatory fines, penalties or other sanctions.

Additional risks could arise if the Company or third parties do not provide adequate disclosure or transparency to the Company’s customers about the personal information collected from them and its use; any failure to receive, document, and honor the privacy preferences expressed by the Company’s customers; any failure to protect personal information from unauthorized disclosure; or any failure to maintain proper training on privacy practices for all employees or third parties who have access to personal data. Concerns regarding the effectiveness of the Company’s measures to safeguard personal information and abide by privacy preferences, or even the perception that those measures are inadequate, could cause the Company to lose existing or potential customers and thereby reduce its revenues. In addition, any failure or perceived failure by the Company to comply with applicable privacy or data protection laws and regulations could result in requirements to modify or cease certain operations or practices, significant liabilities or regulatory fines, penalties, or other sanctions. Refer to “Supervision and Regulation” in the Company’s Annual Report on Form 10-K for additional information regarding data privacy laws and regulations. Any of these outcomes could damage the

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Company’s reputation and otherwise adversely affect its business.

The Company could lose market share and experience increased costs if it does not effectively develop and implement new technology The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services, including innovative ways that customers can make payments or manage their accounts, such as through the use of mobile payments, digital wallets or digital currencies. The Company’s continued success depends, in part, upon its ability to address customer needs by using technology to provide products and services that customers want to adopt, and create additional efficiencies in the Company’s operations. When launching a new product or service or introducing a new platform for the delivery of products and services, the Company might not identify or fully appreciate new operational risks arising from those innovations or might fail to implement adequate controls to mitigate those risks. Developing and deploying new technology-driven products and services can also involve costs that the Company may not recover and divert resources away from other product development efforts. The Company may not be able to effectively develop and implement profitable new technology-driven products and services or be successful in marketing these products and services to its customers. Failure to successfully keep pace with technological change affecting the financial services industry could harm the Company’s competitive position and negatively affect its revenue and profit.

Damage to the Company’s reputation could adversely impact its business and financial results Reputation risk, or the risk to the Company’s business, earnings and capital from negative public opinion, is inherent in the Company’s business. Negative public opinion about the financial services industry generally or the Company specifically could adversely affect the Company’s ability to keep and attract customers, investors, and employees and could expose the Company to litigation and regulatory action. Negative public opinion can result from the Company’s actual or alleged conduct in any number of activities, including lending practices, cybersecurity breaches, failures to safeguard personal information, discriminating or harassing behavior of employees toward other employees or customers, mortgage servicing and foreclosure practices, compensation practices, sales practices, environmental, social, and governance practices and disclosures, regulatory compliance, mergers and acquisitions, and actions taken by government regulators and community organizations in response to that conduct. In addition, social and environmental activists are increasingly targeting financial services firms with public criticism for their relationships with clients engaged in industries they perceive to be harmful to communities or the environment. Such criticism directed at the Company could generate dissatisfaction among its customers, investors, and employees. Although the Company takes steps to minimize reputation risk in dealing with customers and other constituencies, the Company, as a large diversified financial

services company with a high industry profile, is inherently exposed to this risk.

The Company’s business and financial performance could be adversely affected, directly or indirectly, by natural disasters, climate change, pandemics, terrorist activities or international hostilities Neither the occurrence nor the potential impact of natural disasters, climate change, pandemics, terrorist activities or international hostilities can be predicted. However, these occurrences could impact the Company directly (for example, by interrupting the Company’s systems, which could prevent the Company from obtaining deposits, originating loans and processing and controlling its flow of business; causing significant damage to the Company’s facilities; or otherwise preventing the Company from conducting business in the ordinary course), or indirectly as a result of their impact on the Company’s borrowers, depositors, other customers, vendors or other counterparties (for example, by damaging properties pledged as collateral for the Company’s loans or impairing the ability of certain borrowers to repay their loans). The Company could also suffer adverse consequences to the extent that natural disasters, climate change, pandemics, terrorist activities or international hostilities affect the financial markets or the economy in general or in any particular region. These types of impacts could lead, for example, to an increase in delinquencies, bankruptcies or defaults that could result in the Company experiencing higher levels of nonperforming assets, net charge-offs and provisions for credit losses.

The Company’s ability to mitigate the adverse consequences of these occurrences is in part dependent on the quality of the Company’s resiliency planning, and the Company’s ability, if any, to anticipate the nature of any such event that occurs. The adverse impact of natural disasters, climate change, pandemics, terrorist activities or international hostilities also could be increased to the extent that there is a lack of preparedness on the part of national or regional emergency responders or on the part of other organizations and businesses that the Company transacts with, particularly those that it depends upon, but has no control over. Additionally, the force and frequency of natural disasters are increasing as the climate changes.

The Company’s framework for managing risks may not be effective in mitigating risk and loss to the Company The Company’s risk management framework seeks to mitigate risk and loss. The Company has established processes and procedures intended to identify, measure, monitor, report, and analyze the types of risk to which it is subject, including liquidity risk, credit risk, market risk, interest rate risk, compliance risk, strategic risk, reputation risk, and operational risk related to its employees, systems and vendors, among others. However, as with any risk management framework, there are inherent limitations to the Company’s risk management strategies as there may exist, or develop in the future, risks that it has not appropriately anticipated or identified. In addition, the Company relies on quantitative models to measure certain risks and to estimate certain financial values, and these models could fail to predict future events or exposures accurately. The Company

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must also develop and maintain a culture of risk management among its employees, as well as manage risks associated with third parties, and could fail to do so effectively. If the Company’s risk management framework proves ineffective, the Company could incur litigation and negative regulatory consequences, and suffer unexpected losses that could affect its financial condition or results of operations.

Regulatory and Legal Risk

The Company is subject to extensive and evolving government regulation and supervision, which can increase the cost of doing business, limit the Company’s ability to make investments and generate revenue, and lead to costly enforcement actions Banking regulations are primarily intended to protect depositors’ funds, the federal Deposit Insurance Fund, and the United States financial system as a whole, and not the Company’s debt holders or shareholders. These regulations, and the Company’s inability to act in certain instances without receiving prior regulatory approval, affect the Company’s lending practices, capital structure, investment practices, dividend policy, ability to repurchase common stock, and ability to pursue strategic acquisitions, among other activities.

Both the scope of the laws and regulations and the intensity of the supervision to which the Company is subject have increased in response to the financial crisis of 2008 and 2009, as well as other factors such as technological and market changes. Regulatory enforcement and fines have also increased across the banking and financial services sector. Although the regulatory environment of the post financial crisis framework has been, and is being, rebalanced in some aspects, the Company expects that its business will remain subject to extensive regulation and supervision and that the level of scrutiny and the enforcement environment may fluctuate over time, based on numerous factors, including changes in the United States presidential administration or one or both houses of Congress and public sentiment regarding financial institutions (which can be influenced by scandals and other incidents that involve participants in the industry). In addition, although an overall reduction in the regulation of the financial services sector could result in some operational and cost benefits, any new regulations or modifications to existing regulations and supervisory expectations have and may in the future necessitate changes to the Company’s existing regulatory compliance and risk management infrastructure and could result in increased competition.

Changes to statutes, regulations or regulatory policies, or their interpretation or implementation, and/or regulatory practices, requirements or expectations, could affect the Company in substantial and unpredictable ways. For example, the Guidelines for Heightened Standards of the Office of the Comptroller of the Currency and the Enhanced Prudential Supervision Rules of the Board of Governors of the Federal Reserve System (the “Federal Reserve”) have required and will continue to require significant oversight by the Company’s Board of Directors and focus by the Company’s management on governance and risk-management

activities. Moreover, general regulatory practices, such as longer time frames to obtain regulatory approvals for acquisitions and other activities (and the resultant impact on businesses the Company may seek to acquire), could affect the attractiveness of certain acquisitions or the introduction of new products or services, or otherwise affect the Company’s ability to make acquisitions or introduce new products and services.

The financial services industry continues to face scrutiny from bank supervisors in the examination process and stringent enforcement of regulations on both the federal and state levels, particularly with respect to mortgage-related practices, student lending practices, sales practices and related incentive compensation programs, and other consumer compliance matters, as well as compliance with Bank Secrecy Act/anti-money laundering (“BSA/AML”) requirements and sanctions compliance requirements as administered by the Office of Foreign Assets Control. This heightened regulatory scrutiny, or the results of an investigation or examination, may lead to additional regulatory investigations or enforcement actions. There is no assurance that those actions will not result in regulatory settlements or other enforcement actions against the Company. Furthermore, a single event involving a potential violation of law or regulation may give rise to numerous and overlapping investigations and proceedings, either by multiple federal and state agencies and officials in the United States or, in some instances, regulators and other governmental officials in foreign jurisdictions.

Federal law grants substantial enforcement powers to federal banking regulators and law enforcement agencies. This enforcement authority includes, among other things, the ability to assess significant civil or criminal monetary penalties, fines, or restitution; to issue cease and desist or removal orders; and to initiate injunctive actions against banking organizations and institution-affiliated parties. These enforcement actions may be initiated for violations of laws and regulations and unsafe or unsound practices. Foreign supervisors also have increased regulatory scrutiny and enforcement in areas related to consumer compliance, money laundering, and information technology systems and controls, among others. Any future enforcement action could have a material adverse impact on the Company.

In general, the amounts paid by financial institutions in settlement of proceedings or investigations and the severity of other terms of regulatory settlements are likely to remain elevated in the near term. In some cases, governmental authorities have required criminal pleas or other extraordinary terms, including admissions of wrongdoing and the imposition of monitors, as part of such settlements, which could have significant consequences for a financial institution, including loss of customers, reputational harm, restrictions on the ability to access the capital markets, and the inability to operate certain businesses or offer certain products for a period of time.

Non-compliance with sanctions laws and/or AML laws or failure to maintain an adequate BSA/AML compliance program can lead to significant monetary penalties and reputational damage. In addition, federal regulators evaluate the effectiveness

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of an applicant in combating money laundering when determining whether to approve a proposed bank merger, acquisition, restructuring, or other expansionary activity. There have been a number of significant enforcement actions against banks, broker-dealers and non-bank financial institutions with respect to sanctions laws and BSA/AML laws and some have resulted in substantial penalties, including against the Company and U.S. Bank National Association in 2018.

Violations of laws and regulations or deemed deficiencies in risk management practices also may be incorporated into the Company’s confidential supervisory ratings. A downgrade in these ratings, or these or other regulatory actions and settlements, could limit the Company’s ability to conduct expansionary activities for a period of time and require new or additional regulatory approvals before engaging in certain other business activities.

Compliance with new regulations and supervisory initiatives have increased the Company’s costs over time and may continue to do so. In addition, regulatory changes may reduce the Company’s revenues, limit the types of financial services and products it may offer, alter the investments it makes, affect the manner in which it operates its businesses, increase its litigation and regulatory costs should it fail to appropriately comply with new or modified laws and regulatory requirements, and increase the ability of non-banks to offer competing financial services and products.

Stringent requirements related to capital and liquidity have been adopted by United States banking regulators that may limit the Company’s ability to return earnings to shareholders or operate or invest in its business United States banking regulators have adopted stringent capital- and liquidity-related standards applicable to larger banking organizations, including the Company. The rules require banks to hold more and higher quality capital as well as sufficient unencumbered liquid assets to meet certain stress scenarios defined by regulation. In November 2019, the federal banking regulators adopted two final rules (the “Tailoring Rules”) that revised the criteria for determining the applicability of regulatory capital and liquidity requirements for large U.S. banking organizations, including the Company and U.S. Bank National Association, and that tailored the application of the Federal Reserve’s enhanced prudential standards to large banking organizations. Although the Tailoring Rules and other recent changes to capital- and liquidity-related rules generally have simplified the regulatory framework applicable to the Company, future changes to the implementation of these rules including the common equity tier 1 capital conservation buffer, or additional capital- and liquidity-related rules, could require the Company to take further steps to increase its capital, increase its investment security holdings, divest assets or operations, or otherwise change aspects of its capital and/or liquidity measures, including in ways that may be dilutive to shareholders or could limit the Company’s ability to pay common stock dividends, repurchase its common stock, invest in its businesses or provide loans to its customers. Refer to “Supervision and Regulation” in the Company’s Annual

Report on Form 10-K for additional information regarding the Company’s capital and liquidity requirements.

Additional requirements may be imposed in the future. In December 2017, the Basel Committee finalized a package of revisions to the Basel III framework. The changes are meant to improve the calculation of risk-weighted assets and the comparability of capital ratios. Federal banking regulators are expected to undertake rule-makings in future years to implement these revisions in the United States. In addition, in April 2018 the Federal Reserve proposed stress capital buffer requirements that would replace the capital conservation buffer with a stress capital buffer and introduce a stress leverage buffer. Refer to “Supervision and Regulation” in the Company’s Annual Report on Form 10-K for additional information regarding the proposed stress buffer requirements. The ultimate impact of revisions to the Basel III–based framework in the United States and the stress buffer requirements on the Company’s capital and liquidity will depend on the final rule-makings and the implementation process thereafter.

The Company is subject to significant financial and reputation risks from potential legal liability and governmental actions The Company faces significant legal risks in its businesses, and the volume of claims and amount of damages and penalties claimed in litigation and governmental proceedings against it and other financial institutions are substantial. Customers, clients and other counterparties are making claims for substantial or indeterminate amounts of damages, while banking regulators and certain other governmental authorities have focused on enforcement. As a participant in the financial services industry, it is likely that the Company will continue to experience a high level of litigation related to its businesses and operations in the future.

In addition, governmental authorities have, at times, sought criminal penalties against companies in the financial services sector for violations, and, at times, have required an admission of wrongdoing from financial institutions in connection with resolving such matters. Criminal convictions or admissions of wrongdoing in a settlement with the government can lead to greater exposure in civil litigation and reputational harm.

Substantial legal liability or significant governmental action against the Company could materially impact its financial condition and results of operations or cause significant reputational harm to the Company, which in turn could adversely impact its business prospects. Also, the resolution of a litigation or regulatory matter could result in additional accruals or exceed established accruals for a particular period, which could materially impact the Company’s results from operations for that period.

The Company may be required to repurchase mortgage loans or indemnify mortgage loan purchasers as a result of breaches in contractual representations and warranties When the Company sells mortgage loans that it has originated to various parties, including GSEs, it is required to make customary representations and warranties to the purchaser about the mortgage loans and the manner in which they were originated. The Company may be required to repurchase mortgage loans or

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be subject to indemnification claims in the event of a breach of contractual representations or warranties that is not remedied within a certain period. Contracts for residential mortgage loan sales to the GSEs include various types of specific remedies and penalties that could be applied if the Company does not adequately respond to repurchase requests. If economic conditions and the housing market deteriorate or the GSEs increase their claims for breached representations and warranties, the Company could have increased repurchase obligations and increased losses on repurchases, requiring material increases to its repurchase reserve.

Credit and Mortgage Business Risk

Heightened credit risk could require the Company to increase its provision for credit losses, which could have a material adverse effect on the Company’s results of operations and financial condition When the Company lends money, or commits to lend money, it incurs credit risk, or the risk of losses if its borrowers do not repay their loans. As one of the largest lenders in the United States, the credit performance of the Company’s loan portfolios significantly affects its financial results and condition. If the current economic environment were to deteriorate, the Company’s customers may have difficulty in repaying their loans or other obligations, which could result in a higher level of credit losses and higher provisions for credit losses. The Company reserves for credit losses by establishing an allowance through a charge to earnings to provide for loan defaults and nonperformance. The amount of the Company’s allowance for loan losses is based on its historical loss experience as well as an evaluation of the risks associated with its loan portfolio, including the size and composition of the loan portfolio, current economic conditions and geographic concentrations within the portfolio. Unexpected stress on the United States economy or the local economies in which the Company does business may result in, among other things, unexpected deterioration in credit quality of the loan portfolio, or in the value of collateral securing those loans.

In addition, the process the Company uses to estimate losses inherent in its credit exposure requires difficult, subjective, and complex judgments, including forecasts of economic conditions and how these economic predictions might impair the ability of its borrowers to repay their loans. These economic predictions and their impact may not be capable of accurate estimation, which may, in turn, impact the reliability of the process. As with any such assessments, the Company may fail to identify the proper factors or to accurately estimate the impacts of the factors that the Company does identify. The Company also makes loans to borrowers where it does not have or service the loan with the first lien on the property securing its loan. For loans in a junior lien position, the Company may not have access to information on the position or performance of the first lien when it is held and serviced by a third party, which may adversely affect the accuracy of the loss estimates for loans of these types. Increases in the Company’s allowance for loan losses may not be adequate to cover actual loan losses, and future provisions for loan losses

could materially and adversely affect its financial results. In addition, the Company’s ability to assess the creditworthiness of its customers may be impaired if the models and approaches it uses to select, manage, and underwrite its customers become less predictive of future behaviors.

A concentration of credit and market risk in the Company’s loan portfolio could increase the potential for significant losses The Company may have higher credit risk, or experience higher credit losses, to the extent its loans are concentrated by loan type, industry segment, borrower type, or location of the borrower or collateral. For example, the Company’s credit risk and credit losses can increase if borrowers who engage in similar activities are uniquely or disproportionately affected by economic or market conditions, or by regulation, such as regulation related to climate change. Deterioration in economic conditions or real estate values in states or regions where the Company has relatively larger concentrations of residential or commercial real estate could result in higher credit costs. In particular, deterioration in real estate values and underlying economic conditions in California could result in significantly higher credit losses to the Company.

Changes in interest rates can impact the value of the Company’s mortgage servicing rights and mortgages held for sale, and can make its mortgage banking revenue volatile from quarter to quarter, which can reduce its earnings The Company has a portfolio of MSRs, which is the right to service a mortgage loan—collect principal, interest and escrow amounts—for a fee. The Company initially carries its MSRs using a fair value measurement of the present value of the estimated future net servicing income, which includes assumptions about the likelihood of prepayment by borrowers. Changes in interest rates can affect prepayment assumptions and thus fair value. When interest rates fall, prepayments tend to increase as borrowers refinance, and the fair value of MSRs can decrease, which in turn reduces the Company’s earnings. Further, it is possible that, because of economic conditions and/or a weak or deteriorating housing market, even when interest rates fall or remain low, mortgage originations may fall or any increase in mortgage originations may not be enough to offset the decrease in the MSRs’ value caused by the lower rates.

A decline in the soundness of other financial institutions could adversely affect the Company’s results of operations The Company’s ability to engage in routine funding or settlement transactions could be adversely affected by the actions and commercial soundness of other domestic or foreign financial institutions. Financial services institutions are interrelated as a result of trading, clearing, counterparty or other relationships. The Company has exposure to many different counterparties, and the Company routinely executes and settles transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks, mutual and hedge funds, and other institutional clients. As a result, defaults by, or even rumors or questions about, the soundness of one or more financial services institutions, or the financial services

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industry generally, could lead to losses or defaults by the Company or by other institutions and impact the Company’s predominately United States–based businesses or the less significant merchant processing, corporate trust and fund administration services businesses it operates in foreign countries. Many of these transactions expose the Company to credit risk in the event of a default by a counterparty or client. In addition, the Company’s credit risk may be further increased when the collateral held by the Company cannot be realized upon or is liquidated at prices not sufficient to recover the full amount of the financial instrument exposure due the Company. There is no assurance that any such losses would not adversely affect the Company’s results of operations.

Change in residual value of leased assets may have an adverse impact on the Company’s financial results The Company engages in leasing activities and is subject to the risk that the residual value of the property under lease will be less than the Company’s recorded asset value. Adverse changes in the residual value of leased assets can have a negative impact on the Company’s financial results. The risk of changes in the realized value of the leased assets compared to recorded residual values depends on many factors outside of the Company’s control, including supply and demand for the assets, condition of the assets at the end of the lease term, and other economic factors.

Liquidity Risk

If the Company does not effectively manage its liquidity, its business could suffer The Company’s liquidity is essential for the operation of its business. Market conditions, unforeseen outflows of funds or other events could negatively affect the Company’s level or cost of funding, affecting its ongoing ability to accommodate liability maturities and deposit withdrawals, meet contractual obligations, and fund asset growth and new business transactions at a reasonable cost and in a timely manner. If the Company’s access to stable and low-cost sources of funding, such as customer deposits, is reduced, the Company might need to use alternative funding, which could be more expensive or of limited availability. Any substantial, unexpected or prolonged changes in the level or cost of liquidity could adversely affect the Company’s business.

Loss of customer deposits could increase the Company’s funding costs The Company relies on bank deposits to be a low-cost and stable source of funding. The Company competes with banks and other financial services companies for deposits, including those that offer on-line channels. If the Company’s competitors raise the interest rates they pay on deposits, the Company’s funding costs may increase, either because the Company raises the interest rates it pays on deposits to avoid losing deposits to competitors or because the Company loses deposits to competitors and must rely on more expensive sources of funding. Higher funding costs reduce the Company’s net interest margin and net interest income. Checking and savings account balances and other forms of customer deposits

may decrease when customers perceive alternative investments, such as the stock market, as providing a better risk/return tradeoff. When customers move money out of bank deposits and into other investments, the Company may lose a relatively low-cost source of funds, increasing the Company’s funding costs and reducing the Company’s net interest income.

A downgrade in the Company’s credit ratings could have a material adverse effect on its liquidity, funding costs and access to capital
markets The Company’s credit ratings are important to its liquidity. A reduction in one or more of the Company’s credit ratings could adversely affect its liquidity, increase its funding costs or limit its access to the capital markets. Further, a downgrade could decrease the number of investors and counterparties willing or able, contractually or otherwise, to do business or lend to the Company, thereby adversely affecting the Company’s competitive position. The Company’s credit ratings and credit rating agencies’ outlooks are subject to ongoing review by the rating agencies, which consider a number of factors, including the Company’s own financial strength, performance, prospects and operations, as well as factors not within the control of the Company, including conditions affecting the financial services industry generally. There can be no assurance that the Company will maintain its current ratings and outlooks.

The Company relies on dividends from its subsidiaries for its liquidity needs, and the payment of those dividends is limited by laws and regulations The Company is a separate and distinct legal entity from U.S. Bank National Association and its non-bank subsidiaries. The Company receives a significant portion of its cash from dividends paid by its subsidiaries. These dividends are the principal source of funds to pay dividends on the Company’s stock and interest and principal on its debt. Various federal and state laws and regulations limit the amount of dividends that U.S. Bank National Association and certain of its non-bank subsidiaries may pay to the Company without regulatory approval. Also, the Company’s right to participate in a distribution of assets upon a subsidiary’s liquidation or reorganization is subject to prior claims of the subsidiary’s creditors, except to the extent that any of the Company’s claims as a creditor of that subsidiary may be recognized.

Competitive and Strategic Risk

The financial services industry is highly competitive, and competitive pressures could intensify and adversely affect the Company’s financial results The Company operates in a highly competitive industry that could become even more competitive as a result of legislative, regulatory and technological changes, as well as continued industry consolidation, which may increase in connection with current economic and market conditions. This consolidation may produce larger, better-capitalized and more geographically diverse companies that are capable of offering a wider array of financial products and services at more competitive prices. The Company competes with other commercial banks, savings and loan associations,

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mutual savings banks, finance companies, mortgage banking companies, credit unions, investment companies, credit card companies, and a variety of other financial services and advisory companies. Legislative or regulatory changes also could lead to increased competition in the financial services sector. For example, the Economic Growth Act and the Tailoring Rules have reduced the regulatory burden of large bank holding companies, including the Company and some of its competitors, and raised the asset thresholds at which more onerous requirements apply, which could cause certain large bank holding companies with less than $250 billion in total consolidated assets, which were previously subject to more stringent enhanced prudential standards, to become more competitive or to pursue expansion more aggressively.

In addition, technology has lowered barriers to entry and made it possible for non-banks to offer products and services, such as loans and payment services, that traditionally were banking products, and made it possible for technology companies to compete with financial institutions in providing electronic, internet-based, and mobile phone–based financial solutions. Competition with non-banks, including technology companies, to provide financial products and services is intensifying. In particular, the activity of financial technology companies (“fintechs”) has grown significantly over recent years and is expected to continue to grow. Fintechs have and may continue to offer bank or bank-like products. For example, a number of fintechs have applied for bank or industrial loan charters. In addition, other fintechs have partnered with existing banks to allow them to offer deposit products to their customers. Many of these companies, including the Company’s competitors, have fewer regulatory constraints, and some have lower cost structures, in part due to lack of physical structures. Also, the potential need to adapt to industry changes in information technology systems, on which the Company and financial services industry are highly dependent, could present operational issues and require capital spending. The Company’s ability to compete successfully depends on a number of factors, including, among others, its ability to develop and execute strategic plans and initiatives; developing, maintaining and building long-term customer relationships based on quality service, competitive prices, high ethical standards and safe, sound assets; and industry and general economic trends. A failure to compete effectively could contribute to downward price pressure on the Company’s products or services or a loss of market share.

The Company may need to lower prices on existing products and services and develop and introduce new products and services to maintain market share The Company’s success depends, in part, on its ability to adapt its products and services to evolving industry standards. There is increasing pressure to provide products and services at lower prices. Lower prices can reduce the Company’s net interest margin and revenues from its fee-based products and services. In addition, the adoption of new technologies or further developments in current technologies require the Company to make substantial expenditures to modify or adapt its existing

products and services. Also, these and other capital investments in the Company’s businesses may not produce expected growth in earnings anticipated at the time of the expenditure. The Company might not be successful in developing or introducing new products and services, adapting to changing customer preferences and spending and saving habits, achieving market acceptance of its products and services, or sufficiently developing and maintaining loyal customer relationships.

The Company’s business could suffer if it fails to attract and retain skilled employees The Company’s success depends, in large part, on its ability to attract and retain key employees. Competition for the best people in most activities the Company engages in can be intense. The Company may not be able to hire the best people or to keep them. Recent strong scrutiny of compensation practices has resulted in, and may continue to result in, additional regulation and legislation in this area. As a result, the Company may not be able to retain key employees by providing adequate compensation. In addition, there is the potential for changes in immigration policies in multiple jurisdictions, and the Company could be adversely affected to the extent that immigration policies or work authorization programs were to unduly restrict or otherwise make it more difficult for qualified employees to work in, or transfer among, jurisdictions in which the Company has operations or conducts its business. There is no assurance that these developments will not cause increased turnover or impede the Company’s ability to retain and attract the highest caliber employees.

The Company may not be able to complete future acquisitions, and completed acquisitions may not produce revenue enhancements or cost savings at levels or within timeframes originally anticipated, may result in unforeseen integration difficulties, and may dilute existing shareholders’ interests The Company regularly explores opportunities to acquire financial services businesses or assets and may also consider opportunities to acquire other banks or financial institutions. The Company cannot predict the number, size or timing of acquisitions it might pursue.

The Company must generally receive federal regulatory approval before it can acquire a bank or bank holding company. The Company’s ability to pursue or complete an attractive acquisition could be negatively impacted by regulatory delay or other regulatory issues. The Company cannot be certain when or if, or on what terms and conditions, any required regulatory approvals will be granted. For example, the Company may be required to sell branches as a condition to receiving regulatory approval for bank acquisitions. If the Company commits certain regulatory violations, including those that result in a downgrade in certain of the Company’s bank regulatory ratings, governmental authorities could, as a consequence, preclude it from pursuing future acquisitions for a period of time.

There can be no assurance that acquisitions the Company completes will have the anticipated positive results, including results related to expected revenue increases, cost savings,

155    

increases in geographic or product presence, and/or other projected benefits. Integration efforts could divert management’s attention and resources, which could adversely affect the Company’s operations or results. The integration could result in higher than expected customer loss, deposit attrition, loss of key employees, disruption of the Company’s businesses or the businesses of the acquired company, or otherwise adversely affect the Company’s ability to maintain relationships with customers and employees or achieve the anticipated benefits of the acquisition. Also, the negative effect of any divestitures required by regulatory authorities in acquisitions or business combinations may be greater than expected. In addition, future acquisitions may also expose the Company to increased legal or regulatory risks. Finally, future acquisitions could be material to the Company, and it may issue additional shares of stock to pay for those acquisitions, which would dilute current shareholders’ ownership interests.

Accounting and Tax Risk

The Company’s reported financial results depend on management’s selection of accounting methods and certain assumptions and estimates, which, if incorrect, could cause unexpected losses in the future The Company’s accounting policies and methods are fundamental to how the Company records and reports its financial condition and results of operations. The Company’s management must exercise judgment in selecting and applying many of these accounting policies and methods so they comply with generally accepted accounting principles and reflect management’s judgment regarding the most appropriate manner to report the Company’s financial condition and results of operations. In some cases, management must select the accounting policy or method to apply from two or more alternatives, any of which might be reasonable under the circumstances, yet might result in the Company’s reporting materially different results than would have been reported under a different alternative.

Certain accounting policies are critical to presenting the Company’s financial condition and results of operations. They require management to make difficult, subjective or complex judgments about matters that are uncertain. Materially different amounts could be reported under different conditions or using different assumptions or estimates. These critical accounting policies include the allowance for credit losses, estimations of fair value, the valuation of MSRs, and income taxes. Because of the uncertainty of estimates involved in these matters, the Company may be required to do one or more of the following: significantly

increase the allowance for credit losses and/or sustain credit losses that are significantly higher than the reserve provided, recognize significant losses on the remeasurement of certain asset and liability balances, or significantly increase its accrued taxes liability. For more information, refer to “Critical Accounting Policies” in this Annual Report.

Changes in accounting standards could materially impact the Company’s financial statements From time to time, the Financial Accounting Standards Board and the United States Securities and Exchange Commission change the financial accounting and reporting standards that govern the preparation of the Company’s financial statements. These changes can be hard to predict and can materially impact how the Company records and reports its financial condition and results of operations. The Company could be required to apply a new or revised standard retroactively or apply an existing standard differently, on a retroactive basis, in each case potentially resulting in the Company restating prior period financial statements. As an example, effective January 1, 2020, the Company adopted accounting guidance issued by the Financial Accounting Standards Board related to the impairment of financial instruments, particularly the allowance for loan losses. This guidance changes impairment recognition to a model that is based on expected losses rather than incurred losses, which is intended to result in more timely recognition of credit losses. Upon adoption, the Company increased its allowance for credit losses and reduced retained earnings by $1.5 billion.

The Company’s investments in certain tax-advantaged projects may not generate returns as anticipated and may have an adverse impact on the Company’s financial results The Company invests in certain tax-advantaged projects promoting affordable housing, community development and renewable energy resources. The Company’s investments in these projects are designed to generate a return primarily through the realization of federal and state income tax credits, and other tax benefits, over specified time periods. The Company is subject to the risk that previously recorded tax credits, which remain subject to recapture by taxing authorities based on compliance features required to be met at the project level, will fail to meet certain government compliance requirements and will not be able to be realized. The possible inability to realize these tax credit and other tax benefits can have a negative impact on the Company’s financial results. The risk of not being able to realize the tax credits and other tax benefits depends on many factors outside of the Company’s control, including changes in the applicable tax code and the ability of the projects to be completed.

156    

Executive Officers

Andrew Cecere

Mr. Cecere is Chairman, President and Chief Executive Officer of U.S. Bancorp. Mr. Cecere, 59, has served as President of U.S. Bancorp since January 2016, Chief Executive Officer since April 2017 and Chairman since April 2018. He also served as Vice Chairman and Chief Operating Officer from January 2015 to January 2016 and was U.S. Bancorp’s Vice Chairman and Chief Financial Officer from February 2007 until January 2015. Until that time, he served as Vice Chairman, Wealth Management and Investment Services, of U.S. Bancorp since the merger of Firstar Corporation and U.S. Bancorp in February 2001. Previously, he had served as an executive officer of the former U.S. Bancorp, including as Chief Financial Officer from May 2000 through February 2001.

Ismat Aziz

Ms. Aziz is Senior Executive Vice President and Chief Human Resources Officer of U.S. Bancorp. Ms. Aziz, 52, has served in this position since joining U.S. Bancorp in September 2018. She served as Chief Human Resources Officer of Sprint Corporation from May 2016 until September 2018. Ms. Aziz served as the Chief Human Resources Officer of Sam’s Club from April 2012 to April 2016, and as the Senior Vice President of Business Capability and Human Resources of Sam’s Club from August 2010 to April 2012. Prior to that time, she served as the Vice President of Business Capability and Human Resources at Sears Canada from June 2009 to August 2010.

James L. Chosy

Mr. Chosy is Senior Executive Vice President and General Counsel of U.S. Bancorp. Mr. Chosy, 56, has served in this position since March 2013. He also served as Corporate Secretary of U.S. Bancorp from March 2013 until April 2016. From 2001 to 2013, he served as the General Counsel and Secretary of Piper Jaffray Companies. From 1995 to 2001, Mr. Chosy was Vice President and Associate General Counsel of U.S. Bancorp, having also served as Assistant Secretary of U.S. Bancorp from 1995 through 2000 and as Secretary from 2000 until 2001.

Terrance R. Dolan

Mr. Dolan is Vice Chair and Chief Financial Officer of U.S. Bancorp. Mr. Dolan, 58, has served in this position since August 2016. From July 2010 to July 2016, he served as Vice Chairman, Wealth Management and Investment Services, of U.S. Bancorp. From September 1998 to July 2010, Mr. Dolan served as U.S. Bancorp’s Controller. He additionally held the title of Executive Vice President from January 2002 until June 2010 and Senior Vice President from September 1998 until January 2002.

Leslie V. Godridge

Ms. Godridge is Vice Chair, Corporate and Commercial Banking, of U.S. Bancorp. Ms. Godridge, 64, has served in this position since January 2016. From February 2013 until December 2015, she served as Executive Vice President, National Corporate Specialized Industries and Global Treasury Management, of U.S. Bancorp. From February 2007, when she joined U.S. Bancorp, until January 2013, Ms. Godridge served as Executive Vice President, National Corporate and Institutional Banking, of U.S. Bancorp. Prior to that time, she served as Senior Executive Vice President and a member of the Executive Committee at The Bank of New York, where she was head of BNY Asset Management, Private Banking, Consumer Banking and Regional Commercial Banking from 2004 to 2006. Ms. Godridge will retire from U.S. Bancorp on June 30, 2020.

Gunjan Kedia

Ms. Kedia is Vice Chair, Wealth Management and Investment Services, of U.S. Bancorp. Ms. Kedia, 49, has served in this position since joining U.S. Bancorp in December 2016. From October 2008 until May 2016, she served as Executive Vice President of State Street Corporation where she led the core investment servicing business in North and South America and served as a member of State Street’s management committee, its senior most strategy and policy committee. Previously, Ms. Kedia was an Executive Vice President of global product management at Bank of New York Mellon from 2004 to 2008.

James B. Kelligrew

Mr. Kelligrew is Vice Chair, Corporate and Commercial Banking, of U.S. Bancorp. Mr. Kelligrew, 54, has served in this position since January 2016. From March 2014 until December 2015, he served as Executive Vice President, Fixed Income and Capital Markets, of U.S. Bancorp, having served as Executive Vice President, Credit Fixed Income, of U.S. Bancorp from May 2009 to March 2014. Prior to that time, he held various leadership positions with Wells Fargo Securities from 2003 to 2009.

Shailesh M. Kotwal

Mr. Kotwal is Vice Chair, Payment Services, of U.S. Bancorp. Mr. Kotwal, 55, has served in this position since joining U.S. Bancorp in March 2015. From July 2008 until May 2014, he served as Executive Vice President of TD Bank Group with responsibility for retail banking products and services and as Chair of its enterprise payments council. From 2006 until 2008, he served as President, International, of eFunds Corporation. Previously, Mr. Kotwal served in various leadership roles at American Express Company from 1989 until 2006, including responsibility for operations in North and South America, Europe and the Asia-Pacific regions.

157    

Katherine B. Quinn

Ms. Quinn is Vice Chair and Chief Administrative Officer of U.S. Bancorp. Ms. Quinn, 55, has served in this position since April 2017. From September 2013 to April 2017, she served as Executive Vice President and Chief Strategy and Reputation Officer of U.S. Bancorp and has served on U.S. Bancorp’s Managing Committee since January 2015. From September 2010 until January 2013, she served as Chief Marketing Officer of WellPoint, Inc. (now known as Anthem, Inc.), having served as Head of Corporate Marketing of WellPoint from July 2005 until September 2010.

Jodi L. Richard

Ms. Richard is Vice Chair and Chief Risk Officer of U.S. Bancorp. Ms. Richard, 51, has served in this position since October 2018. She served as Executive Vice President and Chief Operational Risk Officer of U.S. Bancorp from January 2018 until October 2018, having served as Senior Vice President and Chief Operational Risk Officer from 2014 until January 2018. Prior to that time, Ms. Richard held various senior leadership roles at HSBC from 2003 until 2014, including Executive Vice President and Head of Operational Risk and Internal Control at HSBC North America from 2008 to 2014. Ms. Richard started her career at the Office of the Comptroller of the Currency in 1990 as a national bank examiner.

Mark G. Runkel

Mr. Runkel is Senior Executive Vice President and Chief Credit Officer of U.S. Bancorp. Mr. Runkel, 43, has served in this position since December 2013. From February 2011 until December 2013, he served as Senior Vice President and Credit Risk Group Manager of U.S. Bancorp Retail and Payment Services Credit Risk Management, having served as Senior Vice President and Risk Manager of U.S. Bancorp Retail and Small Business Credit Risk Management from June 2009 until February 2011. From March 2005 until May 2009, he served as Vice President and Risk Manager of U.S. Bancorp.

Jeffry H. von Gillern

Mr. von Gillern is Vice Chair, Technology and Operations Services, of U.S. Bancorp. Mr. von Gillern, 54, has served in this position since July 2010. From April 2001, when he joined U.S. Bancorp, until July 2010, Mr. von Gillern served as Executive Vice President of U.S. Bancorp, additionally serving as Chief Information Officer from July 2007 until July 2010.

Timothy A. Welsh

Mr. Welsh is Vice Chair, Consumer and Business Banking, of U.S. Bancorp. Mr. Welsh, 54, has served in this position since joining U.S. Bancorp in July 2017. From July 2006 until June 2017, he served as a Senior Partner at McKinsey & Company where he specialized in financial services and the consumer experience. Previously, Mr. Welsh served as a Partner at McKinsey & Company from 1999 to 2006.

Derek J. White

Mr. White is  Vice Chair and Chief Digital Officer of U.S. Bancorp. Mr. White, 46, has served in this position since joining U.S. Bancorp in June 2019. He served as Global Head of Client Solutions of BBVA from March 2016 until April 2019. Prior to joining BBVA, Mr. White served in various senior leadership roles at Barclays Bank from 2005 to 2016, including as the Chief Design and Digital Officer from June 2013 to February 2016.

158    

Directors

Andrew Cecere1,3,7

Chairman, President and Chief Executive Officer

U.S. Bancorp

Warner L. Baxter1,2,3

Chairman, President and Chief Executive Officer

Ameren Corporation

(Energy)

Dorothy J. Bridges6,7

Former Senior Vice President

Federal Reserve Bank of Minneapolis

(Government)

Elizabeth L. Buse2,3

Former Chief Executive Officer

Monitise PLC

(Financial services)

Marc N. Casper5,6

President and Chief Executive Officer

Thermo Fisher Scientific Inc.

(Life sciences and healthcare technology)

Arthur D. Collins, Jr.1,4,5

Retired Chairman and Chief Executive Officer

Medtronic, Inc.

(Medical device and technology)

Kimberly J. Harris1,5,6

Retired President and Chief Executive Officer

Puget Energy, Inc.

(Energy)

Roland A. Hernandez1,2,3

Founding Principal and Chief Executive Officer

Hernandez Media Ventures

(Media)

Doreen Woo Ho3,7

Commissioner

San Francisco Port Commission

(Government)

Olivia F. Kirtley4,5,7

Business Consultant

(Consulting)

Karen S. Lynch2,6

Executive Vice President

CVS Health Corporation

(Health care)

Richard P. McKenney1,6,7

President and Chief Executive Officer

Unum Group

(Financial protection benefits)

Yusuf I. Mehdi6,7

Corporate Vice President

Microsoft Corporation

(Technology)

David B. O’Maley 1,4,5

Retired Chairman, President and Chief Executive Officer

Ohio National Mutual Holdings, Inc.

(Insurance)

O’dell M. Owens, M.D., M.P.H.3,4

President and Chief Executive Officer

Interact for Health

(Health and wellness)

Craig D. Schnuck5,7

Former Chairman and Chief Executive Officer

Schnuck Markets, Inc.

(Food retail)

John P. Wiehoff6,7

Chairman and Retired Chief Executive Officer

C.H. Robinson Worldwide, Inc.

(Transportation and logistics services)

Scott W. Wine1,2,4

Chairman and Chief Executive Officer

Polaris Industries Inc.

(Motorized products)

1. Executive Committee

2. Audit Committee

3. Capital Planning Committee

4. Compensation and Human Resources Committee

5. Governance Committee

6. Public Responsibility Committee

7. Risk Management Committee

159    

EX-21

EXHIBIT 21

SUBSIDIARIES OF U.S. BANCORP

(JURISDICTIONS OF ORGANIZATION SHOWN IN PARENTHESES)

111 Tower Investors, Inc. (Minnesota)

Banctech Processing Services, LLC (Florida)

CenPOS, LLC (Florida)

Daimler Title Co. (Delaware)

DSL Service Company (California)

Eclipse Funding LLC (Delaware)

EFS Depositary Nominees Limited (Ireland)

Elavon Canada Company (Canada)

Elavon European Holdings B.V. (Netherlands)

Elavon Financial Services DAC (Ireland)

Elavon Latin American Holdings, LLC (Delaware)

Elavon Merchant Services Mexico, S. de R.L. de C.V. (Mexico)

Elavon Mexico Holding Company, S.A. de C.V. (Mexico)

Elavon Operations Company, S. de R.I. de C.V. (Mexico)

Elavon Puerto Rico, Inc. (Puerto Rico)

Elavon Services Company, S. de R.I. de C.V. (Mexico)

Elavon, Inc. (Georgia)

EuroConex Technologies Limited (Ireland)

Fairfield Financial Group, Inc. (Illinois)

First Bank LaCrosse Building Corp. (Wisconsin)

First LaCrosse Properties (Wisconsin)

First Payment System Holdings, Inc. (Florida)

First Payment Systems, LLC (Florida)

Firstar Capital Corporation (Ohio)

Firstar Development, LLC (Delaware)

Firstar Realty, L.L.C. (Illinois)

Fixed Income Client Solutions LLC (Delaware)

FSV Payment Systems, Inc. (Delaware)

Galaxy Funding, Inc. (Delaware)

HTD Leasing LLC (Delaware)

HVT, Inc. (Delaware)

Integrated Logistics, LLC (Georgia)

MBS-UI Sub-CDE XVI, LLC (Delaware)

Mercantile Mortgage Financial Company (Illinois)

Midwest Indemnity Inc. (Vermont)

Mississippi Valley Company (Arizona)

MMCA Lease Services, Inc. (Delaware)

NILT, Inc. (Delaware)

Norse Nordics AB (Sweden)

NuMaMe, LLC (Delaware)

One Eleven Investors LLC (Delaware)

Park Bank Initiatives, Inc. (Illinois)

Pomona Financial Services, Inc. (California)

Pullman Park Development, LLC (Illinois)

Pullman Park Investment Fund I, LLC (Missouri)

Pullman Transformation, Inc. (Delaware)

Quasar Distributors, LLC (Delaware)

Quintillion Services Limited (Ireland)

RBC Community Development Sub 3, LLC (Delaware)

Red Sky Risk Services, LLC (Delaware)

RTRT, Inc. (Delaware)

SCBD, LLC (Delaware)

SCDA, LLC (Delaware)

SCFD LLC (Delaware)

Syncada Asia Pacific Private Limited (Singapore)

Syncada Canada ULC (Canada)

Syncada India Operations Private Limited (India)

Syncada LLC (Delaware)

Talech Belize Limited (Belize)

Talech International Limited (Ireland)

Talech Lithuania, UAB (Lithuania)

Talech, Inc. (Delaware)

Tarquad Corporation (Missouri)

The Miami Valley Insurance Company (Arizona)

TI Fleet Co. (Delaware)

TLT Leasing Corp. (Delaware)

TMTT, Inc. (Delaware)

U.S. Bancorp Asset Management, Inc. (Delaware)

U.S. Bancorp Community Development Corporation (Minnesota)

U.S. Bancorp Community Investment Corporation (Delaware)

U.S. Bancorp Fund Services, LLC (Wisconsin)

U.S. Bancorp Government Leasing and Finance, Inc. (Minnesota)

U.S. Bancorp Insurance and Investments, Inc. (Wyoming)

U.S. Bancorp Insurance Company, Inc. (Vermont)

U.S. Bancorp Insurance Services of Montana, Inc. (Montana)

U.S. Bancorp Insurance Services, LLC (Wisconsin)

U.S. Bancorp Investments, Inc. (Delaware)

U.S. Bancorp Missouri Low-Income Housing Tax Credit Fund, L.L.C. (Missouri)

U.S. Bancorp Municipal Lending and Finance, Inc. (Minnesota)

U.S. Bank Global Corporate Trust Limited (United Kingdom)

U.S. Bank Global Fund Services (Cayman) Limited (Cayman Islands)

U.S. Bank Global Fund Services (Guernsey) Limited (Guernsey)

U.S. Bank Global Fund Services (Ireland) Limited (Ireland)

U.S. Bank National Association (a nationally chartered banking association)

U.S. Bank Trust Company, National Association (a nationally chartered banking association)

U.S. Bank Trust National Association (a nationally chartered banking association)

U.S. Bank Trust National Association SD (a nationally chartered banking association)

U.S. Bank Trustees Limited (United Kingdom)

USB Americas Holdings Company (Delaware)

USB Capital IX (Delaware)

USB European Holdings Company (Delaware)

USB Investment Services (Holdings) Limited (Ireland)

USB Leasing LLC (Delaware)

USB Leasing LT (Delaware)

USB Nominees (UK) Limited (United Kingdom)

USB Realty Corp. (Delaware)

USB Securities Data Services Limited (Ireland)

USB Service Company Holdings, Inc. (Delaware)

USBCDE, LLC (Delaware)

VT Inc. (Alabama)

Wideworld Payment Solutions, LLC (Florida)

EX-23

Exhibit 23

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:

Form	Registration Statement No.	Purpose
S-3	333-217413	Shelf Registration Statement
S-8	333-74036	U.S. Bancorp 2001 Stock Incentive Plan
S-8	333-100671	U.S. Bancorp 401(k) Savings Plan
S-8	333-203620	U.S. Bancorp 2015 Stock Incentive Plan
S-8	333-142194	Various benefit plans of U.S. Bancorp
S-8	333-166193	Various benefit plans of U.S. Bancorp
S-8	333-189506	Various benefit plans of U.S. Bancorp
S-8	333-195375	Various benefit plans of U.S. Bancorp
S-8	333-227999	Various benefit plans of U.S. Bancorp

of our reports dated February 20, 2020, with respect to the consolidated financial statements of U.S. Bancorp and the effectiveness of internal control over financial reporting of U.S. Bancorp, included in this 2019 Annual Report to Shareholders of U.S. Bancorp, which is incorporated by reference in this Annual Report (Form 10-K) of U.S. Bancorp for the year ended December 31, 2019.

/s/ Ernst & Young LLP

Minneapolis, Minnesota

February 20, 2020

EX-24

Exhibit 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors of U.S. Bancorp, a Delaware corporation, hereby constitutes and appoints Andrew Cecere and James L. Chosy, and each of them, his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead in any and all capacities, to sign one or more Annual Reports for the Company’s fiscal year ended December 31, 2019 on Form 10-K under the Securities Exchange Act of 1934, as amended, or such other form as any such attorney-in-fact may deem necessary or desirable, any amendments thereto, and all additional amendments thereto, each in such form as they or any one of them may approve, and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done so that such Annual Report shall comply with the Securities Exchange Act of 1934, as amended, and the applicable Rules and Regulations adopted or issued pursuant thereto, as fully and to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them or their substitute or resubstitute, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, each of the undersigned has set his or her hand this 21st day of January, 2020.

/s/ Warner L. Baxter	/s/ Olivia F. Kirtley
Warner L. Baxter	Olivia F. Kirtley
/s/ Dorothy J. Bridges	/s/ Karen S. Lynch
Dorothy J. Bridges	Karen S. Lynch
/s/ Elizabeth L. Buse	/s/ Richard P. McKenney
Elizabeth L. Buse	Richard P. McKenney
/s/ Marc N. Casper	/s/ Yusuf I. Mehdi
Marc N. Casper	Yusuf I. Mehdi
/s/ Arthur D. Collins, Jr.	/s/ David B. O’Maley
Arthur D. Collins, Jr.	David B. O’Maley
/s/ Kimberly J. Harris	/s/ O’dell M. Owens, M.D., M.P.H.
Kimberly J. Harris	O’dell M. Owens, M.D., M.P.H.
/s/ Roland A. Hernandez	/s/ Craig D. Schnuck
Roland A. Hernandez	Craig D. Schnuck
/s/ Doreen Woo Ho	/s/ John P. Wiehoff
Doreen Woo Ho	John P. Wiehoff
/s/ Scott W. Wine
Scott W. Wine

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Andrew Cecere, certify that:

(1) I have reviewed this Annual Report on Form 10-K of U.S. Bancorp;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ ANDREW CECERE
	Andrew Cecere
Dated: February 20, 2020	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Terrance R. Dolan, certify that:

(1) I have reviewed this Annual Report on Form 10-K of U.S. Bancorp;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ TERRANCE R. DOLAN
	Terrance R. Dolan
Dated: February 20, 2020	Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, Chief Executive Officer and Chief Financial Officer of U.S. Bancorp, a Delaware corporation (the “Company”), do hereby certify that:

(1) The Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (the “Form 10-K”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ ANDREW CECERE	/s/ TERRANCE R. DOLAN
Andrew Cecere	Terrance R. Dolan
Chief Executive Officer	Chief Financial Officer

Dated: February 20, 2020

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Stock-Based Compensation - Summary of Certain Stock Option Activity (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Fair value of options vested	$ 10	$ 14	$ 13
Intrinsic value of options exercised	95	97	127
Cash received from options exercised	88	87	159
Tax benefit realized from options exercised	$ 24	$ 24	$ 49

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Netting Arrangements for Certain Financial Instruments and Securities Financing Activities

12 Months Ended

Dec. 31, 2019

Text Block [Abstract]

Netting Arrangements for Certain Financial Instruments and Securities Financing Activities

NOTE 20	Netting Arrangements for Certain Financial Instruments and Securities Financing
	Activities

The Company’s derivative portfolio consists of bilateral over-the-counter trades, certain interest rate derivatives and credit contracts required to be centrally cleared through clearinghouses per current regulations, and exchange-traded positions which may include U.S. Treasury and Eurodollar futures or options on U.S. Treasury futures. Of the Company’s $592.4 billion total notional amount of derivative positions at December 31, 2019, $299.4 billion related to bilateral over-the-counter trades, $272.4 billion related to those centrally cleared through clearinghouses and $20.6 billion related to those that were exchange-traded. The Company’s derivative contracts typically include offsetting rights (referred to as netting arrangements), and depending on expected volume, credit risk, and counterparty preference, collateral maintenance may be required. For all derivatives under collateral support arrangements, fair value is determined daily and, depending on the collateral maintenance requirements, the Company and a counterparty may receive or deliver collateral, based upon the net fair value of all derivative positions between the Company and the counterparty. Collateral is typically cash, but securities may be allowed under collateral arrangements with certain counterparties. Receivables and payables related to cash collateral are included in other assets and other liabilities on the Consolidated Balance Sheet, along with the related derivative asset and liability fair values. Any securities pledged to counterparties as collateral remain on the Consolidated Balance Sheet. Securities received from counterparties as collateral are not recognized on the Consolidated Balance Sheet, unless the counterparty defaults. In general, securities used as collateral can be sold, repledged or otherwise used by the party in possession. No restrictions exist on the use of cash collateral by either party. Refer to Note 19 for further discussion of the Company’s derivatives, including collateral arrangements.

As part of the Company’s treasury and broker-dealer operations, the Company executes transactions that are treated as securities sold under agreements to repurchase or securities purchased under agreements to resell, both of which are

accounted for as collateralized financings. Securities sold under agreements to repurchase include repurchase agreements and securities loaned transactions. Securities purchased under agreements to resell include reverse repurchase agreements and securities borrowed transactions. For securities sold under agreements to repurchase, the Company records a liability for the cash received, which is included in short-term borrowings on the Consolidated Balance Sheet. For securities purchased under agreements to resell, the Company records a receivable for the cash paid, which is included in other assets on the Consolidated Balance Sheet.

Securities transferred to counterparties under repurchase agreements and securities loaned transactions continue to be recognized on the Consolidated Balance Sheet, are measured at fair value, and are included in investment securities or other assets. Securities received from counterparties under reverse repurchase agreements and securities borrowed transactions are not recognized on the Consolidated Balance Sheet unless the counterparty defaults. The securities transferred under repurchase and reverse repurchase transactions typically are U.S. Treasury and agency securities, residential agency mortgage-backed securities or corporate debt securities. The securities loaned or borrowed typically are corporate debt securities traded by the Company’s broker-dealer subsidiary. In general, the securities transferred can be sold, repledged or otherwise used by the party in possession. No restrictions exist on the use of cash collateral by either party. Repurchase/reverse repurchase and securities loaned/borrowed transactions expose the Company to counterparty risk. The Company manages this risk by performing assessments, independent of business line managers, and establishing concentration limits on each counterparty. Additionally, these transactions include collateral arrangements that require the fair values of the underlying securities to be determined daily, resulting in cash being obtained or refunded to counterparties to maintain specified collateral levels.

The following table summarizes the maturities by category of collateral pledged for repurchase agreements and securities loaned transactions:

(Dollars in Millions)	Overnight and Continuous		Less Than 30 Days		30-89 Days		Greater Than 90 Days		Total
December 31, 2019
Repurchase agreements
U.S. Treasury and agencies	$	289	$	—	$	—	$	—	$	289
Residential agency mortgage-backed securities		266		—		—		—		266
Corporate debt securities		610		—		—		—		610
Total repurchase agreements		1,165		—		—		—		1,165
Securities loaned
Corporate debt securities		50		—		—		—		50
Total securities loaned		50		—		—		—		50
Gross amount of recognized liabilities	$	1,215	$	—	$	—	$	—	$	1,215
December 31, 2018
Repurchase agreements
U.S. Treasury and agencies	$	134	$	—	$	—	$	—	$	134
Residential agency mortgage-backed securities		565		—		945		470		1,980
Corporate debt securities		480		—		—		—		480
Total repurchase agreements		1,179		—		945		470		2,594
Securities loaned
Corporate debt securities		227		—		—		—		227
Total securities loaned		227		—		—		—		227
Gross amount of recognized liabilities	$	1,406	$	—	$	945	$	470	$	2,821

The Company executes its derivative, repurchase/reverse repurchase and securities loaned/borrowed transactions under the respective industry standard agreements. These agreements include master netting arrangements that allow for multiple contracts executed with the same counterparty to be viewed as a single arrangement. This allows for net settlement of a single amount on a daily basis. In the event of default, the master netting arrangement provides for close-out netting, which allows all of these positions with the defaulting counterparty to be terminated and net settled with a single payment amount.

The Company has elected to offset the assets and liabilities under netting arrangements for the balance sheet presentation of the majority of its derivative counterparties. The netting occurs at the counterparty level, and includes all assets and liabilities related to the derivative contracts, including those associated with cash collateral received or delivered. The Company has not elected to offset the assets and liabilities under netting arrangements for the balance sheet presentation of repurchase/reverse repurchase and securities loaned/borrowed transactions.

The following tables provide information on the Company’s netting adjustments, and items not offset on the Consolidated Balance Sheet but available for offset in the event of default:

	Gross Recognized Assets		Gross Amounts Offset on the Consolidated Balance Sheet(a)			Net Amounts Presented on the Consolidated Balance Sheet		Gross Amounts Not Offset on the Consolidated Balance Sheet
(Dollars in Millions)								Financial Instruments(b)			Collateral Received(c)			Net Amount
December 31, 2019
Derivative assets(d)	$	2,857	$	(982	)	$	1,875	$	(80	)	$	(116	)	$	1,679
Reverse repurchase agreements		1,021		—			1,021		(152	)		(869	)		—
Securities borrowed		1,624		—			1,624		—			(1,569	)		55
Total	$	5,502	$	(982	)	$	4,520	$	(232	)	$	(2,554	)	$	1,734
December 31, 2018
Derivative assets(d)	$	1,987	$	(942	)	$	1,045	$	(106	)	$	(16	)	$	923
Reverse repurchase agreements		205		—			205		(114	)		(91	)		—
Securities borrowed		1,069		—			1,069		—			(1,039	)		30
Total	$	3,261	$	(942	)	$	2,319	$	(220	)	$	(1,146	)	$	953

(a) Includes $429 million and $236 million of cash collateral related payables that were netted against derivative assets at December 31, 2019 and 2018, respectively.

(b) For derivative assets this includes any derivative liability fair values that could be offset in the event of counterparty default; for reverse repurchase agreements this includes any repurchase agreement payables that could be offset in the event of counterparty default; for securities borrowed this includes any securities loaned payables that could be offset in the event of counterparty default.

(c) Includes the fair value of securities received by the Company from the counterparty. These securities are not included on the Consolidated Balance Sheet unless the counterparty defaults.

(d) Excludes $40 million and $23 million at December 31, 2019 and 2018, respectively, of derivative assets not subject to netting arrangements.

	Gross Recognized Liabilities		Gross Amounts Offset on the Consolidated Balance Sheet(a)			Net Amounts Presented on the Consolidated Balance Sheet		Gross Amounts Not Offset on the Consolidated Balance Sheet
(Dollars in Millions)								Financial Instruments(b)			Collateral Pledged(c)			Net Amount
December 31, 2019
Derivative liabilities(d)	$	1,816	$	(1,067	)	$	749	$	(80	)	$	–		$	669
Repurchase agreements		1,165		–			1,165		(152	)		(1,012	)		1
Securities loaned		50		–			50		–			(49	)		1
Total	$	3,031	$	(1,067	)	$	1,964	$	(232	)	$	(1,061	)	$	671
December 31, 2018
Derivative liabilities(d)	$	1,710	$	(946	)	$	764	$	(106	)	$	–		$	658
Repurchase agreements		2,594		–			2,594		(114	)		(2,480	)		–
Securities loaned		227		–			227		–			(224	)		3
Total	$	4,531	$	(946	)	$	3,585	$	(220	)	$	(2,704	)	$	661

(a) Includes $514 million and $240 million of cash collateral related receivables that were netted against derivative liabilities at December 31, 2019 and 2018, respectively.

(b) For derivative liabilities this includes any derivative asset fair values that could be offset in the event of counterparty default; for repurchase agreements this includes any reverse repurchase agreement receivables that could be offset in the event of counterparty default; for securities loaned this includes any securities borrowed receivables that could be offset in the event of counterparty default.

(c) Includes the fair value of securities pledged by the Company to the counterparty. These securities are included on the Consolidated Balance Sheet unless the Company defaults.

(d) Excludes $167 million and $85 million at December 31, 2019 and 2018, respectively, of derivative liabilities not subject to netting arrangements.

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Short-Term Borrowings

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Short-Term Borrowings

  NOTE 12   Short-Term Borrowings(a)

The following table is a summary of short-term borrowings for the last three years:

	2019					2018					2017
(Dollars in Millions)	Amount		Rate			Amount		Rate			Amount		Rate
At year-end
Federal funds purchased	$	828		1.45	%	$	458		2.05	%	$	252		.77	%
Securities sold under agreements to repurchase		1,165		1.41			2,582		2.20			803		.61
Commercial paper		7,576		1.07			6,940		1.35			8,303		.68
Other short-term borrowings		14,154		1.94			4,159		2.68			7,293		2.13
Total	$	23,723		1.62	%	$	14,139		1.92	%	$	16,651		1.31	%
Average for the year
Federal funds purchased	$	1,457		1.94	%	$	1,070		1.70	%	$	528		.86	%
Securities sold under agreements to repurchase		1,770		2.00			2,279		1.87			917		.44
Commercial paper		8,186		1.45			6,929		.94			8,236		.49
Other short-term borrowings		6,724		2.78			11,512		2.27			5,341		1.90
Total	$	18,137		2.04	%	$	21,790		1.78	%	$	15,022		1.00	%
Maximum month-end balance
Federal funds purchased	$	3,629				$	4,532				$	600
Securities sold under agreements to repurchase		2,755					3,225					927
Commercial paper		9,431					7,846					9,950
Other short-term borrowings		14,154					16,588					7,293

(a) Interest and rates are presented on a fully taxable-equivalent basis utilizing a tax rate of 21 percent for 2019 and 2018 and 35 percent for 2017.

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Employee Benefits - Expected Future Benefit Payments (Detail) $ in Millions	Dec. 31, 2019 USD ($)
Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
2020	$ 233
2021	254
2022	267
2023	294
2024	306
2025-2029	1,811
Postretirement Welfare Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
2020	7
2021	6
2022	6
2023	6
2024	5
2025-2029	19
Medicare Part D Subsidy [Member]
Defined Benefit Plan Disclosure [Line Items]
2020	1
2021	1
2022	1
2023	1
2024	1
2025-2029	$ 2

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Employee Benefits

12 Months Ended

Dec. 31, 2019

Retirement Benefits [Abstract]

Employee Benefits

  NOTE 16 Employee Benefits

Employee Retirement Savings Plan The Company has a defined contribution retirement savings plan that covers substantially all its employees. Qualified employees are allowed to contribute up to 75 percent of their annual compensation, subject to Internal Revenue Service limits, through salary deductions under Section 401(k) of the Internal Revenue Code. Employee contributions are invested at their direction among a variety of investment alternatives. Employee contributions are 100 percent matched by the Company, up to four percent of each employee’s eligible annual compensation. The Company’s matching contribution vests immediately and is invested in the same manner as each employee’s future contribution elections. Total expense for the Company’s matching contributions was $179 million, $171 million and $156 million in 2019, 2018 and 2017, respectively.

Pension Plans The Company has a tax qualified noncontributory defined benefit pension plan that provides benefits to substantially all its employees. Participants receive annual cash balance pay credits based on eligible pay multiplied by a percentage determined by their age and years of service. Participants also receive an annual interest credit. Employees become vested upon completing three years of vesting service. For participants in the plan before 2010 that elected to stay under their existing formula, pension benefits are provided to eligible employees based on years of service, multiplied by a percentage of their final average pay. Additionally, as a result of plan mergers, a portion of pension benefits may also be provided using a cash balance benefit formula where only interest credits continue to be credited to participants’ accounts.

In general, the Company’s qualified pension plan’s funding objectives include maintaining a funded status sufficient to meet participant benefit obligations over time while reducing long-term funding requirements and pension costs. The Company has an established process for evaluating the plan, its performance and significant plan assumptions, including the assumed discount rate and the long-term rate of return (“LTROR”). Annually, the

Company’s Compensation and Human Resources Committee (the “Committee”), assisted by outside consultants, evaluates plan objectives, funding policies and plan investment policies considering its long-term investment time horizon and asset allocation strategies. The process also evaluates significant plan assumptions. Although plan assumptions are established annually, the Company may update its analysis on an interim basis in order to be responsive to significant events that occur during the year, such as plan mergers and amendments.

The Company’s funding policy is to contribute amounts to its plan sufficient to meet the minimum funding requirements of the Employee Retirement Income Security Act of 1974, as amended by the Pension Protection Act, plus such additional amounts as the Company determines to be appropriate. The Company did not contribute to its qualified pension plan in 2019 and 2018. The Company expects to contribute approximately $125 million to the plan in 2020. Any contributions made to the qualified plan are invested in accordance with established investment policies and asset allocation strategies.

In addition to the funded qualified pension plan, the Company maintains a non-qualified plan that is unfunded and provides benefits to certain employees. The assumptions used in computing the accumulated benefit obligation, the projected benefit obligation and net pension expense are substantially consistent with those assumptions used for the funded qualified plan. In 2020, the Company expects to contribute approximately $25 million to its non-qualified pension plan which equals the 2020 expected benefit payments.

Postretirement Welfare Plan In addition to providing pension benefits, the Company provides health care and death benefits to certain former employees who retired prior to January 1, 2014. Employees retiring after December 31, 2013, are not eligible for retiree health care benefits. The Company expects to contribute approximately $4 million to its postretirement welfare plan in 2020.

The following table summarizes the changes in benefit obligations and plan assets for the years ended December 31, and the funded status and amounts recognized in the Consolidated Balance Sheet at December 31 for the retirement plans:

	Pension Plans						Postretirement Welfare Plan
(Dollars in Millions)	2019			2018			2019			2018
Change In Projected Benefit Obligation(a)
Benefit obligation at beginning of measurement period	$	5,507		$	5,720		$	54		$	68
Service cost		192			208			–			–
Interest cost		249			224			2			2
Participants’ contributions		–			–			7			8
Actuarial loss (gain)		1,100			(440	)		(4	)		(7	)
Lump sum settlements		(56	)		(50	)		–			–
Benefit payments		(163	)		(155	)		(13	)		(18	)
Federal subsidy on benefits paid		–			–			1			1
Benefit obligation at end of measurement period(b)	$	6,829		$	5,507		$	47		$	54
Change In Fair Value Of Plan Assets(c)
Fair value at beginning of measurement period	$	4,936		$	5,482		$	81		$	87
Actual return on plan assets		1,095			(365	)		6			–
Employer contributions		26			24			4			5
Participants’ contributions		–			–			6			7
Lump sum settlements		(56	)		(50	)		–			–
Benefit payments		(163	)		(155	)		(13	)		(18	)
Fair value at end of measurement period	$	5,838		$	4,936		$	84		$	81
Funded (Unfunded) Status	$	(991	)	$	(571	)	$	37		$	27
Components Of The Consolidated Balance Sheet
Noncurrent benefit asset	$	–		$	–		$	37		$	27
Current benefit liability		(25	)		(23	)		–			–
Noncurrent benefit liability		(966	)		(548	)		–			–
Recognized amount	$	(991	)	$	(571	)	$	37		$	27
Accumulated Other Comprehensive Income (Loss), Pretax
Net actuarial gain (loss)	$	(2,271	)	$	(1,981	)	$	68		$	66
Net prior service credit (cost)		–			–			14			18
Recognized amount	$	(2,271	)	$	(1,981	)	$	82		$	84

(a) The increase and the decrease in the projected benefit obligation for 2019 and 2018, respectively, were primarily due to discount rate changes.

(b) At December 31, 2019 and 2018, the accumulated benefit obligation for all pension plans was $6.2 billion and $5.0 billion.

(c) The increase and the decrease in the fair value of plan assets for 2019 and 2018, respectively, were primary due to market conditions.

The following table provides information for pension plans with benefit obligations in excess of plan assets at December 31:

(Dollars in Millions)	2019		2018
Pension Plans with Projected Benefit Obligations in Excess of Plan Assets
Projected benefit obligation	$	6,829	$	5,507
Fair value of plan assets		5,838		4,936
Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets
Accumulated benefit obligation	$	553	$	467
Fair value of plan assets		–		–

The following table sets forth the components of net periodic benefit cost and other amounts recognized in accumulated other comprehensive income (loss) for the years ended December 31 for the retirement plans:

	Pension Plans									Postretirement Welfare Plan
(Dollars in Millions)	2019			2018			2017			2019			2018			2017
Components Of Net Periodic Benefit Cost
Service cost	$	192		$	208		$	187		$	–		$	–		$	–
Interest cost		249			224			220			2			2			2
Expected return on plan assets		(383	)		(379	)		(284	)		(3	)		(3	)		(3	)
Prior service cost (credit) and transition obligation (asset) amortization		–			–			(2	)		(3	)		(3	)		(3	)
Actuarial loss (gain) amortization		98			146			127			(6	)		(6	)		(5	)
Net periodic benefit cost	$	156		$	199		$	248		$	(10	)	$	(10	)	$	(9	)
Other Changes In Plan Assets And Benefit Obligations
Recognized In Other Comprehensive Income (Loss)
Net actuarial gain (loss) arising during the year	$	(388	)	$	(305	)	$	(48	)	$	7		$	3		$	7
Net actuarial loss (gain) amortized during the year		98			146			127			(6	)		(6	)		(5	)
Net prior service cost (credit) and transition obligation (asset) amortized during the year		–			–			(2	)		(3	)		(3	)		(3	)
Total recognized in other comprehensive income (loss)	$	(290	)	$	(159	)	$	77		$	(2	)	$	(6	)	$	(1	)
Total recognized in net periodic benefit cost and other comprehensive income (loss)	$	(446	)	$	(358	)	$	(171	)	$	8		$	4		$	8

The following table sets forth weighted-average assumptions used to determine the projected benefit obligations at December 31:

	Pension Plans						Postretirement Welfare Plan
(Dollars in Millions)	2019			2018			2019			2018
Discount rate(a)		3.40	%		4.45	%		2.80	%		4.05	%
Cash balance interest crediting rate		3.00			3.00			*			*
Rate of compensation increase(b)		3.56			3.52			*			*
Health care cost trend rate(c)
Prior to age 65								6.25	%		6.50	%
After age 65								6.25	%		10.00	%

(a) The discount rates were developed using a cash flow matching bond model with a modified duration for the qualified pension plan, non-qualified pension plan and postretirement welfare plan of 15.8, 12.3, and 6.1 years, respectively, for 2019, and 14.7, 11.5 and 5.9 years, respectively, for 2018.

(b) Determined on an active liability-weighted basis.

(c) The 2019 and 2018 pre-65 and post-65 rates are both assumed to decrease gradually to 5.00 percent by 2025 and remain at this level thereafter.

* Not applicable

The following table sets forth weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:

	Pension Plans									Postretirement Welfare Plan
(Dollars in Millions)	2019			2018			2017			2019			2018			2017
Discount rate(a)		4.45	%		3.84	%		4.27	%		4.05	%		3.34	%		3.57	%
Cash balance interest crediting rate		3.00			3.00			3.00			*			*			*
Expected return on plan assets(b)		7.25			7.25			7.25			3.50			3.50			3.50
Rate of compensation increase(c)		3.52			3.56			3.58			*			*			*
Health care cost trend rate(d)
Prior to age 65											6.50	%		6.75	%		7.00	%
After age 65											10.00			6.75			7.00

(a) The discount rates were developed using a cash flow matching bond model with a modified duration for the qualified pension plan, non-qualified pension plan and postretirement welfare plan of 14.7, 11.5, and 5.9 years, respectively, for 2019, and 15.8, 12.3 and 6.1 years, respectively, for 2018.

(b) With the help of an independent pension consultant, the Company considers several sources when developing its expected long-term rates of return on plan assets assumptions, including, but not limited to, past returns and estimates of future returns given the plans’ asset allocation, economic conditions, and peer group LTROR information. The Company determines its expected long-term rates of return reflecting current economic conditions and plan assets.

(c) Determined on an active liability weighted basis.

(d) The 2019, 2018 and 2017 pre-65 and post-65 rates are both assumed to decrease gradually to 5.00 percent by 2025 and remain at that level thereafter.

* Not applicable

Investment Policies and Asset Allocation In establishing its investment policies and asset allocation strategies, the Company considers expected returns and the volatility associated with different strategies. An independent consultant performs modeling that projects numerous outcomes using a broad range of possible scenarios, including a mix of possible rates of inflation and economic growth. Starting with current economic information, the model bases its projections on past relationships between inflation, fixed income rates and equity returns when these types of economic conditions have existed over the previous 30 years, both in the United States and in foreign countries. Estimated future returns and other actuarially determined adjustments are also considered in calculating the estimated return on assets.

Generally, based on historical performance of the various investment asset classes, investments in equities have outperformed other investment classes but are subject to higher volatility. In an effort to minimize volatility, while recognizing the long-term up-side potential of investing in equities, the Committee has determined that a target asset allocation of 35 percent long duration bonds, 30 percent global equities, 10 percent real estate equities, 10 percent private equity funds, 5 percent domestic mid-small cap equities, 5 percent emerging markets equities, and 5 percent hedge funds is appropriate.

At December 31, 2019 and 2018, plan assets included an asset management arrangement with a related party totaling $57 million and $52 million, respectively.

In accordance with authoritative accounting guidance, the Company groups plan assets into a three-level hierarchy for valuation techniques used to measure their fair value based on whether the valuation inputs are observable or unobservable. Refer to Note 21 for further discussion on these levels.

The assets of the qualified pension plan include investments in equity and U.S. Treasury securities whose fair values are determined based on quoted prices in active markets and are classified within Level 1 of the fair value hierarchy. The qualified pension plan also invests in U.S. agency, corporate and municipal debt securities, which are all valued based on observable market prices or data by third-party pricing services, and mutual funds which are valued based on quoted net asset values provided by the trustee of the fund; these assets are classified as Level 2. Additionally, the qualified pension plan invests in certain assets that are valued based on net asset values as a practical expedient, including investments in collective investment funds, hedge funds, and private equity funds; the net asset values are provided by the fund trustee or administrator and are not classified in the fair value hierarchy.

The following table summarizes plan investment assets measured at fair value at December 31:

	Qualified Pension Plan																Postretirement Welfare Plan
	2019								2018								2019		2018
(Dollars in Millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total		Level 1		Level 1
Cash and cash equivalents	$	58	$	–	$	–	$	58	$	54	$	–	$	–	$	54	$	40	$	42
Debt securities		727		1,073		–		1,800		631		904		–		1,535		–		–
Corporate stock
Real estate equity securities(a)		–		–		–		–		109		–		–		109		–		–
Mutual funds
Debt securities		–		304		–		304		–		295		–		295		–		–
Emerging markets equity securities		–		136		–		136		–		113		–		113		–		–
Other		–		–		3		3		–		–		3		3		–		–
	$	785	$	1,513	$	3		2,301	$	794	$	1,312	$	3		2,109		40		42
Plan investment assets not classified in fair value hierarchy(b):
Collective investment funds
Domestic equity securities								1,328								1,183		27		24
Mid-small cap equity securities(c)								323								340		–		–
International equity securities								752								643		17		15
Real estate securities								547								146		–		–
Hedge funds(d)								283								290		–		–
Private equity funds(e)								304								225		–		–
Total plan investment assets at fair value							$	5,838							$	4,936	$	84	$	81

(a) At December 31, 2018, securities included $56 million in domestic equities and $53 million in international equities.

(b) These investments are valued based on net asset value per share as a practical expedient; fair values are provided to reconcile to total investment assets of the plans at fair value.

(c) At December 31, 2019 and 2018, securities included $323 million and $340 million in domestic equities, respectively.

(d) This category consists of several investment strategies diversified across several hedge fund managers.

(e) This category consists of several investment strategies diversified across several private equity fund managers.

The following table summarizes the changes in fair value for qualified pension plan investment assets measured at fair value using significant unobservable inputs (Level 3) for the years ended December 31:

	2019		2018		2017
(Dollars in Millions)	Other		Other		Other
Balance at beginning of period	$	3	$	2	$	1
Unrealized gains (losses) relating to assets still held at end of year		–		–		–
Purchases, sales, and settlements, net		–		1		1
Balance at end of period	$	3	$	3	$	2

The following benefit payments are expected to be paid from the retirement plans for the years ended December 31:

(Dollars in Millions)	Pension Plans		Postretirement Welfare Plan(a)		Medicare Part D Subsidy Receipts
2020	$	233	$	7	$	1
2021		254		6		1
2022		267		6		1
2023		294		6		1
2024		306		5		1
2025-2029		1,811		19		2

(a) Net of expected retiree contributions and before Medicare Part D subsidy.

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Employee Benefits - Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost (Parenthetical) (Detail)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Net Periodic Benefit Cost Assumptions [Member] | Prior to age 65 [Member]
Defined Benefit Plan Disclosure [Line Items]
Assumed rate decrease	5.00%	5.00%	5.00%
Health care cost trend rate to decrease Period	2025	2025	2025
Net Periodic Benefit Cost Assumptions [Member] | After age 65 [Member]
Defined Benefit Plan Disclosure [Line Items]
Assumed rate decrease	5.00%	5.00%	5.00%
Health care cost trend rate to decrease Period	2025	2025	2025
Net Periodic Benefit Cost Assumptions [Member] | Postretirement Welfare Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Assumed plan duration	5 years 10 months 24 days	6 years 1 month 6 days
Net Periodic Benefit Cost Assumptions [Member] | Qualified Plan [Member] | Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Assumed plan duration	14 years 8 months 12 days	15 years 9 months 18 days
Net Periodic Benefit Cost Assumptions [Member] | Nonqualified Plan [Member] | Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Assumed plan duration	11 years 6 months	12 years 3 months 18 days

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Long-Term Debt - Maturities of Long-term Debt Outstanding (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
2020	$ 3,772
2021	9,430
2022	6,298
2023	2,799
2024	5,663
Thereafter	12,205
Total	40,167	$ 41,340
Parent Company [Member]
Debt Instrument [Line Items]
2021	2,696
2022	3,790
2024	5,657
Thereafter	6,459
Total	$ 18,602	$ 16,291

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Shareholders' Equity - Common Stock Repurchased (Detail) - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Equity [Abstract]
Common stock repurchased shares	81	54	49
Purchase of treasury stock	$ 4,515	$ 2,844	$ 2,622

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Intangible Assets - Aggregate Amortization Expense (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Amortization of intangibles	$ 168	$ 161	$ 175
Merchant Processing Contracts [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization of intangibles	45	24	24
Core Deposit Benefits [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization of intangibles	22	26	30
Trust Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization of intangibles	10	11	14
Other Identified Intangibles [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization of intangibles	$ 91	$ 100	$ 107

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Guarantees and Contingent Liabilities - Contract or Notional Amount of Letters of Credit (Detail) $ in Millions	Dec. 31, 2019 USD ($)
Commercial [Member]
Letters Of Credit [Line Items]
Contract or notional amount of letters of credit	$ 367
Commercial [Member] | Less Than One Year [Member]
Letters Of Credit [Line Items]
Contract or notional amount of letters of credit	339
Commercial [Member] | Greater Than One Year [Member]
Letters Of Credit [Line Items]
Contract or notional amount of letters of credit	28
Standby Letters of Credit [Member]
Letters Of Credit [Line Items]
Contract or notional amount of letters of credit	10,258
Standby Letters of Credit [Member] | Less Than One Year [Member]
Letters Of Credit [Line Items]
Contract or notional amount of letters of credit	4,676
Standby Letters of Credit [Member] | Greater Than One Year [Member]
Letters Of Credit [Line Items]
Contract or notional amount of letters of credit	$ 5,582

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Investment Securities - Gross Unrealized Losses and Fair Value of Company's Investment Securities (Detail) $ in Millions	Dec. 31, 2019 USD ($)
Continuous Gross Unrealized Losses And Fair Value [Abstract]
Fair Value Less Than 12 Months	$ 21,983
Unrealized Losses Less Than 12 Months	(118)
Fair Value 12 Months or Greater	30,613
Unrealized Losses 12 Months or Greater	(330)
Fair Value Total	52,596
Unrealized Losses Total	(448)
Other Asset-Backed Securities [Member]
Continuous Gross Unrealized Losses And Fair Value [Abstract]
Fair Value 12 Months or Greater	2
Fair Value Total	2
U.S. Treasury and Agencies [Member]
Continuous Gross Unrealized Losses And Fair Value [Abstract]
Fair Value Less Than 12 Months	3,869
Unrealized Losses Less Than 12 Months	(40)
Fair Value 12 Months or Greater	6,265
Unrealized Losses 12 Months or Greater	(27)
Fair Value Total	10,134
Unrealized Losses Total	(67)
Residential Mortgage-Backed Securities [Member]
Continuous Gross Unrealized Losses And Fair Value [Abstract]
Fair Value Less Than 12 Months	16,292
Unrealized Losses Less Than 12 Months	(46)
Fair Value 12 Months or Greater	24,346
Unrealized Losses 12 Months or Greater	(303)
Fair Value Total	40,638
Unrealized Losses Total	(349)
Commercial agency mortgage-backed securities [Member]
Continuous Gross Unrealized Losses And Fair Value [Abstract]
Fair Value Less Than 12 Months	1,453
Unrealized Losses Less Than 12 Months	(29)
Fair Value Total	1,453
Unrealized Losses Total	(29)
Obligations of State and Political Subdivisions [Member]
Continuous Gross Unrealized Losses And Fair Value [Abstract]
Fair Value Less Than 12 Months	365
Unrealized Losses Less Than 12 Months	(3)
Fair Value Total	365
Unrealized Losses Total	(3)
Corporate Debt Securities [Member]
Continuous Gross Unrealized Losses And Fair Value [Abstract]
Fair Value Less Than 12 Months	4
Fair Value Total	$ 4

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Fair Values of Assets and Liabilities - Estimated Fair Values of Financial Instruments (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Financial Assets
Cash and due from banks	$ 22,405	$ 21,453	$ 19,505	$ 15,705
Investment securities held-to-maturity		46,050
Loans	292,082	282,837
Financial Liabilities
Time deposits	42,894	44,554
Long-term debt	40,167	41,340
Carrying Amount [Member]
Financial Assets
Cash and due from banks	22,405	21,453
Federal funds sold and securities purchased under resale agreements	1,036	306
Investment securities held-to-maturity		46,050
Loans held for sale	45	21
Loans	292,082	282,837
Other	1,923	2,412
Financial Liabilities
Time deposits	42,894	44,554
Short-term borrowings	22,095	12,921
Long-term debt	40,167	41,340
Other	3,678	1,726
Fair Value [Member]
Financial Assets
Cash and due from banks	22,405	21,453
Federal funds sold and securities purchased under resale agreements	1,036	306
Investment securities held-to-maturity		44,964
Loans held for sale	43	21
Loans	297,241	284,790
Other	1,923	2,412
Financial Liabilities
Time deposits	42,831	44,140
Short-term borrowings	21,461	12,678
Long-term debt	41,077	41,003
Other	3,678	1,726
Fair Value [Member] | Level 1 [Member]
Financial Assets
Cash and due from banks	22,405	21,453
Investment securities held-to-maturity		4,594
Fair Value [Member] | Level 2 [Member]
Financial Assets
Federal funds sold and securities purchased under resale agreements	1,036	306
Investment securities held-to-maturity		40,359
Other	929	1,241
Financial Liabilities
Time deposits	42,831	44,140
Short-term borrowings	21,461	12,678
Long-term debt	41,077	41,003
Other	1,342
Fair Value [Member] | Level 3 [Member]
Financial Assets
Investment securities held-to-maturity		11
Loans held for sale	43	21
Loans	297,241	284,790
Other	994	1,171
Financial Liabilities
Other	$ 2,336	$ 1,726

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Loans and Allowance for Credit Losses - Additional Information (Detail) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($) MortgageLoan SecurityLoan	Dec. 31, 2018 USD ($)
Loans and Allowance for Credit Losses [Line Items]
Loans pledged at the Federal Home Loan Bank	$ 96,200	$ 88,700
Loans pledged at the Federal Reserve Bank	76,300	70,100
Unearned interest and deferred fees and costs on originated loans	781	872
Foreclosed residential real estate property included in other real estate owned	74	106
Foreclosed residential real estate related to mortgage loans whose payments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs	155	235
Residential mortgage loans secured by residential real estate in process of foreclosure	$ 1,500	1,500
Number of residential mortgage loans, home equity and second mortgage loans, and GNMA loans where trial period was unsuccessful and no longer eligible for a permanent modification | MortgageLoan	826
Outstanding balance of residential mortgage loans, home equity and second mortgage loans, and GNMA loans where trial period was unsuccessful and no longer eligible for a permanent modification	$ 111
Nonperforming loans	692	817
Other real estate non-performing	78	111
Non-performing assets other	59	61
Non-performing assets	829	989
Government National Mortgage Association [Member]
Loans and Allowance for Credit Losses [Line Items]
Residential mortgage loans secured by residential real estate in process of foreclosure	$ 1,200	1,200
Home Equity and Second Mortgages [Member]
Loans and Allowance for Credit Losses [Line Items]
Number of loans in trial period | SecurityLoan	17
Outstanding balance of loans in trial period	$ 1
Estimated post-modification balance of loans in trial period	$ 1
Residential Mortgages [Member]
Loans and Allowance for Credit Losses [Line Items]
Number of loans in trial period | SecurityLoan	41
Outstanding balance of loans in trial period	$ 6
Estimated post-modification balance of loans in trial period	6
Nonperforming loans	$ 241	$ 296
Government National Mortgage Association [Member]
Loans and Allowance for Credit Losses [Line Items]
Number of loans in trial period | SecurityLoan	990
Outstanding balance of loans in trial period	$ 136
Estimated post-modification balance of loans in trial period	$ 135

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Deposits - Maturities of Time Deposits Outstanding (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Banking and Thrift [Abstract]
2020	$ 37,731
2021	2,700
2022	1,183
2023	673
2024	602
Thereafter	5
Total	$ 42,894	$ 44,554

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Derivative Instruments - Asset and Liability Management Derivative Positions of Company (Parenthetical) (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Swap [Member] | Visa Class B Shares [Member]
Derivative [Line Items]
Notional Value, Liabilities	$ 1,800	$ 1,500
Fair Value, Liabilities	$ 165	$ 84
Derivative Liability Average Remaining Maturity Period	2 years 6 months	1 year 6 months
Underwriting Purchase and Sale Commitments [Member]
Derivative [Line Items]
Notional Value, Assets	$ 34	$ 1
Notional Value, Liabilities	$ 34	$ 1

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Shareholder' Equity (Tables)

12 Months Ended

Dec. 31, 2019

Federal Home Loan Banks [Abstract]

Number of Shares Issued and Outstanding and Carrying Amount of Preferred Stock

The number of shares issued and outstanding and the carrying amount of each outstanding series of the Company’s preferred stock were as follows:

	2019								2018
At December 31 (Dollars in Millions)	Shares Issued and Outstanding		Liquidation Preference		Discount		Carrying Amount		Shares Issued and Outstanding		Liquidation Preference		Discount		Carrying Amount
Series A		12,510	$	1,251	$	145	$	1,106		12,510	$	1,251	$	145	$	1,106
Series B		40,000		1,000		–		1,000		40,000		1,000		–		1,000
Series F		44,000		1,100		12		1,088		44,000		1,100		12		1,088
Series H		20,000		500		13		487		20,000		500		13		487
Series I		30,000		750		5		745		30,000		750		5		745
Series J		40,000		1,000		7		993		40,000		1,000		7		993
Series K		23,000		575		10		565		23,000		575		10		565
Total preferred stock(a)		209,510	$	6,176	$	192	$	5,984		209,510	$	6,176	$	192	$	5,984

(a) The par value of all shares issued and outstanding at December 31, 2019 and 2018, was $1.00 per share.

Common Stock Repurchased

The following table summarizes the Company’s common stock repurchased in each of the last three years:

(Dollars and Shares in Millions)	Shares		Value
2019		81	$	4,515
2018		54		2,844
2017		49		2,622

Reconciliation of Transactions Affecting Accumulated Other Comprehensive Income (Loss) Included in Shareholders' Equity

Shareholders’ equity is affected by transactions and valuations of asset and liability positions that require adjustments to accumulated other comprehensive income (loss). The reconciliation of the transactions affecting accumulated other comprehensive income (loss) included in shareholders’ equity for the years ended December 31, is as follows:

(Dollars in Millions)	Unrealized Gains (Losses) on Investment Securities Available-For-Sale			Unrealized Gains (Losses) on Investment Securities Transferred From Available-For-Sale to Held-To-Maturity			Unrealized Gains (Losses) on Derivative Hedges			Unrealized Gains (Losses) on Retirement Plans			Foreign Currency Translation			Total
2019
Balance at beginning of period	$	(946	)	$	14		$	112		$	(1,418	)	$	(84	)	$	(2,322	)
Changes in unrealized gains and losses		1,693			–			(229	)		(380	)		–			1,084
Unrealized gains and losses on held-to-maturity investment securities transferred to available-for-sale		150			(9	)		–			–			–			141
Foreign currency translation adjustment(a)		–			–			–			–			26			26
Reclassification to earnings of realized gains and losses		(73	)		(7	)		11			89			–			20
Applicable income taxes		(445	)		2			55			73			(7	)		(322	)
Balance at end of period	$	379		$	–		$	(51	)	$	(1,636	)	$	(65	)	$	(1,373	)
2018
Balance at beginning of period	$	(357	)	$	17		$	71		$	(1,066	)	$	(69	)	$	(1,404	)
Revaluation of tax related balances(b)		(77	)		4			15			(229	)		(13	)		(300	)
Changes in unrealized gains and losses		(656	)		–			39			(302	)		–			(919	)
Foreign currency translation adjustment(a)		–			–			–			–			3			3
Reclassification to earnings of realized gains and losses		(30	)		(9	)		(5	)		137			–			93
Applicable income taxes		174			2			(8	)		42			(5	)		205
Balance at end of period	$	(946	)	$	14		$	112		$	(1,418	)	$	(84	)	$	(2,322	)
2017
Balance at beginning of period	$	(431	)	$	25		$	55		$	(1,113	)	$	(71	)	$	(1,535	)
Changes in unrealized gains and losses		178			–			(5	)		(41	)		–			132
Foreign currency translation adjustment(a)		–			–			–			–			(2	)		(2	)
Reclassification to earnings of realized gains and losses		(57	)		(13	)		30			117			–			77
Applicable income taxes		(47	)		5			(9	)		(29	)		4			(76	)
Balance at end of period	$	(357	)	$	17		$	71		$	(1,066	)	$	(69	)	$	(1,404	)

(a) Represents the impact of changes in foreign currency exchange rates on the Company’s investment in foreign operations and related hedges.

(b) Reflects the adoption of new accounting guidance on January 1, 2018 to reclassify the impact of the reduced federal statutory rate for corporations included in 2017 tax reform legislation from accumulated other comprehensive income to retained earnings.

Impact to Net Income for Items Reclassified out of Accumulated Other Comprehensive Income and into Earnings

Additional detail about the impact to net income for items reclassified out of accumulated other comprehensive income (loss) and into earnings for the years ended December 31, is as follows:

	Impact to Net Income									Affected Line Item in the Consolidated Statement of Income
(Dollars in Millions)	2019			2018			2017
Unrealized gains (losses) on investment securities available-for-sale
Realized gains (losses) on sale of investment securities	$	73		$	30		$	57		Total securities gains (losses), net
		(18	)		(7	)		(22	)	Applicable income taxes
		55			23			35		Net-of-tax
Unrealized gains (losses) on investment securities transferred from available-for-sale to held-to-maturity
Amortization of unrealized gains		7			9			13		Interest income
		(2	)		(2	)		(5	)	Applicable income taxes
		5			7			8		Net-of-tax
Unrealized gains (losses) on derivative hedges
Realized gains (losses) on derivative hedges		(11	)		5			(30	)	Interest expense
		3			(2	)		11		Applicable income taxes
		(8	)		3			(19	)	Net-of-tax
Unrealized gains (losses) on retirement plans
Actuarial gains (losses) and prior service cost (credit) amortization		(89	)		(137	)		(117	)	Other noninterest expense
		22			35			45		Applicable income taxes
		(67	)		(102	)		(72	)	Net-of-tax
Total impact to net income	$	(15	)	$	(69	)	$	(48	)

Components of regulatory capital and summary of regulatory capital requirements and ratios

The following tables provide a summary of the regulatory capital requirements in effect, along with the actual components and ratios  for the Company and its bank subsidiary, at December 31, 2019 and 2018:

	U.S. Bancorp						U.S. Bank National Association
(Dollars in Millions)	2019			2018			2019			2018
Basel III standardized approach:
Common shareholders’ equity	$	45,869		$	45,045		$	48,592		$	47,728
Less intangible assets
Goodwill (net of deferred tax liability)		(8,788	)		(8,549	)		(8,806	)		(8,566	)
Other disallowed intangible assets		(677	)		(601	)		(710	)		(732	)
Other(a)		(691	)		(1,171	)		38			(112	)
Total common equity tier 1 capital		35,713			34,724			39,114			38,318
Qualifying preferred stock		5,984			5,984			–			–
Noncontrolling interests eligible for tier 1 capital		28			36			28			36
Other(b)		(4	)		(3	)		(4	)		(3	)
Total tier 1 capital		41,721			40,741			39,138			38,351
Eligible portion of allowance for credit losses		4,491			4,441			4,491			4,441
Subordinated debt and noncontrolling interests eligible for tier 2 capital		3,532			2,996			3,365			3,168
Total tier 2 capital		8,023			7,437			7,856			7,609
Total risk-based capital	$	49,744		$	48,178		$	46,994		$	45,960
Risk-weighted assets	$	391,269		$	381,661		$	383,560		$	374,299
Common equity tier 1 capital as a percent of risk-weighted assets		9.1	%		9.1	%		10.2	%		10.2	%
Tier 1 capital as a percent of risk-weighted assets		10.7			10.7			10.2			10.2
Total risk-based capital as a percent of risk-weighted assets		12.7			12.6			12.3			12.3
Tier 1 capital as a percent of adjusted quarterly average assets (leverage ratio)		8.8			9.0			8.4			8.6
Basel III advanced approaches(c):
Common shareholders’ equity				$	45,045					$	47,728
Less intangible assets
Goodwill (net of deferred tax liability)					(8,549	)					(8,566	)
Other disallowed intangible assets					(601	)					(732	)
Other(a)					(1,171	)					(112	)
Total common equity tier 1 capital					34,724						38,318
Qualifying preferred stock					5,984						–
Noncontrolling interests eligible for tier 1 capital					36						36
Other(b)					(3	)					(3	)
Total tier 1 capital					40,741						38,351
Eligible portion of allowance for credit losses					1,399						1,364
Subordinated debt and noncontrolling interests eligible for tier 2 capital					2,996						3,168
Total tier 2 capital					4,395						4,532
Total risk-based capital				$	45,136					$	42,883
Risk-weighted assets				$	295,002					$	287,897
Common equity tier 1 capital as a percent of risk-weighted assets					11.8	%					13.3	%
Tier 1 capital as a percent of risk-weighted assets					13.8						13.3
Total risk-based capital as a percent of risk-weighted assets					15.3						14.9
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure (total leverage exposure ratio)		7.0	%		7.2			6.7	%		6.9

(a) Includes the impact of items included in other comprehensive income (loss), such as unrealized gains (losses) on available-for-sale securities, accumulated net gains on cash flow hedges, pension liability adjustments, etc., and the portion of deferred tax assets related to net operating loss and tax credit carryforwards not eligible for common equity tier 1 capital.

(b) Includes the remaining portion of deferred tax assets not eligible for total tier 1 capital.

(c) Effective December 31, 2019, the Company is no longer subject to calculating its, or its bank subsidiary’s, capital adequacy as a percentage of risk-weighted assets under advanced approaches.

	Minimum(a)			Well- Capitalized
Bank Regulatory Capital Requirements
2019
Common equity tier 1 capital as a percent of risk-weighted assets		7.000	%		6.500	%
Tier 1 capital as a percent of risk-weighted assets		8.500			8.000
Total risk-based capital as a percent of risk-weighted assets		10.500			10.000
Tier 1 capital as a percent of adjusted quarterly average assets (leverage ratio)		4.000			5.000
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure (total leverage exposure ratio)		3.000			3.000
2018
Common equity tier 1 capital as a percent of risk-weighted assets		6.375	%		6.500	%
Tier 1 capital as a percent of risk-weighted assets		7.875			8.000
Total risk-based capital as a percent of risk-weighted assets		9.875			10.000
Tier 1 capital as a percent of adjusted quarterly average assets (leverage ratio)		4.000			5.000
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure (total leverage exposure ratio)		3.000			3.000

(a) The minimum common equity tier 1 capital, tier 1 capital and total risk-based capital ratio requirements reflect a capital conservation buffer requirement of 2.5 percent and 1.875 percent for 2019 and 2018, respectively. Banks and financial services holding companies must maintain minimum capital levels, including a capital conservation buffer requirement, to avoid limitations on capital distributions and certain discretionary compensation payments.

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Derivative Instruments - Summary of Cumulative Hedging Adjustments and the Carrying Amount of Assets (Liabilities) Designated in Fair Value Hedges (Detail) - Fair Value Hedges [Member] - Long-term Debt Securities [Member] - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Derivative Instruments, Gain (Loss) [Line Items]
Carrying amount of the hedged assets (liabilities), Long-term debt	$ 23,195
Cumulative hedging Adjustment included in the carrying amount of the hedged assets (liabilities)	$ 35	$ (27)

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Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible assets consisted of the following:

At December 31 (Dollars in Millions)	Estimated Life(a)	Amortization Method(b)		Balance
				2019		2018
Goodwill			(c)	$	9,655	$	9,369
Merchant processing contracts	6 years/7 years		SL/AC		225		155
Core deposit benefits	22 years/5 years		SL/AC		82		104
Mortgage servicing rights			(c)		2,546		2,791
Trust relationships	10 years/7 years		SL/AC		27		34
Other identified intangibles	6 years/4 years		SL/AC		343		308
Total				$	12,878	$	12,761

(a) Estimated life represents the amortization period for assets subject to the straight line method and the weighted-average or life of the underlying cash flows amortization period for intangibles subject to accelerated methods. If more than one amortization method is used for a category, the estimated life for each method is calculated and reported separately.

(b) Amortization methods:         SL = straight line method

                                                      AC = accelerated methods generally based on cash flows

(c) Goodwill is evaluated for impairment, but not amortized. Mortgage servicing rights are recorded at fair value, and are not amortized.

Aggregate Amortization Expense

Aggregate amortization expense consisted of the following:

Year Ended December 31 (Dollars in Millions)	2019		2018		2017
Merchant processing contracts	$	45	$	24	$	24
Core deposit benefits		22		26		30
Trust relationships		10		11		14
Other identified intangibles		91		100		107
Total	$	168	$	161	$	175

Estimated Amortization Expense

The estimated amortization expense for the next five years is as follows:

(Dollars in Millions)
2020	$	155
2021		130
2022		109
2023		76
2024		60

Changes in Carrying Value of Goodwill

The following table reflects the changes in the carrying value of goodwill for the years ended December 31, 2019, 2018 and 2017: 

(Dollars in Millions)	Corporate and Commercial Banking		Consumer and Business Banking			Wealth Management and Investment Services			Payment Services			Treasury and Corporate Support		Consolidated Company
Balance at December 31, 2016	$	1,647	$	3,681		$	1,566		$	2,450		$	–	$	9,344
Goodwill acquired		–		–			–			62			–		62
Foreign exchange translation and other		–		–			3			25			–		28
Balance at December 31, 2017	$	1,647	$	3,681		$	1,569		$	2,537		$	–	$	9,434
Goodwill acquired		–		–			–			105			–		105
Disposal		–		(155	)		–			–			–		(155	)
Foreign exchange translation and other		–		(51	)		49			(13	)		–		(15	)
Balance at December 31, 2018	$	1,647	$	3,475		$	1,618		$	2,629		$	–	$	9,369
Goodwill acquired		–		–			–			285			–		285
Foreign exchange translation and other		–		–			(1	)		2			–		1
Balance at December 31, 2019	$	1,647	$	3,475		$	1,617		$	2,916		$	–	$	9,655

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Components of Income Tax Expense

The components of income tax expense were:

Year Ended December 31 (Dollars in Millions)	2019			2018			2017
Federal
Current	$	1,162		$	1,287		$	2,086
Deferred		166			(148	)		(1,180	)
Federal income tax		1,328			1,139			906
State
Current		379			395			201
Deferred		(59	)		20			157
State income tax		320			415			358
Total income tax provision	$	1,648		$	1,554		$	1,264

Reconciliation of Expected Income Tax Expense at Federal Statutory Rate of 21 Percent and 35 Percent to Company's Applicable Income Tax Expense

A reconciliation of expected income tax expense at the federal statutory rate of 21 percent for 2019 and 2018 and 35 percent for 2017 to the Company’s applicable income tax expense follows:

Year Ended December 31 (Dollars in Millions)	2019			2018			2017
Tax at statutory rate	$	1,805		$	1,822		$	2,631
State income tax, at statutory rates, net of federal tax benefit		355			352			281
Tax effect of
Revaluation of tax related assets and liabilities(a)		—			—			(910	)
Tax credits and benefits, net of related expenses		(424	)		(513	)		(774	)
Tax-exempt income		(120	)		(130	)		(200	)
Nondeductible legal and regulatory expenses		23			52			213
Other items(b)		9			(29	)		23
Applicable income taxes	$	1,648		$	1,554		$	1,264

(a) In late 2017, tax legislation was enacted that, among other provisions, reduced the federal statutory rate for corporations from 35 percent to 21 percent effective in 2018. In accordance with generally accepted accounting principles, the Company revalued its deferred tax assets and liabilities at December 31, 2017, resulting in an estimated net tax benefit of $910 million, which the Company recorded in 2017.

(b) Includes excess tax benefits associated with stock-based compensation and adjustments related to deferred tax assets and liabilities.

Reconciliation of Changes in Federal, State and Foreign Unrecognized Tax Position Balances

A reconciliation of the changes in the federal, state and foreign uncertain tax position balances are summarized as follows:

Year Ended December 31 (Dollars in Millions)	2019			2018			2017
Balance at beginning of period	$	335		$	287		$	302
Additions for tax positions taken in prior years		168			93			3
Additions for tax positions taken in the current year		6			10			9
Exam resolutions		(62	)		(51	)		(23	)
Statute expirations		(15	)		(4	)		(4	)
Balance at end of period	$	432		$	335		$	287

Significant Components of the Company's Net Deferred Tax Asset (Liability)

The significant components of the Company’s net deferred tax asset (liability) follows:

At December 31 (Dollars in Millions)	2019			2018
Deferred Tax Assets
Federal, state and foreign net operating loss and credit carryforwards	$	2,592		$	2,699
Allowance for credit losses		1,155			1,141
Accrued expenses		485			508
Obligation for operating leases		328			—
Pension and postretirement benefits		193			85
Partnerships and other investment assets		91			69
Stock compensation		78			79
Fixed assets		2			58
Securities available-for-sale and financial instruments		—			278
Other deferred tax assets, net		257			268
Gross deferred tax assets		5,181			5,185
Deferred Tax Liabilities
Leasing activities		(2,700	)		(2,652	)
Goodwill and other intangible assets		(763	)		(703	)
Mortgage servicing rights		(546	)		(642	)
Right of use assets		(282	)		—
Loans		(139	)		(168	)
Securities available-for-sale and financial instruments		(111	)		—
Other deferred tax liabilities, net		(131	)		(102	)
Gross deferred tax liabilities		(4,672	)		(4,267	)
Valuation allowance		(127	)		(109	)
Net Deferred Tax Asset	$	382		$	809

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Netting Arrangements for Certain Financial Instruments and Securities Financing Activities - Summary of Maturities by Category of Collateral Pledged for Repurchase Agreements and Securities Loaned Transactions (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	$ 1,165	$ 2,594
Securities loaned	50	227
Gross amount of recognized liabilities for repurchase agreements and securities loaned	1,215	2,821
Overnight and Continuous [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	1,165	1,179
Securities loaned	50	227
Gross amount of recognized liabilities for repurchase agreements and securities loaned	1,215	1,406
30-89 Days [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements		945
Gross amount of recognized liabilities for repurchase agreements and securities loaned		945
Greater than 90 Days [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements		470
Gross amount of recognized liabilities for repurchase agreements and securities loaned		470
U.S. Treasury and Agencies [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	289	134
U.S. Treasury and Agencies [Member] | Overnight and Continuous [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	289	134
Residential Mortgage-Backed Securities [Member] | Agency [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	266	1,980
Residential Mortgage-Backed Securities [Member] | Overnight and Continuous [Member] | Agency [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	266	565
Residential Mortgage-Backed Securities [Member] | 30-89 Days [Member] | Agency [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements		945
Residential Mortgage-Backed Securities [Member] | Greater than 90 Days [Member] | Agency [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements		470
Corporate Debt Securities [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	610	480
Securities loaned	50	227
Corporate Debt Securities [Member] | Overnight and Continuous [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	610	480
Securities loaned	$ 50	$ 227

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Mortgage Servicing Rights - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Transfers and Servicing of Financial Assets [Abstract]
Residential mortgage loans serviced for others including subserviced mortgages with no corresponding MSRs asset	$ 226,000	$ 231,500
Gain (Loss) on fair value changes of MSRs due to changes in valuation assumptions and derivatives used to economically hedge MSRs	(24)	47	$ 15
Loan servicing and ancillary fees	$ 734	$ 746	$ 746

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Loans and Allowance for Credit Losses - Summary of Loans Modified as TDRs in the Past Twelve Months that have Subsequently Defaulted (Detail) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($) SecurityLoan	Dec. 31, 2018 USD ($) SecurityLoan	Dec. 31, 2017 USD ($) SecurityLoan
Financing Receivable, Modifications [Line Items]
Number of Loans	10,863	10,860	11,294
Amount Defaulted | $	$ 266	$ 331	$ 321
Commercial [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans	1,040	836	724
Amount Defaulted | $	$ 46	$ 71	$ 53
Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans	36	39	36
Amount Defaulted | $	$ 24	$ 15	$ 9
Residential Mortgages [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans	137	191	374
Amount Defaulted | $	$ 15	$ 18	$ 41
Other Retail [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans	380	334	415
Amount Defaulted | $	$ 10	$ 5	$ 5
Credit Card [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans	8,273	8,012	8,372
Amount Defaulted | $	$ 40	$ 35	$ 36
Covered Loans [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans		1	4
Total Loans, Excluding Loans Purchased from GNMA Mortgage Pools [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans	9,866	9,413	9,925
Amount Defaulted | $	$ 135	$ 144	$ 144
Government National Mortgage Association [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans	997	1,447	1,369
Amount Defaulted | $	$ 131	$ 187	$ 177

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U.S. Bancorp (Parent Company) - Condensed Income Statement of Parent Company Only (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income
Other income	$ 926	$ 910	$ 774
Expense
Interest expense	4,442	3,254	1,966
Other expense	1,618	1,709	2,529
Income before income taxes and equity in undistributed income of subsidiaries	8,594	8,678	7,517
Applicable income taxes	1,648	1,554	1,264
Net income attributable to U.S. Bancorp	6,914	7,096	6,218
Parent Company [Member]
Income
Interest from subsidiaries	317	220	159
Other income	25	33	41
Total net revenue	7,448	5,559	5,005
Expense
Interest expense	551	471	402
Other expense	140	133	124
Total expense	691	604	526
Income before income taxes and equity in undistributed income of subsidiaries	6,757	4,955	4,479
Applicable income taxes	(92)	(91)	(176)
Income of parent company	6,849	5,046	4,655
Equity in undistributed income of subsidiaries	65	2,050	1,563
Net income attributable to U.S. Bancorp	6,914	7,096	6,218
Bank Subsidiaries [Member] | Parent Company [Member]
Income
Dividends from subsidiaries	7,100	5,300	4,800
Nonbank Subsidiaries [Member] | Parent Company [Member]
Income
Dividends from subsidiaries	$ 6	$ 6	$ 5

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Loans and Allowance for Credit Losses - Summary of Impaired Loans, which Include Nonaccrual and TDR Loans, by Portfolio Class (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Financing Receivable, Impaired [Line Items]
Period-end Recorded Investment	$ 4,443	$ 4,674
Unpaid Principal Balance	5,780	5,698
Valuation Allowance	249	254
Commitments to Lend Additional Funds	160	113
Commercial [Member]
Financing Receivable, Impaired [Line Items]
Period-end Recorded Investment	483	467
Unpaid Principal Balance	1,048	1,006
Valuation Allowance	39	32
Commitments to Lend Additional Funds	158	106
Commercial Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Period-end Recorded Investment	242	279
Unpaid Principal Balance	603	511
Valuation Allowance	7	12
Commitments to Lend Additional Funds		2
Residential Mortgages [Member]
Financing Receivable, Impaired [Line Items]
Period-end Recorded Investment	1,515	1,709
Unpaid Principal Balance	1,827	1,879
Valuation Allowance	71	86
Other Retail [Member]
Financing Receivable, Impaired [Line Items]
Period-end Recorded Investment	318	335
Unpaid Principal Balance	417	418
Valuation Allowance	12	14
Commitments to Lend Additional Funds	2	5
Credit Card [Member]
Financing Receivable, Impaired [Line Items]
Period-end Recorded Investment	263	245
Unpaid Principal Balance	263	245
Valuation Allowance	81	69
Total Loans, Excluding Loans Purchased from GNMA Mortgage Pools [Member]
Financing Receivable, Impaired [Line Items]
Period-end Recorded Investment	2,821	3,035
Unpaid Principal Balance	4,158	4,059
Valuation Allowance	210	213
Commitments to Lend Additional Funds	160	113
Government National Mortgage Association [Member]
Financing Receivable, Impaired [Line Items]
Period-end Recorded Investment	1,622	1,639
Unpaid Principal Balance	1,622	1,639
Valuation Allowance	$ 39	$ 41

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Leases - Schedule of Contractual Future Lease Obligations (Detail) $ in Millions	Dec. 31, 2019 USD ($)
Contractual Obligation, Fiscal Year Maturity Schedule [Abstract]
Operating leases, 2020	$ 296
Operating leases, 2021	267
Operating leases, 2022	226
Operating leases, 2023	180
Operating leases, 2024	132
Operating leases, Thereafter	391
Operating leases	1,492
Operating leases, amounts representing interest	(150)
Operating leases, lease liabilities	1,342
Finance leases, 2020	17
Finance leases, 2021	15
Finance leases, 2022	13
Finance leases, 2023	12
Finance leases, 2024	10
Finance leases, thereafter	38
Finance leases	105
Finance leases, Amounts representing interest	(31)
Finance leases, lease liabilities	$ 74

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Fair Values of Assets and Liabilities - Changes in Fair Value for All Assets and Liabilities Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3) (Parenthetical) (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Other Noninterest Income [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Net gains and (losses) on net derivative assets and liabilities included in net income	$ 287	$ (139)	$ 21
Net Change in net derivative asset and liability unrealized gains (losses) relating to assets still held at end of period	747	14	(77)
Mortgage Banking Revenue [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Net gains and (losses) on net derivative assets and liabilities included in net income	482	160	296
Net Change in net derivative asset and liability unrealized gains (losses) relating to assets still held at end of period	$ 35	$ 20	$ 25

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Consolidated Statement of Shareholders' Equity - USD ($) shares in Millions, $ in Millions		Total	Common Stock [Member]	Preferred Stock [Member]	Capital Surplus [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total U.S. Bancorp Shareholders' Equity [Member]	Noncontrolling Interests [Member]
Beginning Balance at Dec. 31, 2016		$ 47,933	$ 21	$ 5,501	$ 8,440	$ 50,151	$ (15,280)	$ (1,535)	$ 47,298	$ 635
Shares, Beginning Balance at Dec. 31, 2016			1,697
Net income (loss)		6,253				6,218			6,218	35
Other comprehensive income (loss)		131						131	131
Preferred stock dividends	[1]	(267)				(267)			(267)
Common stock dividends		(1,950)				(1,950)			(1,950)
Issuance of preferred stock		993		993					993
Redemption of preferred stock		(1,085)		(1,075)		(10)			(1,085)
Issuance of common and treasury stock		162			(138)		300		162
Issuance of common and treasury stock, shares			8
Purchase of treasury stock		$ (2,622)					(2,622)		(2,622)
Purchase of treasury stock, shares		(49)	(49)
Distributions to noncontrolling interests		$ (47)								(47)
Net other changes in noncontrolling interests		3								3
Stock option and restricted stock grants		162			162				162
Ending Balance at Dec. 31, 2017		49,666	$ 21	5,419	8,464	54,142	(17,602)	(1,404)	49,040	626
Shares, Ending Balance at Dec. 31, 2017			1,656
Change in accounting principle at Dec. 31, 2017	[2]	(1)				299		(300)	(1)
Net income (loss)		7,124				7,096			7,096	28
Other comprehensive income (loss)		(618)						(618)	(618)
Preferred stock dividends	[3]	(282)				(282)			(282)
Common stock dividends		(2,190)				(2,190)			(2,190)
Issuance of preferred stock		565		565					565
Issuance of common and treasury stock		91			(167)		258		91
Issuance of common and treasury stock, shares			6
Purchase of treasury stock		$ (2,844)					(2,844)		(2,844)
Purchase of treasury stock, shares		(54)	(54)
Distributions to noncontrolling interests		$ (31)								(31)
Net other changes in noncontrolling interests		5								5
Stock option and restricted stock grants		172			172				172
Ending Balance at Dec. 31, 2018		$ 51,657	$ 21	5,984	8,469	59,065	(20,188)	(2,322)	51,029	628
Shares, Ending Balance at Dec. 31, 2018		1,600	1,608
Change in accounting principle at Dec. 31, 2018		$ 2				2			2
Net income (loss)		6,946				6,914			6,914	32
Other comprehensive income (loss)		949						949	949
Preferred stock dividends	[4]	(302)				(302)			(302)
Common stock dividends		(2,493)				(2,493)			(2,493)
Issuance of common and treasury stock		89			(174)		263		89
Issuance of common and treasury stock, shares			7
Purchase of treasury stock		$ (4,515)					(4,515)		(4,515)
Purchase of treasury stock, shares		(81)	(81)
Distributions to noncontrolling interests		$ (31)								(31)
Net other changes in noncontrolling interests		1								1
Stock option and restricted stock grants		180			180				180
Ending Balance at Dec. 31, 2019		$ 52,483	$ 21	$ 5,984	$ 8,475	$ 63,186	$ (24,440)	$ (1,373)	$ 51,853	$ 630
Shares, Ending Balance at Dec. 31, 2019		1,500	1,534

[1] Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series G, Series H, Series I and Series J Non-Cumulative Perpetual Preferred Stock of $3,548.61, $887.15, $1,625.00, $375.00, $1,287.52, $1,281.25 and $890.69, respectively.

[2] Reflects the adoption of new accounting guidance on January 1, 2018 to reclassify the impact of the reduced federal statutory tax rate for corporations included in 2017 tax reform legislation from accumulated other comprehensive income to retained earnings.

[3] Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series H, Series I, Series J and Series K Non-Cumulative Perpetual Preferred Stock of $3,548.61, $887.15, $1,625.00, $1,287.52, $1,281.25, $1,325.00 and $576.74, respectively.

[4] Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series H, Series I, Series J and Series K Non-Cumulative Perpetual Preferred Stock of $3,654.95, $887.15, $1,625.00, $1,287.52, $1,281.25, $1,325.00 and $1,375.00, respectively.

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Consolidated Balance Sheet - USD ($) $ in Millions		Dec. 31, 2019		Dec. 31, 2018
Assets
Cash and due from banks		$ 22,405		$ 21,453
Investment securities
Held-to-maturity (2018 fair value $44,964)				46,050
Available-for-sale ($269 and $2,057 pledged as collateral, respectively)	[1]	122,613	[2]	66,115
Loans held for sale (including $5,533 and $2,035 of mortgage loans carried at fair value, respectively)		5,578		2,056
Loans
Total loans		296,102		286,810
Less allowance for loan losses		(4,020)		(3,973)
Net loans		292,082		282,837
Premises and equipment		3,702		2,457
Goodwill		9,655		9,369
Other intangible assets		3,223		3,392
Other assets (including $951 and $843 of trading securities at fair value pledged as collateral, respectively)		36,168		33,645
Total assets		495,426		467,374
Deposits
Noninterest-bearing		75,590		81,811
Interest-bearing	[3]	286,326		263,664
Total deposits		361,916		345,475
Short-term borrowings		23,723		14,139
Long-term debt		40,167		41,340
Other liabilities		17,137		14,763
Total liabilities		442,943		415,717
Shareholders' equity
Preferred stock		5,984		5,984
Common stock, par value $0.01 a share — authorized: 4,000,000,000 shares; issued: 2019 and 2018 — 2,125,725,742 shares		21		21
Capital surplus		8,475		8,469
Retained earnings		63,186		59,065
Less cost of common stock in treasury: 2019 — 591,570,506 shares; 2018 — 517,391,021 shares		(24,440)		(20,188)
Accumulated other comprehensive income (loss)		(1,373)		(2,322)
Total U.S. Bancorp shareholders' equity		51,853		51,029
Noncontrolling interests		630		628
Total equity		52,483		51,657
Total liabilities and equity		495,426		467,374
Commercial
Loans
Total loans		103,863		102,444
Commercial real estate
Loans
Total loans		39,746		39,539
Residential mortgages
Loans
Total loans		70,586		65,034
Credit card
Loans
Total loans		24,789		23,363
Other retail
Loans
Total loans		$ 57,118		$ 56,430

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

[2] The weighted-average maturity of total available-for-sale and held-to-maturity investment securities was 5.3 years at December 31, 2018, with a corresponding weighted-average yield of 2.53 percent.

[3] lncludes time deposits greater than $250,000 balances of $7.8 billion and $15.3 billion at December 31, 2019 and 2018, respectively.

XML

Investment Securities - Available-for-Sale and Held-to-Maturity (Detail) - USD ($) $ in Millions		Dec. 31, 2019		Dec. 31, 2018
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity securities, Amortized Cost				$ 46,050
Held-to-maturity securities, Unrealized Gains				51
Held-to-maturity securities, Unrealized Losses Other				(1,137)
Held-to-maturity securities, Fair Value				44,964
Available-for-sale Securities, Amortized Cost		$ 122,117	[1]	67,381
Available-for-sale securities, Unrealized Gains		944		174
Available-for-sale securities, Unrealized Losses Other		(448)		(1,440)
Available-for-sale securities, Fair Value	[2]	122,613	[1]	66,115
U.S. Treasury and Agencies [Member]
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity securities, Amortized Cost				5,102
Held-to-maturity securities, Unrealized Gains				2
Held-to-maturity securities, Unrealized Losses Other				(143)
Held-to-maturity securities, Fair Value				4,961
Available-for-sale Securities, Amortized Cost		19,845		19,604
Available-for-sale securities, Unrealized Gains		61		11
Available-for-sale securities, Unrealized Losses Other		(67)		(358)
Available-for-sale securities, Fair Value		19,839		19,257
Residential Mortgage-Backed Securities [Member] | Agency [Member]
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity securities, Amortized Cost				40,920
Held-to-maturity securities, Unrealized Gains				45
Held-to-maturity securities, Unrealized Losses Other				(994)
Held-to-maturity securities, Fair Value				39,971
Available-for-sale Securities, Amortized Cost		93,903		40,542
Available-for-sale securities, Unrealized Gains		557		120
Available-for-sale securities, Unrealized Losses Other		(349)		(910)
Available-for-sale securities, Fair Value		94,111		39,752
Commercial Agency [Member] | Agency [Member]
Schedule of Held-to-maturity Securities [Line Items]
Available-for-sale Securities, Amortized Cost		1,482		2
Available-for-sale securities, Unrealized Losses Other		(29)
Available-for-sale securities, Fair Value		1,453		2
Asset-Backed Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Available-for-sale Securities, Amortized Cost	[3]	375
Available-for-sale securities, Fair Value	[3]	383
Asset-Backed Securities [Member] | Collateralized Loan Obligations [Member]
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity securities, Unrealized Gains				1
Held-to-maturity securities, Fair Value				1
Available-for-sale securities, Unrealized Gains		1
Available-for-sale securities, Fair Value		1
Asset-Backed Securities [Member] | Other Asset-Backed Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity securities, Amortized Cost				5
Held-to-maturity securities, Unrealized Gains				2
Held-to-maturity securities, Fair Value				7
Available-for-sale Securities, Amortized Cost		375		397
Available-for-sale securities, Unrealized Gains		7		6
Available-for-sale securities, Fair Value		382		403
Obligations of State and Political Subdivisions [Member]
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity securities, Amortized Cost				6
Held-to-maturity securities, Unrealized Gains				1
Held-to-maturity securities, Fair Value				7
Available-for-sale Securities, Amortized Cost		6,499	[4],[5]	6,836
Available-for-sale securities, Unrealized Gains		318		37
Available-for-sale securities, Unrealized Losses Other		(3)		(172)
Available-for-sale securities, Fair Value		6,814	[4],[5]	6,701
Obligations of Foreign Governments [Member]
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity securities, Amortized Cost				9
Held-to-maturity securities, Fair Value				9
Available-for-sale Securities, Amortized Cost		9
Available-for-sale securities, Fair Value		9
Other [Member]
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity securities, Amortized Cost				8
Held-to-maturity securities, Fair Value				$ 8
Corporate Debt Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Available-for-sale Securities, Amortized Cost		4
Available-for-sale securities, Fair Value		$ 4

[1] The weighted-average maturity of total available-for-sale and held-to-maturity investment securities was 5.3 years at December 31, 2018, with a corresponding weighted-average yield of 2.53 percent.

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

[3] Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities that take into account anticipated future prepayments.

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

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

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Derivative Instruments (Tables)

12 Months Ended

Dec. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Asset and Liability Management Derivative Positions of Company

The following table summarizes the asset and liability management derivative positions of the Company:

	Asset Derivatives						Liability Derivatives
(Dollars in Millions)	Notional Value		Fair Value		Weighted-Average Remaining Maturity In Years		Notional Value		Fair Value		Weighted-Average Remaining Maturity In Years
December 31, 2019
Fair value hedges
Interest rate contracts
Receive fixed/pay floating swaps	$	18,300	$	–		3.89	$	4,900	$	–		3.49
Cash flow hedges
Interest rate contracts
Pay fixed/receive floating swaps		1,532		–		6.06		7,150		10		2.11
Net investment hedges
Foreign exchange forward contracts		–		–		–		287		3		.04
Other economic hedges
Interest rate contracts
Futures and forwards
Buy		5,409		17		.08		5,477		11		.07
Sell		16,333		13		.81		8,113		25		.03
Options
Purchased		10,180		79		2.97		–		–		–
Written		1,270		30		.08		4,238		81		2.07
Receive fixed/pay floating swaps		4,408		–		5.99		5,316		–		13.04
Pay fixed/receive floating swaps		1,259		–		5.67		4,497		–		6.03
Foreign exchange forward contracts		113		1		.05		467		6		.04
Equity contracts		128		2		.45		20		–		1.06
Other(a)		34		–		.01		1,823		165		2.45
Total	$	58,966	$	142			$	42,288	$	301
December 31, 2018
Cash flow hedges
Interest rate contracts
Pay fixed/receive floating swaps	$	7,422	$	8		3.11	$	4,320	$	–		1.77
Net investment hedges
Foreign exchange forward contracts		209		5		.05		223		1		.05
Other economic hedges
Interest rate contracts
Futures and forwards
Buy		2,839		27		.07		1,140		5		.05
Sell		994		3		.06		13,968		30		.72
Options
Purchased		5,080		88		10.77		–		–		–
Written		584		16		.09		3		–		.09
Receive fixed/pay floating swaps		3,605		–		14.80		4,333		–		6.97
Pay fixed/receive floating swaps		4,333		–		6.97		1,132		–		7.64
Foreign exchange forward contracts		549		7		.03		75		1		.05
Equity contracts		19		1		.82		104		2		.45
Other(a)		1		–		.01		1,458		84		1.50
Total	$	25,635	$	155			$	26,756	$	123

(a) Includes derivative liability swap agreements related to the sale of a portion of the Company’s Class B common and preferred shares of Visa Inc. The Visa swap agreements had a total notional value, fair value and weighted-average remaining maturity of $1.8 billion, $165 million and 2.50 years at December 31, 2019, respectively, compared to $1.5 billion, $84 million and 1.50 years at December 31, 2018, respectively. In addition, includes short-term underwriting purchase and sale commitments with total asset and liability notional values of $34 million at December 31, 2019, and $1 million at December 31, 2018.

Customer-Related Derivative Positions of Company

The following table summarizes the customer-related derivative positions of the Company:

	Asset Derivatives						Liability Derivatives
(Dollars in Millions)	Notional Value		Fair Value		Weighted-Average Remaining Maturity In Years		Notional Value		Fair Value		Weighted-Average Remaining Maturity In Years
December 31, 2019
Interest rate contracts
Receive fixed/pay floating swaps	$	108,560	$	1,865		4.83	$	31,544	$	88		3.83
Pay fixed/receive floating swaps		28,150		30		3.83		101,078		753		4.55
Other(a)		6,895		1		3.45		6,218		2		2.98
Options
Purchased		46,406		43		2.06		12,804		47		1.25
Written		6,901		49		1.93		49,741		41		1.82
Futures
Buy		894		–		.21		–		–		–
Sell		3,874		1		1.18		1,995		–		1.04
Foreign exchange rate contracts
Forwards, spots and swaps		36,350		748		.97		36,671		729		1.07
Options
Purchased		1,354		17		.54		–		–		–
Written		–		–		–		1,354		17		.54
Credit contracts		2,879		1		3.28		7,488		5		4.33
Total	$	242,263	$	2,755			$	248,893	$	1,682
December 31, 2018
Interest rate contracts
Receive fixed/pay floating swaps	$	42,054	$	754		6.73	$	60,731	$	456		4.32
Pay fixed/receive floating swaps		60,970		288		3.90		40,499		420		6.57
Other(a)		5,777		2		3.77		6,496		2		2.72
Options
Purchased		41,711		51		1.54		1,940		30		1.98
Written		2,060		32		2.07		39,538		51		1.44
Futures
Buy		460		–		1.58		–		–		–
Sell		–		–		–		6,190		1		.59
Foreign exchange rate contracts
Forwards, spots and swaps		26,210		681		.91		25,571		663		.88
Options
Purchased		2,779		47		.75		–		–		–
Written		–		–		–		2,779		47		.75
Credit contracts		2,318		–		3.50		4,923		2		4.04
Total	$	184,339	$	1,855			$	188,667	$	1,672

(a) Primarily represents floating rate interest rate swaps that pay based on differentials between specified interest rate indexes.

Summary of Effective Portion of Gains (Losses) Recognized in Other Comprehensive Income (Loss) and Gains (Losses) Reclassified from Other Comprehensive Income (Loss) into Earnings

The table below shows the effective portion of the gains (losses) recognized in other comprehensive income (loss) and the gains (losses) reclassified from other comprehensive income (loss) into earnings (net-of-tax) for the years ended December 31:

	Gains (Losses) Recognized in Other Comprehensive Income (Loss)								Gains (Losses) Reclassified from Other Comprehensive Income (Loss) into Earnings
(Dollars in Millions)	2019			2018		2017			2019			2018		2017
Asset and Liability Management Positions
Cash flow hedges
Interest rate contracts	$	(171	)	$	29	$	(3	)	$	(8	)	$	3	$	(19	)
Net investment hedges
Foreign exchange forward contracts		3			39		(56	)		–			–		–
Non-derivative debt instruments		13			32		(46	)		–			–		–

Note: The Company does not exclude components from effectiveness testing for cash flow and net investment hedges.

Effect of Fair Value and Cash Flow Hedge Accounting Included in Interest Expense on Consolidated Statement of Income

The table below shows the effect of fair value and cash flow hedge accounting on the Consolidated Statement of Income for the years ended December 31:

	Other Noninterest Income							Interest Expense
(Dollars in Millions)	2019		2018		2017			2019			2018			2017
Total amount of income and expense line items presented in the Consolidated Statement of Income in which the effects of fair value or cash flow hedges are recorded	$	926	$	910	$	774		$	4,442		$	3,254		$	1,966
Asset and Liability Management Positions
Fair value hedges
Interest rate contract derivatives		–		–		(28	)		(44	)		5			–
Hedged items		–		–		28			44			(5	)		–
Cash Flow hedges
Interest rate contract derivatives		–		–		–			11			(5	)		30

Note: The Company does not exclude components from effectiveness testing for fair value and cash flow hedges. The Company did not reclassify gains or losses into earnings as a result of the discontinuance of cash flow hedges during the years ended December 31, 2019, 2018 and 2017.

Summary of Cumulative Hedging Adjustments and the Carrying Amount of Assets (Liabilities) Designated in Fair Value Hedges

The table below shows cumulative hedging adjustments and the carrying amount of assets (liabilities) designated in fair value hedges:

	Carrying Amount of the Hedged Assets (Liabilities)				Cumulative Hedging Adjustment(a)
At December 31 (Dollars in Millions)	2019		2018		2019		2018
Line Item in the Consolidated Balance Sheet
Long-term Debt	$	23,195	$	–	$	35	$	(27	)

(a) The cumulative hedging adjustment related to discontinued hedging relationships at December 31, 2019 and 2018 was $(7) million and $(27) million, respectively.

Summary of Gains (Losses) Recognized in Earnings for Other Economic Hedges and Customer-Related Positions

The table below shows the gains (losses) recognized in earnings for other economic hedges and the customer-related positions for the years ended December 31:

(Dollars in Millions)	Location of Gains (Losses) Recognized in Earnings		2019			2018			2017
Asset and Liability Management Positions
Other economic hedges
Interest rate contracts
Futures and forwards		Mortgage banking revenue	$	34		$	110		$	24
Purchased and written options		Mortgage banking revenue		432			188			237
Swaps		Mortgage banking revenue		316			(111	)		35
Foreign exchange forward contracts		Other noninterest income		(24	)		39			(69	)
Equity contracts		Compensation expense		–			(4	)		1
Other		Other noninterest income		(140	)		2			(1	)
Customer-Related Positions
Interest rate contracts
Swaps		Commercial products revenue		82			47			67
Purchased and written options		Commercial products revenue		10			2			(24	)
Futures		Commercial products revenue		(5	)		9			(3	)
Foreign exchange rate contracts
Forwards, spots and swaps		Commercial products revenue		82			84			92
Purchased and written options		Commercial products revenue		1			–			2
Credit contracts		Commercial products revenue		(18	)		2			3

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Fair Values of Assets and Liabilities - Valuation Assumption Ranges for Derivative Commitments (Detail) - Derivative Mortgage Loans Commitments [Member]	Dec. 31, 2019
Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expected loan close rate	12.00%
Inherent MSR value (basis points per loan)	56.00%
Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expected loan close rate	100.00%
Inherent MSR value (basis points per loan)	221.00%
Weighted Average [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expected loan close rate	78.00%
Inherent MSR value (basis points per loan)	130.00%

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Business Segments (Tables)

12 Months Ended

Dec. 31, 2019

Text Block [Abstract]

Business Segments Reporting Information Details

Business segment results for the years ended December 31 were as follows:

	Corporate and Commercial Banking						Consumer and Business Banking						Wealth Management and Investment Services
Year Ended December 31 (Dollars in Millions)	2019			2018			2019			2018			2019			2018
Condensed Income Statement
Net interest income (taxable-equivalent basis)	$	2,871		$	2,936		$	6,261		$	6,156		$	1,157		$	1,131
Noninterest income		867			843			2,387			2,316			1,799			1,748
Securities gains (losses), net		–			–			–			–			–			–
Total net revenue		3,738			3,779			8,648			8,472			2,956			2,879
Noninterest expense		1,607			1,591			5,285			5,232			1,752			1,778
Other intangibles		4			4			20			27			13			16
Total noninterest expense		1,611			1,595			5,305			5,259			1,765			1,794
Income before provision and income taxes		2,127			2,184			3,343			3,213			1,191			1,085
Provision for credit losses		78			65			310			232			(3	)		(2	)
Income before income taxes		2,049			2,119			3,033			2,981			1,194			1,087
Income taxes and taxable-equivalent adjustment		513			531			759			745			299			273
Net income		1,536			1,588			2,274			2,236			895			814
Net (income) loss attributable to noncontrolling interests		–			–			–			–			–			–
Net income attributable to U.S. Bancorp	$	1,536		$	1,588		$	2,274		$	2,236		$	895		$	814
Average Balance Sheet
Loans	$	96,608		$	93,854		$	144,595		$	140,875		$	10,080		$	9,364
Other earning assets		3,751			3,072			3,989			3,501			282			184
Goodwill		1,647			1,647			3,475			3,604			1,617			1,618
Other intangible assets		8			11			2,617			2,953			49			63
Assets		106,716			102,801			158,884			155,267			13,330			12,437
Noninterest-bearing deposits		29,152			32,938			27,876			27,691			13,195			14,006
Interest-bearing deposits		72,780			69,913			129,289			124,934			62,031			56,000
Total deposits		101,932			102,851			157,165			152,625			75,226			70,006
Total U.S. Bancorp shareholders’ equity		10,399			10,463			11,713			11,812			2,525			2,476
	Payment Services						Treasury and Corporate Support						Consolidated Company
Year Ended December 31 (Dollars in Millions)	2019			2018			2019			2018			2019			2018
Condensed Income Statement
Net interest income (taxable-equivalent basis)	$	2,493		$	2,443		$	373		$	369		$	13,155		$	13,035
Noninterest income		3,707	(a)		3,599	(a)		998			1,066			9,758	(b)		9,572	(b)
Securities gains (losses), net		–			–			73			30			73			30
Total net revenue		6,200			6,042			1,444			1,465			22,986			22,637
Noninterest expense		2,940			2,859			1,033			843			12,617			12,303
Other intangibles		131			114			–			–			168			161
Total noninterest expense		3,071			2,973			1,033			843			12,785			12,464
Income before provision and income taxes		3,129			3,069			411			622			10,201			10,173
Provision for credit losses		1,108			1,081			11			3			1,504			1,379
Income before income taxes		2,021			1,988			400			619			8,697			8,794
Income taxes and taxable-equivalent adjustment		505			497			(325	)		(376	)		1,751			1,670
Net income		1,516			1,491			725			995			6,946			7,124
Net (income) loss attributable to noncontrolling interests		–			–			(32	)		(28	)		(32	)		(28	)
Net income attributable to U.S. Bancorp	$	1,516		$	1,491		$	693		$	967		$	6,914		$	7,096
Average Balance Sheet
Loans	$	33,566		$	31,102		$	5,837		$	5,506		$	290,686		$	280,701
Other earning assets		348			291			131,481			127,318			139,851			134,366
Goodwill		2,839			2,570			–			–			9,578			9,439
Other intangible assets		538			406			–			–			3,212			3,433
Assets		39,743			36,912			156,980			149,597			475,653			457,014
Noninterest-bearing deposits		1,205			1,099			2,435			2,462			73,863			78,196
Interest-bearing deposits		115			110			8,734			4,309			272,949			255,266
Total deposits		1,320			1,209			11,169			6,771			346,812			333,462
Total U.S. Bancorp shareholders’ equity		7,084			6,629			20,902			18,383			52,623			49,763

(a) Presented net of related rewards and rebate costs and certain partner payments of $2.2 billion for 2019 and 2018.

(b) Includes revenue generated from certain contracts with customers of $7.3 billion and $7.4 billion for 2019 and 2018, respectively.

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Netting Arrangements for Certain Financial Instruments and Securities Financing Activities - Information on Company's Accounting Netting Adjustments and Items Not Offset in Consolidated Balance Sheet Liabilities But Available for Offset in Event of Default (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Offsetting [Abstract]
Derivative liabilities Gross recognized liabilities	$ 1,816	$ 1,710
Repurchase agreements Gross recognized liabilities	1,165	2,594
Securities loaned Gross recognized liabilities	50	227
Total Gross recognized liabilities	3,031	4,531
Derivative liabilities Gross amounts liabilities offset in consolidated balance sheet	(1,067)	(946)
Total Gross amounts liabilities offset in consolidated balance sheet	(1,067)	(946)
Derivative liabilities Net amounts liabilities presented in consolidated balance sheet	749	764
Repurchase agreements Net amounts liabilities presented in consolidated balance sheet	1,165	2,594
Securities loaned Net amounts liabilities presented in consolidated balance sheet	50	227
Total Net amounts liabilities presented in consolidated balance sheet	1,964	3,585
Derivative liabilities Gross financial instrument liability amounts not offset in consolidated balance sheet	(80)	(106)
Repurchase agreements Gross financial instrument liability amounts not offset in consolidated balance sheet	(152)	(114)
Total Gross financial instrument liability amounts not offset in consolidated balance sheet	(232)	(220)
Repurchase agreements Gross collateral pledged amounts not offset in consolidated balance sheet	(1,012)	(2,480)
Securities loaned Gross collateral pledged amounts not offset in consolidated balance sheet	(49)	(224)
Total Gross collateral pledged amounts not offset in consolidated balance sheet	(1,061)	(2,704)
Derivative liabilities Net Amount	669	658
Repurchase agreements Net Amount	1
Securities loaned Net Amount	1	3
Total Net Amount Liabilities	$ 671	$ 661

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Stock-Based Compensation - Stock Options Outstanding Additional Information (Detail)	12 Months Ended
	Dec. 31, 2019 $ / shares shares
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding Options, Shares | shares	5,718,256
Outstanding Options, Weighted-Average Remaining Contractual Life (Years)	4 years 4 months 24 days
Outstanding Options, Weighted-Average Exercise Price	$ 39.25
Exercisable Options, Shares | shares	4,869,805
Exercisable Options, Weighted-Average Exercise Price	$ 37.67
Exercise Price Range $23.36-$25.00 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range limit of Exercise Prices	23.36
Upper range limit of Exercise Prices	$ 25.00
Outstanding Options, Shares | shares	236,661
Outstanding Options, Weighted-Average Remaining Contractual Life (Years)	2 months 12 days
Outstanding Options, Weighted-Average Exercise Price	$ 23.82
Exercisable Options, Shares | shares	236,661
Exercisable Options, Weighted-Average Exercise Price	$ 23.82
Exercise Price Range $25.01-$30.00 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range limit of Exercise Prices	25.01
Upper range limit of Exercise Prices	$ 30.00
Outstanding Options, Shares | shares	1,277,726
Outstanding Options, Weighted-Average Remaining Contractual Life (Years)	1 year 9 months 18 days
Outstanding Options, Weighted-Average Exercise Price	$ 28.65
Exercisable Options, Shares | shares	1,277,726
Exercisable Options, Weighted-Average Exercise Price	$ 28.65
Exercise Price Range $30.01-$35.00 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range limit of Exercise Prices	30.01
Upper range limit of Exercise Prices	$ 35.00
Outstanding Options, Shares | shares	537,881
Outstanding Options, Weighted-Average Remaining Contractual Life (Years)	3 years 1 month 6 days
Outstanding Options, Weighted-Average Exercise Price	$ 33.98
Exercisable Options, Shares | shares	537,881
Exercisable Options, Weighted-Average Exercise Price	$ 33.98
Exercise Price Range $35.01-$40.00 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range limit of Exercise Prices	35.01
Upper range limit of Exercise Prices	$ 40.00
Outstanding Options, Shares | shares	1,251,397
Outstanding Options, Weighted-Average Remaining Contractual Life (Years)	6 years 1 month 6 days
Outstanding Options, Weighted-Average Exercise Price	$ 39.49
Exercisable Options, Shares | shares	885,968
Exercisable Options, Weighted-Average Exercise Price	$ 39.49
Exercise Price Range $40.01-$45.00 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range limit of Exercise Prices	40.01
Upper range limit of Exercise Prices	$ 45.00
Outstanding Options, Shares | shares	1,454,651
Outstanding Options, Weighted-Average Remaining Contractual Life (Years)	4 years 8 months 12 days
Outstanding Options, Weighted-Average Exercise Price	$ 42.42
Exercisable Options, Shares | shares	1,454,068
Exercisable Options, Weighted-Average Exercise Price	$ 42.43
Exercise Price Range $45.01-$50.00 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range limit of Exercise Prices	45.01
Upper range limit of Exercise Prices	50.00
Exercise Price Range $50.01-$55.01 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range limit of Exercise Prices	50.01
Upper range limit of Exercise Prices	$ 55.01
Outstanding Options, Shares | shares	959,940
Outstanding Options, Weighted-Average Remaining Contractual Life (Years)	7 years 1 month 6 days
Outstanding Options, Weighted-Average Exercise Price	$ 54.97
Exercisable Options, Shares | shares	477,501
Exercisable Options, Weighted-Average Exercise Price	$ 54.97

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Investment Securities (Tables)

12 Months Ended

Dec. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Investment Securities Available-for-Sale and Held-to-Maturity

	2019											2018
					Unrealized Losses											Unrealized Losses
(Dollars in Millions)	Amortized Cost		Unrealized Gains		Other-than- Temporary(a)		Other(b)			Fair Value		Amortized Cost		Unrealized Gains		Other-than- Temporary(a)		Other(b)			Fair Value
Held-to-maturity
U.S. Treasury and agencies	$	–	$	–	$	–	$	–		$	–	$	5,102	$	2	$	–	$	(143	)	$	4,961
Residential agency mortgage-backed securities		–		–		–		–			–		40,920		45		–		(994	)		39,971
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations		–		–		–		–			–		–		1		–		–			1
Other		–		–		–		–			–		5		2		–		–			7
Obligations of state and political subdivisions		–		–		–		–			–		6		1		–		–			7
Obligations of foreign governments		–		–		–		–			–		9		–		–		–			9
Other		–		–		–		–			–		8		–		–		–			8
Total held-to-maturity	$	–	$	–	$	–	$	–		$	–	$	46,050	$	51	$	–	$	(1,137	)	$	44,964
Available-for-sale
U.S. Treasury and agencies	$	19,845	$	61	$	–	$	(67	)	$	19,839	$	19,604	$	11	$	–	$	(358	)	$	19,257
Mortgage-backed securities
Residential agency		93,903		557		–		(349	)		94,111		40,542		120		–		(910	)		39,752
Commercial agency		1,482		–		–		(29	)		1,453		2		–		–		–			2
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations		–		1		–		–			1		–		–		–		–			–
Other		375		7		–		–			382		397		6		–		–			403
Obligations of state and political subdivisions		6,499		318		–		(3	)		6,814		6,836		37		–		(172	)		6,701
Obligations of foreign governments		9		–		–		–			9		–		–		–		–			–
Corporate debt securities		4		–		–		–			4		–		–		–		–			–
Total available-for-sale	$	122,117	$	944	$	–	$	(448	)	$	122,613	$	67,381	$	174	$	–	$	(1,440	)	$	66,115

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

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

Amount of Interest Income from Taxable and Non-Taxable Investment Securities

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

Year Ended December 31 (Dollars in Millions)	2019		2018		2017
Taxable	$	2,680	$	2,396	$	2,043
Non-taxable		213		220		189
Total interest income from investment securities	$	2,893	$	2,616	$	2,232

Amount of Gross Gains and Losses Realized through Sales of Available-for-Sale Investment Securities

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

Year Ended December 31 (Dollars in Millions)	2019			2018		2017
Realized gains	$	99		$	30	$	75
Realized losses		(26	)		–		(18	)
Net realized gains (losses)	$	73		$	30	$	57
Income tax (benefit) on net realized gains (losses)	$	18		$	7	$	22

Gross Unrealized Losses and Fair Value of Company's Investment Securities

The following table shows the gross unrealized losses and fair value of the Company’s available-for-sale investment securities with unrealized losses, aggregated by investment category and length of time the individual investment securities have been in continuous unrealized loss positions, at December 31, 2019:

	Less Than 12 Months					12 Months or Greater					Total
(Dollars in Millions)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury and agencies	$	3,869	$	(40	)	$	6,265	$	(27	)	$	10,134	$	(67	)
Residential agency mortgage-backed securities		16,292		(46	)		24,346		(303	)		40,638		(349	)
Commercial agency mortgage-backed securities		1,453		(29	)		–		–			1,453		(29	)
Other asset-backed securities		–		–			2		–			2		–
Obligations of state and political subdivisions		365		(3	)		–		–			365		(3	)
Corporate debt securities		4		–			–		–			4		–
Total investment securities	$	21,983	$	(118	)	$	30,613	$	(330	)	$	52,596	$	(448	)

Amortized cost, fair value and yield by maturity date of held-to-maturity and available-for-sale investment securities

The following table provides information about the amortized cost, fair value and yield by maturity date of the available-for-sale investment securities outstanding at December 31, 2019:

(Dollars in Millions)	Amortized Cost		Fair Value		Weighted- Average Maturity in Years		Weighted- Average Yield(e)
U.S. Treasury and Agencies
Maturing in one year or less	$	4,243	$	4,242		.6		1.61	%
Maturing after one year through five years		12,881		12,901		2.4		1.65
Maturing after five years through ten years		2,721		2,696		7.5		1.95
Maturing after ten years		–		–		–		–
Total	$	19,845	$	19,839		2.7		1.68	%
Mortgage-Backed Securities(a)
Maturing in one year or less	$	197	$	197		.7		2.28	%
Maturing after one year through five years		66,940		67,102		3.6		2.30
Maturing after five years through ten years		27,339		27,349		6.0		2.58
Maturing after ten years		909		916		11.4		2.76
Total	$	95,385	$	95,564		4.4		2.39	%
Asset-Backed Securities(a)
Maturing in one year or less	$	–	$	–		–		—	%
Maturing after one year through five years		374		381		3.1		3.09
Maturing after five years through ten years		1		1		6.1		2.56
Maturing after ten years		–		1		15.3		2.41
Total	$	375	$	383		3.1		3.09	%
Obligations of State and Political Subdivisions(b)(c)
Maturing in one year or less	$	66	$	66		.1		5.81	%
Maturing after one year through five years		695		722		3.0		4.50
Maturing after five years through ten years		5,720		6,004		7.1		4.24
Maturing after ten years		18		22		14.0		6.15
Total	$	6,499	$	6,814		6.6		4.29	%
Other
Maturing in one year or less	$	13	$	13		.3		2.66	%
Maturing after one year through five years		–		–		–		–
Maturing after five years through ten years		–		–		–		–
Maturing after ten years		–		–		–		–
Total	$	13	$	13		.3		2.66	%
Total investment securities(d)	$	122,117	$	122,613		4.2		2.38	%

(a) Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities that take into account anticipated future prepayments.

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

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

(d) The weighted-average maturity of total available-for-sale and held-to-maturity investment securities was 5.3 years at December 31, 2018, with a corresponding weighted-average yield of 2.52 percent.

(e) Weighted-average yields for obligations of state and political subdivisions are presented on a fully-taxable equivalent basis based on a federal income tax rate of 21 percent. Yields on investment securities are computed based on amortized cost balances, excluding any premiums or discounts recorded related to the transfer of investment securities at fair value from available-for-sale to held-to-maturity.

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Income Taxes - Reconciliation of Expected Income Tax Expense at Federal Statutory Rate of 21 Percent and 35 Percent to Company's Applicable Income Tax Expense (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Effective Income Tax Rate Reconciliation, Amount [Abstract]
Tax at statutory rate	$ 1,805	$ 1,822	$ 2,631
State income tax, at statutory rates, net of federal tax benefit	355	352	281
Revaluation of tax related assets and liabilities			(910)
Tax credits and benefits, net of related expenses	(424)	(513)	(774)
Tax-exempt income	(120)	(130)	(200)
Nondeductible legal and regulatory expenses	23	52	213
Other items	9	(29)	23
Applicable income taxes	$ 1,648	$ 1,554	$ 1,264

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Business Segments

12 Months Ended

Dec. 31, 2019

Text Block [Abstract]

Business Segments

  NOTE 23   Business Segments  

Within the Company, financial performance is measured by major lines of business based on the products and services provided to customers through its distribution channels. These operating segments are components of the Company about which financial information is prepared and is evaluated regularly by management in deciding how to allocate resources and assess performance. The Company has five reportable operating segments:

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

Consumer and Business Banking Consumer and Business Banking delivers products and services through banking offices, telephone servicing and sales, on-line services, direct mail, ATM processing and mobile devices. It encompasses community banking, metropolitan banking and indirect lending, as well as mortgage banking.

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

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

Treasury and Corporate Support Treasury and Corporate Support includes the Company’s investment portfolios, funding, capital management, interest rate risk management, income taxes not allocated to business segments, including most investments in tax-advantaged projects, and the residual aggregate of those expenses associated with corporate activities that are managed on a consolidated basis.

Basis of Presentation Business segment results are derived from the Company’s business unit profitability reporting systems by specifically attributing managed balance sheet assets, deposits and other liabilities and their related income or expense. The allowance for credit losses and related provision expense are allocated to the business segments based on the related loan balances managed. Goodwill and other intangible assets are assigned to the business segments based on the mix of business of an entity acquired by the Company. Within the Company, capital levels are evaluated and managed centrally; however,

capital is allocated to the business segments to support evaluation of business performance. Business segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements. Generally, the determination of the amount of capital allocated to each business segment includes credit and operational capital allocations following a Basel III regulatory framework. Interest income and expense is determined based on the assets and liabilities managed by the business segment. Because funding and asset liability management is a central function, funds transfer-pricing methodologies are utilized to allocate a cost of funds used or credit for funds provided to all business segment assets and liabilities, respectively, using a matched funding concept. Also, each business unit is allocated the taxable-equivalent benefit of tax-exempt products. The residual effect on net interest income of asset/liability management activities is included in Treasury and Corporate Support. Noninterest income and expenses directly managed by each business segment, including fees, service charges, salaries and benefits, and other direct revenues and costs are accounted for within each segment’s financial results in a manner similar to the consolidated financial statements. Occupancy costs are allocated based on utilization of facilities by the business segments. Generally, operating losses are charged to the business segment when the loss event is realized in a manner similar to a loan charge-off. Noninterest expenses incurred by centrally managed operations or business segments that directly support another business segment’s operations are charged to the applicable business segment based on its utilization of those services, primarily measured by the volume of customer activities, number of employees or other relevant factors. These allocated expenses are reported as net shared services expense within noninterest expense. Certain activities that do not directly support the operations of the business segments or for which the business segments are not considered financially accountable in evaluating their performance are not charged to the business segments. The income or expenses associated with these corporate activities is reported within the Treasury and Corporate Support business segment. Income taxes are assessed to each business segment at a standard tax rate with the residual tax expense or benefit to arrive at the consolidated effective tax rate included in Treasury and Corporate Support.

Designations, assignments and allocations change from time to time as management systems are enhanced, methods of evaluating performance or product lines change or business segments are realigned to better respond to the Company’s diverse customer base. During 2019, certain organization and methodology changes were made and, accordingly, 2018 results were restated and presented on a comparable basis.

Business segment results for the years ended December 31 were as follows:

	Corporate and Commercial Banking						Consumer and Business Banking						Wealth Management and Investment Services
Year Ended December 31 (Dollars in Millions)	2019			2018			2019			2018			2019			2018
Condensed Income Statement
Net interest income (taxable-equivalent basis)	$	2,871		$	2,936		$	6,261		$	6,156		$	1,157		$	1,131
Noninterest income		867			843			2,387			2,316			1,799			1,748
Securities gains (losses), net		–			–			–			–			–			–
Total net revenue		3,738			3,779			8,648			8,472			2,956			2,879
Noninterest expense		1,607			1,591			5,285			5,232			1,752			1,778
Other intangibles		4			4			20			27			13			16
Total noninterest expense		1,611			1,595			5,305			5,259			1,765			1,794
Income before provision and income taxes		2,127			2,184			3,343			3,213			1,191			1,085
Provision for credit losses		78			65			310			232			(3	)		(2	)
Income before income taxes		2,049			2,119			3,033			2,981			1,194			1,087
Income taxes and taxable-equivalent adjustment		513			531			759			745			299			273
Net income		1,536			1,588			2,274			2,236			895			814
Net (income) loss attributable to noncontrolling interests		–			–			–			–			–			–
Net income attributable to U.S. Bancorp	$	1,536		$	1,588		$	2,274		$	2,236		$	895		$	814
Average Balance Sheet
Loans	$	96,608		$	93,854		$	144,595		$	140,875		$	10,080		$	9,364
Other earning assets		3,751			3,072			3,989			3,501			282			184
Goodwill		1,647			1,647			3,475			3,604			1,617			1,618
Other intangible assets		8			11			2,617			2,953			49			63
Assets		106,716			102,801			158,884			155,267			13,330			12,437
Noninterest-bearing deposits		29,152			32,938			27,876			27,691			13,195			14,006
Interest-bearing deposits		72,780			69,913			129,289			124,934			62,031			56,000
Total deposits		101,932			102,851			157,165			152,625			75,226			70,006
Total U.S. Bancorp shareholders’ equity		10,399			10,463			11,713			11,812			2,525			2,476
	Payment Services						Treasury and Corporate Support						Consolidated Company
Year Ended December 31 (Dollars in Millions)	2019			2018			2019			2018			2019			2018
Condensed Income Statement
Net interest income (taxable-equivalent basis)	$	2,493		$	2,443		$	373		$	369		$	13,155		$	13,035
Noninterest income		3,707	(a)		3,599	(a)		998			1,066			9,758	(b)		9,572	(b)
Securities gains (losses), net		–			–			73			30			73			30
Total net revenue		6,200			6,042			1,444			1,465			22,986			22,637
Noninterest expense		2,940			2,859			1,033			843			12,617			12,303
Other intangibles		131			114			–			–			168			161
Total noninterest expense		3,071			2,973			1,033			843			12,785			12,464
Income before provision and income taxes		3,129			3,069			411			622			10,201			10,173
Provision for credit losses		1,108			1,081			11			3			1,504			1,379
Income before income taxes		2,021			1,988			400			619			8,697			8,794
Income taxes and taxable-equivalent adjustment		505			497			(325	)		(376	)		1,751			1,670
Net income		1,516			1,491			725			995			6,946			7,124
Net (income) loss attributable to noncontrolling interests		–			–			(32	)		(28	)		(32	)		(28	)
Net income attributable to U.S. Bancorp	$	1,516		$	1,491		$	693		$	967		$	6,914		$	7,096
Average Balance Sheet
Loans	$	33,566		$	31,102		$	5,837		$	5,506		$	290,686		$	280,701
Other earning assets		348			291			131,481			127,318			139,851			134,366
Goodwill		2,839			2,570			–			–			9,578			9,439
Other intangible assets		538			406			–			–			3,212			3,433
Assets		39,743			36,912			156,980			149,597			475,653			457,014
Noninterest-bearing deposits		1,205			1,099			2,435			2,462			73,863			78,196
Interest-bearing deposits		115			110			8,734			4,309			272,949			255,266
Total deposits		1,320			1,209			11,169			6,771			346,812			333,462
Total U.S. Bancorp shareholders’ equity		7,084			6,629			20,902			18,383			52,623			49,763

(a) Presented net of related rewards and rebate costs and certain partner payments of $2.2 billion for 2019 and 2018.

(b) Includes revenue generated from certain contracts with customers of $7.3 billion and $7.4 billion for 2019 and 2018, respectively.

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Premises and Equipment (Tables)

12 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

Premises and Equipment

Premises and equipment at December 31 consisted of the following:

(Dollars in Millions)	2019			2018
Land	$	504		$	515
Buildings and improvements		3,513			3,481
Furniture, fixtures and equipment		3,366			3,110
Right of use assets on operating leases		1,141			–
Right of use assets on finance leases		111			121
Construction in progress		21			20
		8,656			7,247
Less accumulated depreciation and amortization		(4,954	)		(4,790	)
Total	$	3,702		$	2,457

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Derivative Instruments - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Derivative [Line Items]
Realized and unrealized gains (losses) on derivatives classified as cash flow hedges recorded in other comprehensive income (loss)		$ (51)	$ 112
Fair value of derivatives under collateral agreements in a net liability position		717
Collateral posted by company netted against net liability position		514
Net Investment Hedging [Member]
Derivative [Line Items]
Non-derivative debt instruments designated as net investment hedges		$ 1,300	$ 1,100
Scenario, Forecast [Member]
Derivative [Line Items]
Estimated gain to be reclassified from other comprehensive income (loss) into earnings	$ 32

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Employee Benefits - Components of Net Periodic Benefit Cost and Other Amounts Recognized in Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Pension Plans [Member]
Components Of Net Periodic Benefit Cost
Service cost	$ 192	$ 208	$ 187
Interest cost	249	224	220
Expected return on plan assets	(383)	(379)	(284)
Prior service cost (credit) and transition obligation (asset) amortization			(2)
Actuarial loss (gain) amortization	98	146	127
Net periodic benefit cost	156	199	248
Net actuarial gain (loss) arising during the year	(388)	(305)	(48)
Net actuarial loss (gain) amortized during the year	98	146	127
Net prior service cost (credit) and transition obligation (asset) amortized during the year			(2)
Total recognized in other comprehensive income (loss)	(290)	(159)	77
Total recognized in net periodic benefit cost and other comprehensive income (loss)	(446)	(358)	(171)
Postretirement Welfare Plan [Member]
Components Of Net Periodic Benefit Cost
Interest cost	2	2	2
Expected return on plan assets	(3)	(3)	(3)
Prior service cost (credit) and transition obligation (asset) amortization	(3)	(3)	(3)
Actuarial loss (gain) amortization	(6)	(6)	(5)
Net periodic benefit cost	(10)	(10)	(9)
Net actuarial gain (loss) arising during the year	7	3	7
Net actuarial loss (gain) amortized during the year	(6)	(6)	(5)
Net prior service cost (credit) and transition obligation (asset) amortized during the year	(3)	(3)	(3)
Total recognized in other comprehensive income (loss)	(2)	(6)	(1)
Total recognized in net periodic benefit cost and other comprehensive income (loss)	$ 8	$ 4	$ 8

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Investment Securities

12 Months Ended

Dec. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Investment Securities

  NOTE 4     Investment Securities    

The Company’s held-to-maturity investment securities are carried at historical cost, adjusted for amortization of premiums and accretion of discounts and credit-related other-than-temporary impairment. The Company’s available-for-sale investment securities are carried at fair value with unrealized net gains or losses reported within accumulated other comprehensive income (loss) in shareholders’ equity.

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

	2019											2018
					Unrealized Losses											Unrealized Losses
(Dollars in Millions)	Amortized Cost		Unrealized Gains		Other-than- Temporary(a)		Other(b)			Fair Value		Amortized Cost		Unrealized Gains		Other-than- Temporary(a)		Other(b)			Fair Value
Held-to-maturity
U.S. Treasury and agencies	$	–	$	–	$	–	$	–		$	–	$	5,102	$	2	$	–	$	(143	)	$	4,961
Residential agency mortgage-backed securities		–		–		–		–			–		40,920		45		–		(994	)		39,971
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations		–		–		–		–			–		–		1		–		–			1
Other		–		–		–		–			–		5		2		–		–			7
Obligations of state and political subdivisions		–		–		–		–			–		6		1		–		–			7
Obligations of foreign governments		–		–		–		–			–		9		–		–		–			9
Other		–		–		–		–			–		8		–		–		–			8
Total held-to-maturity	$	–	$	–	$	–	$	–		$	–	$	46,050	$	51	$	–	$	(1,137	)	$	44,964
Available-for-sale
U.S. Treasury and agencies	$	19,845	$	61	$	–	$	(67	)	$	19,839	$	19,604	$	11	$	–	$	(358	)	$	19,257
Mortgage-backed securities
Residential agency		93,903		557		–		(349	)		94,111		40,542		120		–		(910	)		39,752
Commercial agency		1,482		–		–		(29	)		1,453		2		–		–		–			2
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations		–		1		–		–			1		–		–		–		–			–
Other		375		7		–		–			382		397		6		–		–			403
Obligations of state and political subdivisions		6,499		318		–		(3	)		6,814		6,836		37		–		(172	)		6,701
Obligations of foreign governments		9		–		–		–			9		–		–		–		–			–
Corporate debt securities		4		–		–		–			4		–		–		–		–			–
Total available-for-sale	$	122,117	$	944	$	–	$	(448	)	$	122,613	$	67,381	$	174	$	–	$	(1,440	)	$	66,115

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

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

On December 31, 2019, the Company transferred all $43.6 billion of its held-to-maturity investment securities outstanding to the available-for-sale category to reflect its new intent for these securities, as a result of changes to regulatory capital requirements promulgated in 2019. In addition, the Company recognized $141 million of net unrealized gains on its Consolidated Balance Sheet as a result of the transfer.

Investment securities with a fair value of $8.4 billion at December 31, 2019, and $10.9 billion at December 31, 2018,

were pledged to secure public, private and trust deposits, repurchase agreements and for other purposes required by contractual obligation or law. Included in these amounts were securities where the Company and certain counterparties have agreements granting the counterparties the right to sell or pledge the securities. Investment securities securing these types of arrangements had a fair value of $269 million at December 31, 2019, and $2.1 billion at December 31, 2018.

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

Year Ended December 31 (Dollars in Millions)	2019		2018		2017
Taxable	$	2,680	$	2,396	$	2,043
Non-taxable		213		220		189
Total interest income from investment securities	$	2,893	$	2,616	$	2,232

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

Year Ended December 31 (Dollars in Millions)	2019			2018		2017
Realized gains	$	99		$	30	$	75
Realized losses		(26	)		–		(18	)
Net realized gains (losses)	$	73		$	30	$	57
Income tax (benefit) on net realized gains (losses)	$	18		$	7	$	22

The Company conducts a regular assessment of its investment securities with unrealized losses to determine whether investment securities are other-than-temporarily impaired considering, among other factors, the nature of the investment securities, the credit ratings or financial condition of the issuer, the extent and duration of the unrealized loss, expected cash flows of underlying collateral, the existence of any government or agency guarantees, market conditions and whether the Company intends to sell or it is more likely than not the Company will be required to sell the investment securities. The Company determines other-than-temporary impairment recorded inearnings for investment securities not intended to be sold by estimating the future cash flows of each individual investment security, using market information where available, and discounting the cash flows at the original effective rate of the investment security. Other-than-temporary impairment recorded in other comprehensive income (loss) is measured as the difference between that discounted amount and the fair value of each investment security. The total amount of other-than-temporary impairment recorded was immaterial for the years ended December 31, 2019, 2018 and 2017.

At December 31, 2019, certain investment securities had a fair value below amortized cost. The following table shows the gross unrealized losses and fair value of the Company’s available-for-sale investment securities with unrealized losses, aggregated by investment category and length of time the individual investment securities have been in continuous unrealized loss positions, at December 31, 2019:

	Less Than 12 Months					12 Months or Greater					Total
(Dollars in Millions)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury and agencies	$	3,869	$	(40	)	$	6,265	$	(27	)	$	10,134	$	(67	)
Residential agency mortgage-backed securities		16,292		(46	)		24,346		(303	)		40,638		(349	)
Commercial agency mortgage-backed securities		1,453		(29	)		–		–			1,453		(29	)
Other asset-backed securities		–		–			2		–			2		–
Obligations of state and political subdivisions		365		(3	)		–		–			365		(3	)
Corporate debt securities		4		–			–		–			4		–
Total investment securities	$	21,983	$	(118	)	$	30,613	$	(330	)	$	52,596	$	(448	)

The Company does not consider these unrealized losses to be credit-related. These unrealized losses primarily relate to changes in interest rates and market spreads subsequent to purchase. A substantial portion of investment securities that have unrealized losses are either U.S. Treasury and agencies, agency mortgage-backed or state and political securities. In general, the issuers of the investment securities are contractually prohibitedfrom prepayment at less than par, and the Company did not pay significant purchase premiums for these investment securities. At December 31, 2019, the Company had no plans to sell investment securities with unrealized losses, and believes it is more likely than not it would not be required to sell such investment securities before recovery of their amortized cost.

The following table provides information about the amortized cost, fair value and yield by maturity date of the available-for-sale investment securities outstanding at December 31, 2019:

(Dollars in Millions)	Amortized Cost		Fair Value		Weighted- Average Maturity in Years		Weighted- Average Yield(e)
U.S. Treasury and Agencies
Maturing in one year or less	$	4,243	$	4,242		.6		1.61	%
Maturing after one year through five years		12,881		12,901		2.4		1.65
Maturing after five years through ten years		2,721		2,696		7.5		1.95
Maturing after ten years		–		–		–		–
Total	$	19,845	$	19,839		2.7		1.68	%
Mortgage-Backed Securities(a)
Maturing in one year or less	$	197	$	197		.7		2.28	%
Maturing after one year through five years		66,940		67,102		3.6		2.30
Maturing after five years through ten years		27,339		27,349		6.0		2.58
Maturing after ten years		909		916		11.4		2.76
Total	$	95,385	$	95,564		4.4		2.39	%
Asset-Backed Securities(a)
Maturing in one year or less	$	–	$	–		–		—	%
Maturing after one year through five years		374		381		3.1		3.09
Maturing after five years through ten years		1		1		6.1		2.56
Maturing after ten years		–		1		15.3		2.41
Total	$	375	$	383		3.1		3.09	%
Obligations of State and Political Subdivisions(b)(c)
Maturing in one year or less	$	66	$	66		.1		5.81	%
Maturing after one year through five years		695		722		3.0		4.50
Maturing after five years through ten years		5,720		6,004		7.1		4.24
Maturing after ten years		18		22		14.0		6.15
Total	$	6,499	$	6,814		6.6		4.29	%
Other
Maturing in one year or less	$	13	$	13		.3		2.66	%
Maturing after one year through five years		–		–		–		–
Maturing after five years through ten years		–		–		–		–
Maturing after ten years		–		–		–		–
Total	$	13	$	13		.3		2.66	%
Total investment securities(d)	$	122,117	$	122,613		4.2		2.38	%

(a) Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities that take into account anticipated future prepayments.

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

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

(d) The weighted-average maturity of total available-for-sale and held-to-maturity investment securities was 5.3 years at December 31, 2018, with a corresponding weighted-average yield of 2.52 percent.

(e) Weighted-average yields for obligations of state and political subdivisions are presented on a fully-taxable equivalent basis based on a federal income tax rate of 21 percent. Yields on investment securities are computed based on amortized cost balances, excluding any premiums or discounts recorded related to the transfer of investment securities at fair value from available-for-sale to held-to-maturity.

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Employee Benefits - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Defined Benefit Plan Disclosure [Line Items]
Qualified employees maximum contribution to defined contribution savings plan allowed in percentage of annual compensation	75.00%
Company contribution, percentage company contribution matches of the employee's percentage contribution matched	100.00%
Employee retirement savings plan matching expenses	$ 179	$ 171	$ 156
Vesting service period for defined benefit pension plan	3 years
Global Equities [Member]
Defined Benefit Plan Disclosure [Line Items]
Asset allocation for the company's qualified pension plan	30.00%
Domestic Mid-Small Cap Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Asset allocation for the company's qualified pension plan	5.00%
Emerging Markets Equities [Member]
Defined Benefit Plan Disclosure [Line Items]
Asset allocation for the company's qualified pension plan	5.00%
Real Estate Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Asset allocation for the company's qualified pension plan	10.00%
Long-duration bonds [Member]
Defined Benefit Plan Disclosure [Line Items]
Asset allocation for the company's qualified pension plan	35.00%
Hedge Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Asset allocation for the company's qualified pension plan	5.00%
Private Equity Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Asset allocation for the company's qualified pension plan	10.00%
Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Company contributions to qualified pension and postretirement welfare plan	$ 26	24
Plan assets measured at fair value	5,838	4,936	5,482
Pension Plans [Member] | Qualified Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Company contributions to qualified pension and postretirement welfare plan	0	0
Company contributions to pension and postretirement welfare plan in next fiscal year	125
Pension Plans [Member] | Nonqualified Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Company contributions to pension and postretirement welfare plan in next fiscal year	25
Pension Plans [Member] | Real Estate Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value		109
Pension Plans [Member] | Hedge Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	283	290
Pension Plans [Member] | Private Equity Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	304	225
Postretirement Welfare Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Company contributions to qualified pension and postretirement welfare plan	4	5
Company contributions to pension and postretirement welfare plan in next fiscal year	4
Plan assets measured at fair value	84	81	$ 87
Management Arrangement With Related Party [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	$ 57	$ 52

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Premises and Equipment

12 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

Premises and Equipment

  NOTE 8   Premises and Equipment

Premises and equipment at December 31 consisted of the following:

(Dollars in Millions)	2019			2018
Land	$	504		$	515
Buildings and improvements		3,513			3,481
Furniture, fixtures and equipment		3,366			3,110
Right of use assets on operating leases		1,141			–
Right of use assets on finance leases		111			121
Construction in progress		21			20
		8,656			7,247
Less accumulated depreciation and amortization		(4,954	)		(4,790	)
Total	$	3,702		$	2,457

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Premises and Equipment - Premises and Equipment (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Gross Premises and Equipment	$ 8,656	$ 7,247
Less accumulated depreciation and amortization	(4,954)	(4,790)
Total Premises and Equipment	3,702	2,457
Land [Member]
Property, Plant and Equipment [Line Items]
Gross Premises and Equipment	504	515
Buildings and Improvements [Member]
Property, Plant and Equipment [Line Items]
Gross Premises and Equipment	3,513	3,481
Furniture, Fixtures and Equipment [Member]
Property, Plant and Equipment [Line Items]
Gross Premises and Equipment	3,366	3,110
Right of Use Assets on Operating Leases [Member]
Property, Plant and Equipment [Line Items]
Gross Premises and Equipment	1,141
Right of Use Assets on Finance Leases [Member]
Property, Plant and Equipment [Line Items]
Gross Premises and Equipment	111	121
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Gross Premises and Equipment	$ 21	$ 20

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Loans and Allowance for Credit Losses - Summary of Loans Modified as TDRs (Detail) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($) SecurityLoan	Dec. 31, 2018 USD ($) SecurityLoan	Dec. 31, 2017 USD ($) SecurityLoan
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	47,454	45,528	47,984
Pre-Modification Outstanding Loan Balance	$ 1,664	$ 1,626	$ 1,675
Post-Modification Outstanding Loan Balance	$ 1,612	$ 1,579	$ 1,593
Commercial [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	3,445	2,824	2,758
Pre-Modification Outstanding Loan Balance	$ 376	$ 336	$ 380
Post-Modification Outstanding Loan Balance	$ 359	$ 311	$ 328
Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	136	127	128
Pre-Modification Outstanding Loan Balance	$ 129	$ 168	$ 82
Post-Modification Outstanding Loan Balance	$ 125	$ 169	$ 78
Residential Mortgages [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	417	526	800
Pre-Modification Outstanding Loan Balance	$ 55	$ 73	$ 90
Post-Modification Outstanding Loan Balance	$ 54	$ 69	$ 88
Other Retail [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	2,952	2,462	3,881
Pre-Modification Outstanding Loan Balance	$ 63	$ 58	$ 79
Post-Modification Outstanding Loan Balance	$ 61	$ 55	$ 68
Credit Card [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	34,247	33,318	33,615
Pre-Modification Outstanding Loan Balance	$ 185	$ 169	$ 161
Post-Modification Outstanding Loan Balance	$ 186	$ 171	$ 162
Covered Loans [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan		3	11
Pre-Modification Outstanding Loan Balance		$ 1	$ 2
Post-Modification Outstanding Loan Balance		$ 1	$ 2
Total Loans, Excluding Loans Purchased from GNMA Mortgage Pools [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	41,197	39,260	41,193
Pre-Modification Outstanding Loan Balance	$ 808	$ 805	$ 794
Post-Modification Outstanding Loan Balance	$ 785	$ 776	$ 726
Government National Mortgage Association [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	6,257	6,268	6,791
Pre-Modification Outstanding Loan Balance	$ 856	$ 821	$ 881
Post-Modification Outstanding Loan Balance	$ 827	$ 803	$ 867

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U.S. Bancorp (Parent Company) - Condensed Statement of Cash Flows of Parent Company Only (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Operating Activities
Net income attributable to U.S. Bancorp	$ 6,914	$ 7,096	$ 6,218
Adjustments to reconcile net income to net cash provided by operating activities
Other, net	458	1,010	(2,049)
Net cash provided by operating activities	4,889	10,564	6,472
Investing Activities
Other, net	(1,295)	(289)	(404)
Net cash used in investing activities	(21,560)	(8,977)	(12,126)
Financing Activities
Net increase (decrease) in short-term borrowings	9,584	(2,512)	2,688
Proceeds from issuance of long-term debt	9,899	12,078	9,434
Principal payments or redemption of long-term debt	(11,119)	(2,928)	(10,517)
Proceeds from issuance of preferred stock		565	993
Proceeds from issuance of common stock	88	86	159
Repurchase of preferred stock			(1,085)
Repurchase of common stock	(4,525)	(2,822)	(2,631)
Cash dividends paid on preferred stock	(302)	(274)	(284)
Cash dividends paid on common stock	(2,443)	(2,092)	(1,928)
Net cash used in financing activities	17,623	361	9,454
Cash and due from banks at beginning of period	21,453	19,505	15,705
Cash and due from banks at end of period	22,405	21,453	19,505
Parent Company [Member]
Operating Activities
Net income attributable to U.S. Bancorp	6,914	7,096	6,218
Adjustments to reconcile net income to net cash provided by operating activities
Equity in undistributed income of subsidiaries	(65)	(2,050)	(1,563)
Other, net	231	359	(125)
Net cash provided by operating activities	7,080	5,405	4,530
Investing Activities
Proceeds from sales and maturities of investment securities	291	39	100
Purchases of investment securities	(1,013)	(10)	(844)
Net (increase) decrease in short-term advances to subsidiaries	578	(488)	(790)
Long-term advances to subsidiaries	(2,600)	(500)
Principal collected on long-term advances to subsidiaries	2,550		500
Other, net	(341)	304	(12)
Net cash used in investing activities	(535)	(655)	(1,046)
Financing Activities
Net increase (decrease) in short-term borrowings	8	(1)	(21)
Proceeds from issuance of long-term debt	3,743	2,100	3,920
Principal payments or redemption of long-term debt	(1,500)	(1,500)	(1,250)
Proceeds from issuance of preferred stock		565	993
Proceeds from issuance of common stock	88	86	159
Repurchase of preferred stock			(1,085)
Repurchase of common stock	(4,525)	(2,822)	(2,631)
Cash dividends paid on preferred stock	(302)	(274)	(284)
Cash dividends paid on common stock	(2,443)	(2,092)	(1,928)
Net cash used in financing activities	(4,931)	(3,938)	(2,127)
Change in cash and due from banks	1,614	812	1,357
Cash and due from banks at beginning of period	9,969	9,157	7,800
Cash and due from banks at end of period	$ 11,583	$ 9,969	$ 9,157

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Loans and Allowance for Credit Losses - Summary of Loans by Portfolio Class and Company's Internal Credit Quality Rating (Parenthetical) (Detail) - Government National Mortgage Association [Member] $ in Billions	Dec. 31, 2019 USD ($)
Financing Receivable, Recorded Investment [Line Items]
Restructured GNMA loans,classified with a pass rating	$ 1.7
GNMA loans 90 days or more past due, classified with a pass rating	$ 1.6

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Leases - Summary of Weighted-Average Remaining Lease Terms and Discount Rates (Detail)	Dec. 31, 2019
Leases [Abstract]
Weighted-average remaining lease term of operating leases (in years)	7 years 4 months 24 days
Weighted-average remaining lease term of finance leases (in years)	10 years 8 months 12 days
Weighted-average discount rate of operating leases	3.20%
Weighted-average discount rate of finance leases	14.30%

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Netting Arrangements for Certain Financial Instruments and Securities Financing Activities (Tables)

12 Months Ended

Dec. 31, 2019

Text Block [Abstract]

Summary of Maturities by Category of Collateral Pledged for Repurchase Agreements and Securities Loaned Transactions

The following table summarizes the maturities by category of collateral pledged for repurchase agreements and securities loaned transactions:

(Dollars in Millions)	Overnight and Continuous		Less Than 30 Days		30-89 Days		Greater Than 90 Days		Total
December 31, 2019
Repurchase agreements
U.S. Treasury and agencies	$	289	$	—	$	—	$	—	$	289
Residential agency mortgage-backed securities		266		—		—		—		266
Corporate debt securities		610		—		—		—		610
Total repurchase agreements		1,165		—		—		—		1,165
Securities loaned
Corporate debt securities		50		—		—		—		50
Total securities loaned		50		—		—		—		50
Gross amount of recognized liabilities	$	1,215	$	—	$	—	$	—	$	1,215
December 31, 2018
Repurchase agreements
U.S. Treasury and agencies	$	134	$	—	$	—	$	—	$	134
Residential agency mortgage-backed securities		565		—		945		470		1,980
Corporate debt securities		480		—		—		—		480
Total repurchase agreements		1,179		—		945		470		2,594
Securities loaned
Corporate debt securities		227		—		—		—		227
Total securities loaned		227		—		—		—		227
Gross amount of recognized liabilities	$	1,406	$	—	$	945	$	470	$	2,821

Information on Company's Accounting Netting Adjustments and Items Not Offset in Consolidated Balance Sheet Assets But Available for Offset in Event of Default

The following tables provide information on the Company’s netting adjustments, and items not offset on the Consolidated Balance Sheet but available for offset in the event of default:

	Gross Recognized Assets		Gross Amounts Offset on the Consolidated Balance Sheet(a)			Net Amounts Presented on the Consolidated Balance Sheet		Gross Amounts Not Offset on the Consolidated Balance Sheet
(Dollars in Millions)								Financial Instruments(b)			Collateral Received(c)			Net Amount
December 31, 2019
Derivative assets(d)	$	2,857	$	(982	)	$	1,875	$	(80	)	$	(116	)	$	1,679
Reverse repurchase agreements		1,021		—			1,021		(152	)		(869	)		—
Securities borrowed		1,624		—			1,624		—			(1,569	)		55
Total	$	5,502	$	(982	)	$	4,520	$	(232	)	$	(2,554	)	$	1,734
December 31, 2018
Derivative assets(d)	$	1,987	$	(942	)	$	1,045	$	(106	)	$	(16	)	$	923
Reverse repurchase agreements		205		—			205		(114	)		(91	)		—
Securities borrowed		1,069		—			1,069		—			(1,039	)		30
Total	$	3,261	$	(942	)	$	2,319	$	(220	)	$	(1,146	)	$	953

(a) Includes $429 million and $236 million of cash collateral related payables that were netted against derivative assets at December 31, 2019 and 2018, respectively.

(b) For derivative assets this includes any derivative liability fair values that could be offset in the event of counterparty default; for reverse repurchase agreements this includes any repurchase agreement payables that could be offset in the event of counterparty default; for securities borrowed this includes any securities loaned payables that could be offset in the event of counterparty default.

(c) Includes the fair value of securities received by the Company from the counterparty. These securities are not included on the Consolidated Balance Sheet unless the counterparty defaults.

(d) Excludes $40 million and $23 million at December 31, 2019 and 2018, respectively, of derivative assets not subject to netting arrangements.

Information on Company's Accounting Netting Adjustments and Items Not Offset in Consolidated Balance Sheet Liabilities But Available for Offset in Event of Default

	Gross Recognized Liabilities		Gross Amounts Offset on the Consolidated Balance Sheet(a)			Net Amounts Presented on the Consolidated Balance Sheet		Gross Amounts Not Offset on the Consolidated Balance Sheet
(Dollars in Millions)								Financial Instruments(b)			Collateral Pledged(c)			Net Amount
December 31, 2019
Derivative liabilities(d)	$	1,816	$	(1,067	)	$	749	$	(80	)	$	–		$	669
Repurchase agreements		1,165		–			1,165		(152	)		(1,012	)		1
Securities loaned		50		–			50		–			(49	)		1
Total	$	3,031	$	(1,067	)	$	1,964	$	(232	)	$	(1,061	)	$	671
December 31, 2018
Derivative liabilities(d)	$	1,710	$	(946	)	$	764	$	(106	)	$	–		$	658
Repurchase agreements		2,594		–			2,594		(114	)		(2,480	)		–
Securities loaned		227		–			227		–			(224	)		3
Total	$	4,531	$	(946	)	$	3,585	$	(220	)	$	(2,704	)	$	661

(a) Includes $514 million and $240 million of cash collateral related receivables that were netted against derivative liabilities at December 31, 2019 and 2018, respectively.

(b) For derivative liabilities this includes any derivative asset fair values that could be offset in the event of counterparty default; for repurchase agreements this includes any reverse repurchase agreement receivables that could be offset in the event of counterparty default; for securities loaned this includes any securities borrowed receivables that could be offset in the event of counterparty default.

(c) Includes the fair value of securities pledged by the Company to the counterparty. These securities are included on the Consolidated Balance Sheet unless the Company defaults.

(d) Excludes $167 million and $85 million at December 31, 2019 and 2018, respectively, of derivative liabilities not subject to netting arrangements.

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Fair Values of Assets and Liabilities - Valuation Assumption Ranges for MSRs (Detail) - Mortgage Servicing Rights [Member]	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expected prepayment	12.40%	9.50%
Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expected prepayment	9.00%
Option adjusted spread	6.00%
Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expected prepayment	22.00%
Option adjusted spread	10.00%
Weighted Average [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expected prepayment	12.00%
Option adjusted spread	7.00%

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U.S. Bancorp (Parent Company) (Tables)

12 Months Ended

Dec. 31, 2019

Condensed Financial Information Disclosure [Abstract]

Condensed Statement of Financial Position of Parent Company Only

Condensed Balance Sheet

At December 31 (Dollars in Millions)	2019		2018
Assets
Due from banks, principally interest-bearing	$	11,583	$	9,969
Available-for-sale securities		1,631		921
Investments in bank subsidiaries		48,518		47,549
Investments in nonbank subsidiaries		3,128		2,568
Advances to bank subsidiaries		3,850		3,800
Advances to nonbank subsidiaries		1,465		2,543
Other assets		1,211		813
Total assets	$	71,386	$	68,163
Liabilities and Shareholders’ Equity
Short-term funds borrowed	$	8	$	–
Long-term debt		18,602		16,291
Other liabilities		923		843
Shareholders’ equity		51,853		51,029
Total liabilities and shareholders’ equity	$	71,386	$	68,163

Condensed Income Statement of Parent Company Only

Condensed Income Statement

Year Ended December 31 (Dollars in Millions)	2019			2018			2017
Income
Dividends from bank subsidiaries	$	7,100		$	5,300		$	4,800
Dividends from nonbank subsidiaries		6			6			5
Interest from subsidiaries		317			220			159
Other income		25			33			41
Total income		7,448			5,559			5,005
Expense
Interest expense		551			471			402
Other expense		140			133			124
Total expense		691			604			526
Income before income taxes and equity in undistributed income of subsidiaries		6,757			4,955			4,479
Applicable income taxes		(92	)		(91	)		(176	)
Income of parent company		6,849			5,046			4,655
Equity in undistributed income of subsidiaries		65			2,050			1,563
Net income attributable to U.S. Bancorp	$	6,914		$	7,096		$	6,218

Condensed Statement of Cash Flows of Parent Company Only

Condensed Statement of Cash Flows

Year Ended December 31 (Dollars in Millions)	2019			2018			2017
Operating Activities
Net income attributable to U.S. Bancorp	$	6,914		$	7,096		$	6,218
Adjustments to reconcile net income to net cash provided by operating activities
Equity in undistributed income of subsidiaries		(65	)		(2,050	)		(1,563	)
Other, net		231			359			(125	)
Net cash provided by operating activities		7,080			5,405			4,530
Investing Activities
Proceeds from sales and maturities of investment securities		291			39			100
Purchases of investment securities		(1,013	)		(10	)		(844	)
Net (increase) decrease in short-term advances to subsidiaries		578			(488	)		(790	)
Long-term advances to subsidiaries		(2,600	)		(500	)		–
Principal collected on long-term advances to subsidiaries		2,550			–			500
Other, net		(341	)		304			(12	)
Net cash used in investing activities		(535	)		(655	)		(1,046	)
Financing Activities
Net increase (decrease) in short-term borrowings		8			(1	)		(21	)
Proceeds from issuance of long-term debt		3,743			2,100			3,920
Principal payments or redemption of long-term debt		(1,500	)		(1,500	)		(1,250	)
Proceeds from issuance of preferred stock		–			565			993
Proceeds from issuance of common stock		88			86			159
Repurchase of preferred stock		–			–			(1,085	)
Repurchase of common stock		(4,525	)		(2,822	)		(2,631	)
Cash dividends paid on preferred stock		(302	)		(274	)		(284	)
Cash dividends paid on common stock		(2,443	)		(2,092	)		(1,928	)
Net cash used in financing activities		(4,931	)		(3,938	)		(2,127	)
Change in cash and due from banks		1,614			812			1,357
Cash and due from banks at beginning of year		9,969			9,157			7,800
Cash and due from banks at end of year	$	11,583		$	9,969		$	9,157

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Netting Arrangements for Certain Financial Instruments and Securities Financing Activities - Information on Company's Accounting Netting Adjustments and Items Not Offset in Consolidated Balance Sheet Assets But Available for Offset in Event of Default (Parenthetical) (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Offsetting [Abstract]
Cash collateral netted against derivative assets	$ 429	$ 236
Derivative assets not subject to netting arrangements	$ 40	$ 23

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Consolidated Statement of Shareholders' Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Common stock dividends, share	$ 1.58	$ 1.34	$ 1.16
Series A [Member]
Preferred stock dividends declared per share	3,654.95	3,548.61	3,548.61
Series B [Member]
Preferred stock dividends declared per share	887.15	887.15	887.15
Series F [Member]
Preferred stock dividends declared per share	1,625.00	1,625.00	1,625.00
Series G [Member]
Preferred stock dividends declared per share			375.00
Series H [Member]
Preferred stock dividends declared per share	1,287.52	1,287.52	1,287.52
Series I [Member]
Preferred stock dividends declared per share	1,281.25	1,281.25	1,281.25
Series J [Member]
Preferred stock dividends declared per share	1,325.00	1,325.00	$ 890.69
Series K [Member]
Preferred stock dividends declared per share	$ 1,375.00	$ 576.74

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Fair Values of Assets and Liabilities - Changes in Fair Value for All Assets and Liabilities Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3) (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Mortgage Servicing Rights [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning of Period Balance	$ 2,791	$ 2,645	$ 2,591
Net Gains (Losses) Included in Net Income	(829)	(232)	(404)
Purchases	20	8	13
Sales	5	(27)
Issuances	559	397	445
End of Period Balance	2,546	2,791	2,645
Net Change in Unrealized Gains (Losses) Relating to Assets and Liabilities Held at End of Period	(829)	(232)	(404)
Corporate Debt Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning of Period Balance			9
Net Gains (Losses) Included in Other Comprehensive Income (Loss)			2
Sales			(11)
Obligations of State and Political Subdivisions [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Transfers into Level 3	1
End of Period Balance	1
Available-for-Sale Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning of Period Balance			448
Net Gains (Losses) Included in Other Comprehensive Income (Loss)			(17)
Sales			(422)
Principal Payments			(9)
Transfers into Level 3	9
End of Period Balance	9
Derivative [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning of Period Balance	80	107	171
Net Gains (Losses) Included in Net Income	769	21	317
Purchases	142	13	1
Sales	(9)	(41)	(10)
Settlements	(172)	(20)	(372)
End of Period Balance	810	80	107
Net Change in Unrealized Gains (Losses) Relating to Assets and Liabilities Held at End of Period	782	$ 34	(52)
Residential Mortgage-Backed Securities [Member] | Non-Agency Prime [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning of Period Balance			242
Net Gains (Losses) Included in Other Comprehensive Income (Loss)			(2)
Sales			(234)
Principal Payments			(6)
Residential Mortgage-Backed Securities [Member] | Non-Agency Non-Prime [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning of Period Balance			195
Net Gains (Losses) Included in Other Comprehensive Income (Loss)			(17)
Sales			(175)
Principal Payments			(3)
Asset-Backed Securities [Member] | Other Asset-Backed Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning of Period Balance			2
Sales			$ (2)
Transfers into Level 3	7
End of Period Balance	7
Asset-Backed Securities [Member] | Collateralized Loan Obligations [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Transfers into Level 3	1
End of Period Balance	$ 1

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Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Held-to-maturity securities, Fair Value		$ 44,964
Securities, pledged as collateral	$ 269	2,100
Mortgage loans, carried at fair value	$ 5,533	$ 2,035
Common stock, par value	$ 0.01	$ 0.01
Common stock, share-authorized (actual number of shares)	4,000,000,000	4,000,000,000
Common stock, shares issued (actual number of shares)	2,125,725,742	2,125,725,742
Treasury stock, shares (actual number of shares)	591,570,506	517,391,021
Time deposits greater than 250,000	$ 7,800	$ 15,300
Available-for-Sale Securities [Member]
Securities, pledged as collateral	269	2,057
Trading Assets, Excluding Debt and Equity Securities [Member]
Securities, pledged as collateral	$ 951	$ 843

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Investment Securities - Amount of Interest Income from Taxable and Non-Taxable Investment Securities (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Interest Income, Securities, Operating, by Taxable Status [Abstract]
Taxable	$ 2,680	$ 2,396	$ 2,043
Non-taxable	213	220	189
Total interest income from investment securities	$ 2,893	$ 2,616	$ 2,232

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Accounting for Transfers and Servicing of Financial Assets and Variable Interest Entities (Tables)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Summary of Investments in Community Development and Tax-advantaged VIEs

The following table provides a summary of investments in community development and tax-advantaged VIEs that the Company has not consolidated:

At December 31 (Dollars in Millions)	2019		2018
Investment carrying amount	$	6,148	$	5,823
Unfunded capital and other commitments		2,938		2,778
Maximum exposure to loss		12,118		12,360

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Derivative Instruments - Asset and Liability Management Derivative Positions of Company (Detail) - Asset and Liability Management Positions [Member] - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Derivative [Line Items]
Notional Value, Assets	$ 58,966	$ 25,635
Fair Value, Assets	142	155
Notional Value, Liabilities	42,288	26,756
Fair Value, Liabilities	301	123
Other Derivatives [Member]
Derivative [Line Items]
Notional Value, Assets	$ 34	$ 1
Derivative Asset Average Remaining Maturity Period	3 days	3 days
Notional Value, Liabilities	$ 1,823	$ 1,458
Fair Value, Liabilities	$ 165	$ 84
Derivative Liability Average Remaining Maturity Period	2 years 5 months 12 days	1 year 6 months
Other Economic Hedges [Member] | Interest Rate Contracts [Member] | Receive Fixed/Pay Floating Swaps [Member]
Derivative [Line Items]
Notional Value, Assets	$ 4,408	$ 3,605
Derivative Asset Average Remaining Maturity Period	5 years 11 months 26 days	14 years 9 months 18 days
Notional Value, Liabilities	$ 5,316	$ 4,333
Derivative Liability Average Remaining Maturity Period	13 years 14 days	6 years 11 months 19 days
Other Economic Hedges [Member] | Interest Rate Contracts [Member] | Pay Fixed/Receive Floating Swaps [Member]
Derivative [Line Items]
Notional Value, Assets	$ 1,259	$ 4,333
Derivative Asset Average Remaining Maturity Period	5 years 8 months 1 day	6 years 11 months 19 days
Notional Value, Liabilities	$ 4,497	$ 1,132
Derivative Liability Average Remaining Maturity Period	6 years 10 days	7 years 7 months 20 days
Other Economic Hedges [Member] | Interest Rate Contracts [Member] | Futures and Forwards [Member] | Purchased [Member]
Derivative [Line Items]
Notional Value, Assets	$ 5,409	$ 2,839
Fair Value, Assets	$ 17	$ 27
Derivative Asset Average Remaining Maturity Period	29 days	25 days
Notional Value, Liabilities	$ 5,477	$ 1,140
Fair Value, Liabilities	$ 11	$ 5
Derivative Liability Average Remaining Maturity Period	25 days	18 days
Other Economic Hedges [Member] | Interest Rate Contracts [Member] | Futures and Forwards [Member] | Written [Member]
Derivative [Line Items]
Notional Value, Assets	$ 16,333	$ 994
Fair Value, Assets	$ 13	$ 3
Derivative Asset Average Remaining Maturity Period	9 months 21 days	21 days
Notional Value, Liabilities	$ 8,113	$ 13,968
Fair Value, Liabilities	$ 25	$ 30
Derivative Liability Average Remaining Maturity Period	10 days	8 months 19 days
Other Economic Hedges [Member] | Interest Rate Contracts [Member] | Options [Member] | Purchased [Member]
Derivative [Line Items]
Notional Value, Assets	$ 10,180	$ 5,080
Fair Value, Assets	$ 79	$ 88
Derivative Asset Average Remaining Maturity Period	2 years 11 months 19 days	10 years 9 months 7 days
Other Economic Hedges [Member] | Interest Rate Contracts [Member] | Options [Member] | Written [Member]
Derivative [Line Items]
Notional Value, Assets	$ 1,270	$ 584
Fair Value, Assets	$ 30	$ 16
Derivative Asset Average Remaining Maturity Period	29 days	1 month 2 days
Notional Value, Liabilities	$ 4,238	$ 3
Fair Value, Liabilities	$ 81
Derivative Liability Average Remaining Maturity Period	2 years 25 days	1 month 2 days
Other Economic Hedges [Member] | Foreign Exchange Forward Contracts [Member]
Derivative [Line Items]
Notional Value, Assets	$ 113	$ 549
Fair Value, Assets	$ 1	$ 7
Derivative Asset Average Remaining Maturity Period	18 days	10 days
Notional Value, Liabilities	$ 467	$ 75
Fair Value, Liabilities	$ 6	$ 1
Derivative Liability Average Remaining Maturity Period	14 days	18 days
Other Economic Hedges [Member] | Equity Contracts [Member]
Derivative [Line Items]
Notional Value, Assets	$ 128	$ 19
Fair Value, Assets	$ 2	$ 1
Derivative Asset Average Remaining Maturity Period	5 months 12 days	9 months 25 days
Notional Value, Liabilities	$ 20	$ 104
Fair Value, Liabilities		$ 2
Derivative Liability Average Remaining Maturity Period	1 year 21 days	5 months 12 days
Fair Value Hedges [Member] | Interest Rate Contracts [Member] | Receive Fixed/Pay Floating Swaps [Member]
Derivative [Line Items]
Notional Value, Assets	$ 18,300
Derivative Asset Average Remaining Maturity Period	3 years 10 months 20 days
Notional Value, Liabilities	$ 4,900
Derivative Liability Average Remaining Maturity Period	3 years 5 months 26 days
Cash Flow Hedges [Member] | Interest Rate Contracts [Member] | Pay Fixed/Receive Floating Swaps [Member]
Derivative [Line Items]
Notional Value, Assets	$ 1,532	$ 7,422
Fair Value, Assets		$ 8
Derivative Asset Average Remaining Maturity Period	6 years 21 days	3 years 1 month 9 days
Notional Value, Liabilities	$ 7,150	$ 4,320
Fair Value, Liabilities	$ 10
Derivative Liability Average Remaining Maturity Period	2 years 1 month 9 days	1 year 9 months 7 days
Net Investment Hedges [Member] | Foreign Exchange Forward Contracts [Member]
Derivative [Line Items]
Notional Value, Assets		$ 209
Fair Value, Assets		$ 5
Derivative Asset Average Remaining Maturity Period		18 days
Notional Value, Liabilities	$ 287	$ 223
Fair Value, Liabilities	$ 3	$ 1
Derivative Liability Average Remaining Maturity Period	14 days	18 days

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Stock-Based Compensation - Summary of Company's Restricted Shares of Stock and Unit Awards (Detail) - $ / shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Nonvested Number Of Shares And Weighted Average Grant Date Fair Value [Abstract]
Outstanding at beginning of period, shares	6,719,298	7,446,955	8,265,507
Granted, shares	3,519,474	3,213,023	2,850,927
Vested, shares	(3,270,778)	(3,373,323)	(3,295,376)
Cancelled, shares	(361,161)	(567,357)	(374,103)
Outstanding at end of period, shares	6,606,833	6,719,298	7,446,955
Outstanding at beginning of period, weighted-average grant-date fair value	$ 48.17	$ 44.49	$ 39.50
Granted, weighted-average grant-date fair value	50.45	55.03	54.45
Vested, weighted-average grant-date fair value	48.69	46.42	40.66
Cancelled, weighted-average grant-date fair value	50.55	49.07	43.91
Outstanding at end of period, weighted-average grant-date fair value	$ 48.99	$ 48.17	$ 44.49

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Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Basis of Presentation

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

Uses of Estimates

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

Securities

Securities

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

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

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

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

Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase Securities purchased under agreements to resell and securities sold under agreements to repurchase are accounted for as collateralized financing transactions with a receivable or payable recorded at the amounts at which the securities were acquired or sold, plus accrued interest. Collateral requirements are continually monitored and additional collateral is received or provided as required. The Company records a receivable or payable for cash collateral paid or received.

Equity Investments

Equity Investments  

Equity investments in entities where the Company has a significant influence (generally between 20 percent and 50 percent ownership), but does not control the entity, are accounted for using the equity method. Investments in limited partnerships and similarly structured limited liability companies where the Company’s ownership interest is greater than 5 percent are accounted for using the equity method. Equity investments not using the equity method are accounted for at fair value with changes in fair value and realized gains or losses reported in noninterest income, unless fair value is not readily determinable, in which case the investment is carried at cost subject to adjustments for any observable market transactions on the same or similar instruments of the investee. Most of the Company’s equity investments do not have readily determinable fair values. All equity investments are evaluated for impairment at least annually and more frequently if certain criteria are met.

Loans

Loans

The Company offers a broad array of lending products and categorizes its loan portfolio into two segments, which is the level at which it develops and documents a systematic methodology to determine the allowance for credit losses. The Company’s two loan portfolio segments are commercial lending and consumer lending. Previously, the Company categorized loans covered under loss sharing or similar credit protection agreements with the Federal Deposit Insurance Corporation (“FDIC”), along with the related indemnification asset, in a separate covered loans segment. During 2018 the majority of these loans were sold and the loss share coverage expired. Any remaining balances were reclassified to the loan segment they would have otherwise been included in had the loss share coverage not been in place. The Company further disaggregates its loan portfolio segments into various classes based on their underlying risk characteristics. The two classes within the commercial lending segment are commercial loans and commercial real estate loans. The three classes within the consumer lending segment are residential mortgages, credit card loans and other retail loans.

The Company’s accounting methods for loans differ depending on whether the loans are originated or purchased, and

for purchased loans, whether the loans were acquired at a discount related to evidence of credit deterioration since date of origination.

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

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

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

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

Commitments to Extend Credit Unfunded commitments for residential mortgage loans intended to be held for sale are considered derivatives and recorded in other assets and other liabilities on the Consolidated Balance Sheet at fair value with

changes in fair value recorded in noninterest income. All other unfunded loan commitments are not considered derivatives and are not reported on the Consolidated Balance Sheet. For loans purchased after January 1, 2009, the fair value of the unfunded credit commitments is generally considered in the determination of the fair value of the loans recorded at the date of acquisition. Reserves for credit exposure on all other unfunded credit commitments are recorded in other liabilities.

Allowance for Credit Losses The allowance for credit losses is established for probable and estimable losses incurred in the Company’s loan and lease portfolio, including unfunded credit commitments. The allowance for credit losses is increased through provisions charged to earnings and reduced by net charge-offs. Management evaluates the appropriateness of the allowance for incurred losses on a quarterly basis.

The allowance recorded for loans in the commercial lending segment is based on reviews of individual credit relationships and considers the migration analysis of commercial lending segment loans and actual loss experience. For each loan type, this historical loss experience is adjusted as necessary to consider any relevant changes in portfolio composition, lending policies, underwriting standards, risk management practices or economic conditions. The results of the analysis are evaluated quarterly to confirm the selected loss experience is appropriate for each commercial loan type. The allowance recorded for impaired loans greater than $5 million in the commercial lending segment is based on an individual loan analysis utilizing expected cash flows discounted using the original effective interest rate, the observable market price of the loan, or the fair value of the collateral, less selling costs, for collateral-dependent loans, rather than the migration analysis. The allowance recorded for all other commercial lending segment loans is determined on a homogenous pool basis and includes consideration of product mix, risk characteristics of the portfolio, delinquency status, bankruptcy experience, portfolio growth and historical losses, adjusted for current trends. The Company also considers the impacts of any loan modifications made to commercial lending segment loans and any subsequent payment defaults to its expectations of cash flows, principal balance, and current expectations about the borrower’s ability to pay in determining the allowance for credit losses.

The allowance recorded for Troubled Debt Restructuring (“TDR”) loans and purchased impaired loans in the consumer lending segment is determined on a homogenous pool basis utilizing expected cash flows discounted using the original effective interest rate of the pool, or the prior quarter effective rate, respectively. The allowance for collateral-dependent loans in the consumer lending segment is determined based on the fair value of the collateral less costs to sell. The allowance recorded for all other consumer lending segment loans is determined on a homogenous pool basis and includes consideration of product mix, risk characteristics of the portfolio, bankruptcy experience, delinquency status, refreshed loan-to-value ratios when possible, portfolio growth and historical losses, adjusted for current trends. The Company also considers any modifications made to

consumer lending segment loans including the impacts of any subsequent payment defaults since modification in determining the allowance for credit losses, such as the borrower’s ability to pay under the restructured terms, and the timing and amount of payments.

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

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

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

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

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

is placed on nonaccrual status, unpaid accrued interest is reversed, reducing interest income in the current period.

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

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

For all loan classes, interest payments received on nonaccrual loans are generally recorded as a reduction to a loan’s carrying amount while a loan is on nonaccrual and are recognized as interest income upon payoff of the loan. However, interest income may be recognized for interest payments if the remaining carrying amount of the loan is believed to be collectible. In certain circumstances, loans in any class may be restored to accrual status, such as when a loan has demonstrated sustained repayment performance or no amounts are past due and prospects for future payment are no longer in doubt; or when the loan becomes well secured and is in the process of collection. Loans where there has been a partial charge-off may be returned to accrual status if all principal and interest (including amounts previously charged-off) is expected to be collected and the loan is current. Generally, purchased impaired loans are considered accruing loans. However, the timing and amount of future cash flows for some loans is not reasonably estimable, and those loans are classified as nonaccrual loans with interest income not 

recognized until the timing and amount of the future cash flows can be reasonably estimated.

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

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

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

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

Modifications for the consumer lending segment are generally part of programs the Company has initiated. The Company modifies residential mortgage loans under Federal Housing Administration, United States Department of Veterans Affairs, or its own internal programs. Under these programs, the Company 

offers qualifying homeowners the opportunity to permanently modify their loan and achieve more affordable monthly payments by providing loan concessions. These concessions may include adjustments to interest rates, conversion of adjustable rates to fixed rates, extension of maturity dates or deferrals of payments, capitalization of accrued interest and/or outstanding advances, or in limited situations, partial forgiveness of loan principal. In most instances, participation in residential mortgage loan restructuring programs requires the customer to complete a short-term trial period. A permanent loan modification is contingent on the customer successfully completing the trial period arrangement, and the loan documents are not modified until that time. The Company reports loans in a trial period arrangement as TDRs and continues to report them as TDRs after the trial period.

Credit card and other retail loan TDRs are generally part of distinct restructuring programs providing customers experiencing financial difficulty with modifications whereby balances may be amortized up to 60 months, and generally include waiver of fees and reduced interest rates.

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

Acquired loans restructured after acquisition are not considered TDRs for accounting and disclosure purposes if the loans evidenced credit deterioration as of the acquisition date and are accounted for in pools.

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

Factors used by the Company in determining whether all principal and interest payments due on commercial and commercial real estate loans will be collected and, therefore, whether those loans are impaired include, but are not limited to, the financial condition of the borrower, collateral and/or guarantees on the loan, and the borrower’s estimated future ability to pay based on industry, geographic location and certain financial ratios. The evaluation of impairment on residential mortgages, credit card loans and other retail loans is primarily driven by delinquency status of individual loans or whether a loan has been modified, and considers any government guarantee where applicable.

Leases The Company, as a lessor, originates retail and commercial leases either directly to the consumer or indirectly through dealer networks. Retail leases, primarily automobiles,

have 3 to 5 year terms. Commercial leases may include high dollar assets such as aircraft or lower cost items such as office equipment. At lease inception, retail lease customers are provided with an end-of-term purchase option, which is based on the expected fair value of the automobile at the expiration of the lease. Automobile leases do not typically contain options to extend or terminate the lease. Equipment leases may contain various types of purchase options. Some option amounts are a stated value, while others are determined using the fair market value at the time of option exercise.

Residual values on leased assets are reviewed regularly for impairment. Residual valuations for retail leases are based on independent assessments of expected used automobile sale prices at the end of the lease term. Impairment tests are conducted based on these valuations considering the probability of the lessee returning the asset to the Company, re-marketing efforts, insurance coverage and ancillary fees and costs. Valuations for commercial leases are based upon external or internal management appraisals. The Company manages its risk to changes in the residual value of leased vehicles, office and business equipment, and other assets through disciplined residual valuation setting at the inception of a lease, diversification of its leased assets, regular residual asset valuation reviews and monitoring of residual value gains or losses upon the disposition of assets. Retail lease residual value risk is mitigated further by the purchase of residual value insurance coverage and effective end-of-term marketing of off-lease vehicles.

The Company, as lessee, leases certain assets for use in its operations. Leased assets primarily include retail branches, operations centers and other corporate locations, and, to a lesser extent, office and computer equipment. For each lease with an original term greater than 12 months, the Company records a lease liability and a corresponding right of use (“ROU”) asset. The Company accounts for the lease and non-lease components in the majority of its lease contracts as a single lease component, with the determination of the lease liability at lease inception based on the present value of the consideration to be paid under the contract. The discount rate used by the Company is determined at commencement of the lease using a secured rate for a similar term as the period of the lease. The Company’s leases do not include significant variable lease payments.

Certain of the Company’s real estate leases include options to extend. Lease extension options are generally exercisable at market rates. Such option periods do not provide a significant incentive, and their exercise is not reasonably certain. Accordingly, the Company does not recognize payments occurring during option periods in the calculation of its ROU assets and lease liabilities.

Other Real Estate Other real estate owned (“OREO”) is included in other assets, and is property acquired through foreclosure or other proceedings on defaulted loans. OREO is initially recorded at fair value, less estimated selling costs. The fair value of OREO is evaluated regularly and any decreases in value along with holding costs, such as taxes and insurance, are reported in noninterest expense.

Loans Held For Sale

Loans Held For Sale

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

Where an election is made to carry the LHFS at fair value, any change in fair value is recognized in noninterest income. Where an election is made to carry LHFS at lower-of-cost-or-fair value, any further decreases are recognized in noninterest income and increases in fair value above the loan cost basis are not recognized until the loans are sold. Fair value elections are made at the time of origination or purchase based on the Company’s fair value election policy. The Company has elected fair value accounting for substantially all its mortgage loans held for sale (“MLHFS”).

Derivative Financial Instruments

Derivative Financial Instruments

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

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

If a derivative designated as a cash flow hedge is terminated or ceases to be highly effective, the gain or loss in other comprehensive income (loss) is amortized to earnings over the period the forecasted hedged transactions impact earnings. If a hedged forecasted transaction is no longer probable, hedge accounting is ceased and any gain or loss included in other

comprehensive income (loss) is reported in earnings immediately, unless the forecasted transaction is at least reasonably possible of occurring, whereby the amounts remain within other comprehensive income (loss).

Revenue Recognition

Revenue Recognition

In the ordinary course of business, the Company recognizes income derived from various revenue generating activities. Certain revenues are generated from contracts where they are recognized when, or as services or products are transferred to customers for amounts the Company expects to be entitled. Revenue generating activities related to financial assets and liabilities are also recognized; including mortgage servicing fees, loan commitment fees, foreign currency remeasurements, and gains and losses on securities, equity investments and unconsolidated subsidiaries. Certain specific policies include the following:

Credit and Debit Card Revenue Credit and debit card revenue includes interchange from credit and debit cards processed through card association networks, annual fees, and other transaction and account management fees. Interchange rates are generally set by the credit card associations and based on purchase volumes and other factors. The Company records interchange as services are provided. Transaction and account management fees are recognized as services are provided, except for annual fees which are recognized over the applicable period. Costs for rewards programs and certain payments to partners and credit card associations are also recorded within credit and debit card revenue when services are provided. The Company predominately records credit and debit card revenue within the Payment Services line of business.

Corporate Payment Products Revenue Corporate payment products revenue primarily includes interchange from commercial card products processed through card association networks and revenue from proprietary network transactions. The Company records corporate payment products revenue as services are provided. Certain payments to credit card associations and customers are also recorded within corporate payment products revenue as services are provided. Corporate payment products revenue is recorded within the Payment Services line of business.

Merchant Processing Services Merchant processing services revenue consists principally of merchant discount and other transaction and account management fees charged to merchants for the electronic processing of card association network transactions, less interchange paid to the card-issuing bank, card association assessments, and revenue sharing amounts. All of these are recognized at the time the merchant’s services are performed. The Company may enter into revenue sharing agreements with referral partners or in connection with purchases of merchant contracts from sellers. The revenue sharing amounts are determined primarily on sales volume processed or revenue generated for a particular group of merchants. Merchant

processing revenue also includes revenues related to point-of-sale equipment recorded as sales when the equipment is shipped or as earned for equipment rentals. The Company records merchant processing services revenue within the Payment Services line of business.

Trust and Investment Management Fees Trust and investment management fees are recognized over the period in which services are performed and are based on a percentage of the fair value of the assets under management or administration, fixed based on account type, or transaction-based fees. Services provided to clients include trustee, transfer agent, custodian, fiscal agent, escrow, fund accounting and administration services. Services provided to mutual funds may include selling, distribution and marketing services. Trust and investment management fees are predominately recorded within the Wealth Management and Investment Services line of business.

Deposit Service Charges Deposit service charges include service charges on deposit accounts received under depository agreements with customers to provide access to deposited funds, serve as a custodian of funds, and when applicable, pay interest on deposits. Checking or savings accounts may contain fees for various services used on a day to day basis by a customer. Fees are recognized as services are delivered to and consumed by the customer, or as penalty fees are charged. Deposit service charges also include revenue generated from ATM transaction processing and settlement services which is recognized at the time the services are performed. Certain payments to partners and card associations related to ATM processing services are also recorded within deposit service charges as services are provided. Deposit service charges are reported primarily within the Consumer and Business Banking line of business.

Treasury Management Fees Treasury management fees include fees for a broad range of products and services that enables customers to manage their cash more efficiently. These products and services include cash and investment management, receivables management, disbursement services, funds transfer services, and information reporting. Revenue is recognized as products and services are provided to customers. The Company reflects a discount calculated on monthly average collected customer balances. Total treasury management fees are reported primarily within the Corporate and Commercial Banking and Consumer and Business Banking lines of business.

Commercial Products Revenue Commercial products revenue primarily includes revenue related to ancillary services provided to Corporate and Commercial Banking and Consumer and Business Banking customers, including standby letter of credit fees, non-yield related loan fees, capital markets related revenue, sales of direct financing leases, and loan and syndication fees. Sales of direct financing leases are recognized at the point of sale. In addition, the Company may lead or participate with a group of underwriters in raising investment capital on behalf of securities issuers and charge underwriting fees. These fees are recognized at securities issuance. The Company, in its role as lead underwriter, arranges deal structuring and use of outside vendors

for the underwriting group. The Company recognizes only those fees and expenses related to its underwriting commitment.

Mortgage Banking Revenue Mortgage banking revenue includes revenue derived from mortgages originated and subsequently sold, generally with servicing retained. The primary components include: gains and losses on mortgage sales; servicing revenue; changes in fair value for mortgage loans originated with the intent to sell and measured at fair value under the fair value option; changes in fair value for derivative commitments to purchase and originate mortgage loans; changes in the fair value of mortgage servicing rights (“MSRs”); and the impact of risk management activities associated with the mortgage origination pipeline, funded loans and MSRs. Net interest income from mortgage loans is recorded in interest income. Refer to Other Significant Policies in Note 1, as well as Note 9 and Note 21 for a further discussion of MSRs. Mortgage banking revenue is reported within the Consumer and Business Banking line of business.

Investment Products Fees Investment products fees include commissions related to the execution of requested security trades, distribution fees from sale of mutual funds, and investment advisory fees. Commissions and investment advisory fees are recognized as services are delivered to and utilized by the customer. Distribution fees are received over time, are dependent on the consumer maintaining their mutual fund asset position and the value of such position. These revenues are estimated and recognized at the point a significant reversal of revenue becomes remote. Investment products fees are predominately reported within the Wealth Management and Investment Services line of business.

Other Noninterest Income Other noninterest income is primarily related to financial assets including income on unconsolidated subsidiaries and equity method investments, gains on sale of other investments and corporate owned life insurance proceeds. The Company reports other noninterest income across all lines of business.

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets Goodwill is recorded on acquired businesses if the purchase price exceeds the fair value of the net assets acquired. Other intangible assets are recorded at their fair value upon completion of a business acquisition or certain other transactions, and generally represent the value of customer contracts or relationships. Goodwill is not amortized but is subject, at a minimum, to annual tests for impairment at a reporting unit level. In certain situations, an interim impairment test may be required if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Other intangible assets are amortized over their estimated useful lives, using straight-line and accelerated methods and are subject to impairment if events or circumstances indicate a possible inability to realize the carrying amount. Determining the amount of goodwill impairment, if any,

includes assessing the current implied fair value of the reporting unit as if it were being acquired in a business combination and comparing it to the carrying amount of the reporting unit’s goodwill. Determining the amount of other intangible asset impairment, if any, includes assessing the present value of the estimated future cash flows associated with the intangible asset and comparing it to the carrying amount of the asset.

Income Taxes

Income Taxes Deferred taxes are recorded to reflect the tax consequences on future years of differences between the tax basis of assets and liabilities and their financial reporting carrying amounts. The Company uses the deferral method of accounting on investments that generate investment tax credits. Under this method, the investment tax credits are recognized as a reduction to the related asset. For certain investments in qualified affordable housing projects, the Company presents the expense in tax expense rather than noninterest expense.

Mortgage Servicing Rights

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

Pensions

Pensions For purposes of its pension plans, the Company utilizes its fiscal year-end as the measurement date. At the measurement date, plan assets are determined based on fair value, generally representing observable market prices or the net asset value provided by the funds’ trustee or administrator. The actuarial cost method used to compute the pension liabilities and related expense is the projected unit credit method. The projected benefit obligation is principally determined based on the present value of projected benefit distributions at an assumed discount rate. The discount rate utilized is based on the investment yield of high quality corporate bonds available in the marketplace with maturities equal to projected cash flows of future benefit payments as of the measurement date. Periodic pension expense (or income) includes service costs, interest costs based on the assumed discount rate, the expected return on plan assets based on an actuarially derived market-related value and amortization of actuarial gains and losses. Service cost is included in employee benefits expense on the Consolidated Statement of Income, with all other components of periodic pension expense included in other noninterest expense on the Consolidated Statement of Income. Pension accounting reflects the long-term nature of benefit obligations and the investment horizon of plan assets, and can have the effect of reducing earnings volatility related to short-term changes in interest rates and market valuations. Actuarial gains and losses include the impact of plan amendments and various unrecognized gains and losses which are deferred and amortized over the future service periods of active employees. The market-related value utilized to determine the expected return on

plan assets is based on fair value adjusted for the difference between expected returns and actual performance of plan assets. The unrealized difference between actual experience and expected returns is included in expense over a period of approximately fifteen years. The overfunded or underfunded status of the plans is recorded as an asset or liability on the Consolidated Balance Sheet, with changes in that status recognized through other comprehensive income (loss).

Premises and Equipment

Premises and Equipment Premises and equipment are stated at cost less accumulated depreciation and depreciated primarily on a straight-line basis over the estimated life of the assets. Estimated useful lives range up to 40 years for newly constructed buildings and from 3 to 25 years for furniture and equipment.

The Company, as lessee, records an ROU asset for each lease with an original term greater than 12 months. ROU assets are included in premises and equipment, with the corresponding lease liabilities included in long-term debt and other liabilities.

Stock-Based Compensation

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

Per Share Calculations

Per Share Calculations Earnings per common share is calculated using the two-class method under which earnings are allocated to common shareholders and holders of participating securities. Unvested stock-based compensation awards that contain nonforfeitable rights to dividends or dividend equivalents are considered participating securities under the two-class method. Net income applicable to U.S. Bancorp common shareholders is then divided by the weighted-average number of common shares outstanding to determine earnings per common share. Diluted earnings per common share is calculated by adjusting income and outstanding shares, assuming conversion of all potentially dilutive securities.

Accounting Changes

Accounting for Leases Effective January 1, 2019, the Company adopted accounting guidance, issued by the Financial Accounting

Standards Board (“FASB”) in February 2016, related to the accounting for leases. This guidance requires lessees to recognize all leases on the Consolidated Balance Sheet as lease assets and lease liabilities based primarily on the present value of future lease payments. The Company recognized approximately $1.3 billion of lease assets and related liabilities on its Consolidated Balance Sheet at the adoption date. In addition, lessors are now required to consider lease residual exposures of sales-type and direct financing leases when determining the allowance for credit losses. The adoption of this guidance was not material to the Company’s Consolidated Statement of Income.

Financial Instruments—Credit Losses Effective January 1, 2020, the Company adopted accounting guidance, issued by the FASB in June 2016, related to the impairment of financial instruments. This guidance changes impairment recognition to a model that is based on expected losses rather than incurred losses, which is intended to result in more timely recognition of credit losses. This guidance is also intended to reduce the complexity of accounting guidance by decreasing the number of credit impairment models that entities use to account for debt instruments. In addition, the guidance requires additional credit quality disclosures for loans. Upon adoption, the Company increased its allowance for credit losses by approximately $1.5 billion and reduced retained earnings net of deferred tax balances.

When determining expected losses, the Company uses multiple economic scenarios and a three-year reasonable and supportable forecast period, which incorporates historical loss experience in years two and three. After the forecast period, the Company fully reverts to long-term historical loss experience, adjusted for prepayments, to estimate losses over the remaining life.

The increase in the allowance was primarily related to the commercial, credit card, installment and other retail loan portfolios where the allowance for loan losses had not previously considered the full term of the loans.

The adoption of this guidance did not have a material impact on the Company’s available-for-sale securities as most of this portfolio consists of U.S. Treasury and residential agency mortgage-backed securities that inherently have an immaterial risk of loss.

Accounting for Transfers and Servicing of Financial Assets

In accordance with the accounting guidance for asset transfers, the Company considers any ongoing involvement with transferred assets in determining whether the assets can be derecognized from the balance sheet.For loans sold under participation agreements, the Company also considers whether the terms of the loan participation agreement meet the accounting definition of a participating interest. With the exception of servicing and certain performance-based guarantees, the Company’s continuing involvement with financial assets sold is minimal and generally limited to market customary representation and warranty clauses. Any gain or loss on sale depends on the previous carrying amount of the transferred financial assets, the consideration received, and any liabilities incurred in exchange for the transferred assets. Upon transfer, any servicing assets and other interests that continue to be held by the Company are initially recognized at fair value.

Variable Interest Entities

The Company is not required to consolidate VIEs in which it has concluded it does not have a controlling financial interest, and thus is not the primary beneficiary. In such cases, the Company does not have both the power to direct the entities’ most significant activities and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs.

The Company’s investments in these unconsolidated VIEs are carried in other assets on the Consolidated Balance Sheet. The Company’s unfunded capital and other commitments related to these unconsolidated VIEs are generally carried in other liabilities on the Consolidated Balance Sheet. The Company’s maximum exposure to loss from these unconsolidated VIEs include the investment recorded on the Company’s Consolidated Balance Sheet, net of unfunded capital commitments, and previously recorded tax credits which remain subject to recapture

by taxing authorities based on compliance features required to be met at the project level. While the Company believes potential losses from these investments are remote, the maximum exposure was determined by assuming a scenario where the community-based business and housing projects completely fail and do not meet certain government compliance requirements resulting in recapture of the related tax credits.The Company is required to consolidate VIEs in which it has concluded it has a controlling financial interest.The majority of the assets of these consolidated VIEs are reported in other assets, and the liabilities are reported in long-term debt and other liabilities. The assets of a particular VIE are the primary source of funds to settle its obligations. The creditors of the VIEs do not have recourse to the general credit of the Company. The Company’s exposure to the consolidated VIEs is generally limited to the carrying value of its variable interests plus any related tax credits previously recognized or transferred to others with a guarantee.

Netting Arrangements for Certain Financial Instruments

The Company’s derivative portfolio consists of bilateral over-the-counter trades, certain interest rate derivatives and credit contracts required to be centrally cleared through clearinghouses per current regulations, and exchange-traded positions which may include U.S. Treasury and Eurodollar futures or options on U.S. Treasury futures. The Company’s derivative contracts typically include offsetting rights (referred to as netting arrangements), and depending on expected volume, credit risk, and counterparty preference, collateral maintenance may be required. For all derivatives under collateral support arrangements, fair value is determined daily and, depending on the collateral maintenance requirements, the Company and a counterparty may receive or deliver collateral, based upon the net fair value of all derivative positions between the Company and the counterparty. Collateral is typically cash, but securities may be allowed under collateral arrangements with certain counterparties. Receivables and payables related to cash collateral are included in other assets and other liabilities on the Consolidated Balance Sheet, along with the related derivative asset and liability fair values. Any securities pledged to counterparties as collateral remain on the Consolidated Balance Sheet. Securities received from counterparties as collateral are not recognized on the Consolidated Balance Sheet, unless the counterparty defaults. In general, securities used as collateral can be sold, repledged or otherwise used by the party in possession. No restrictions exist on the use of cash collateral by either party. Refer to Note 19 for further discussion of the Company’s derivatives, including collateral arrangements.As part of the Company’s treasury and broker-dealer operations, the Company executes transactions that are treated as securities sold under agreements to repurchase or securities purchased under agreements to resell, both of which are

accounted for as collateralized financings. Securities sold under agreements to repurchase include repurchase agreements and securities loaned transactions. Securities purchased under agreements to resell include reverse repurchase agreements and securities borrowed transactions. For securities sold under agreements to repurchase, the Company records a liability for the cash received, which is included in short-term borrowings on the Consolidated Balance Sheet. For securities purchased under agreements to resell, the Company records a receivable for the cash paid, which is included in other assets on the Consolidated Balance Sheet.

Securities transferred to counterparties under repurchase agreements and securities loaned transactions continue to be recognized on the Consolidated Balance Sheet, are measured at fair value, and are included in investment securities or other assets. Securities received from counterparties under reverse repurchase agreements and securities borrowed transactions are not recognized on the Consolidated Balance Sheet unless the counterparty defaults. The securities transferred under repurchase and reverse repurchase transactions typically are U.S. Treasury and agency securities, residential agency mortgage-backed securities or corporate debt securities. The securities loaned or borrowed typically are corporate debt securities traded by the Company’s broker-dealer subsidiary. In general, the securities transferred can be sold, repledged or otherwise used by the party in possession. No restrictions exist on the use of cash collateral by either party. Repurchase/reverse repurchase and securities loaned/borrowed transactions expose the Company to counterparty risk. The Company manages this risk by performing assessments, independent of business line managers, and establishing concentration limits on each counterparty. Additionally, these transactions include collateral arrangements that require the fair values of the underlying securities to be determined daily, resulting in cash being obtained or refunded to counterparties to maintain specified collateral levels.

The Company executes its derivative, repurchase/reverse repurchase and securities loaned/borrowed transactions under the respective industry standard agreements. These agreements include master netting arrangements that allow for multiple contracts executed with the same counterparty to be viewed as a single arrangement. This allows for net settlement of a single amount on a daily basis. In the event of default, the master netting arrangement provides for close-out netting, which allows all of these positions with the defaulting counterparty to be terminated and net settled with a single payment amount.

The Company has elected to offset the assets and liabilities under netting arrangements for the balance sheet presentation of the majority of its derivative counterparties. The netting occurs at the counterparty level, and includes all assets and liabilities related to the derivative contracts, including those associated with cash collateral received or delivered. The Company has not elected to offset the assets and liabilities under netting arrangements for the balance sheet presentation of repurchase/reverse repurchase and securities loaned/borrowed transactions.

Fair Values of Assets and Liabilities

The Company uses fair value measurements for the initial recording of certain assets and liabilities, periodic remeasurement of certain assets and liabilities, and disclosures. Derivatives, trading and available-for-sale investment securities, MSRs and substantially all MLHFS are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as loans held for sale, loans held for investment and certain other assets. These nonrecurring fair value adjustments typically involve application of lower-of-cost-or-fair value accounting or impairment write-downs of individual assets.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value measurement reflects all of the assumptions that market participants would use in pricing the asset or liability, including assumptions about the risk inherent in a particular valuation technique, the effect of a restriction on the sale or use of an asset and the risk of nonperformance.

The Company groups its assets and liabilities measured at fair value into a three-level hierarchy for valuation techniques used to measure financial assets and financial liabilities at fair value. This hierarchy is based on whether the valuation inputs are observable or unobservable. These levels are:

– Level 1—Quoted prices in active markets for identical assets or liabilities. Level 1 includes U.S. Treasury securities, as well as exchange-traded instruments.

– Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for

substantially the full term of the assets or liabilities. Level 2 includes debt securities that are traded less frequently than exchange-traded instruments and which are typically valued using third-party pricing services; derivative contracts and other assets and liabilities, including securities, whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data; and MLHFS whose values are determined using quoted prices for similar assets or pricing models with inputs that are observable in the market or can be corroborated by observable market data.

– Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category includes MSRs and certain derivative contracts.

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Income Taxes - Reconciliation of Expected Income Tax Expense at Federal Statutory Rate of 21 Percent and 35 Percent to Company's Applicable Income Tax Expense (Parenthetical) (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Effective Income Tax Rate Reconciliation, Amount [Abstract]
Corporate tax	21.00%	21.00%	35.00%
Net income tax benefit			$ (910)

XML

Guarantees and Contingent Liabilities

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Guarantees and Contingent Liabilities

  NOTE 22   Guarantees and Contingent Liabilities

Visa Restructuring and Card Association Litigation The Company’s payment services business issues credit and debit cards and acquires credit and debit card transactions through the Visa U.S.A. Inc. card association or its affiliates (collectively “Visa”). In 2007, Visa completed a restructuring and issued shares of Visa Inc. common stock to its financial institution members in contemplation of its initial public offering (“IPO”) completed in the first quarter of 2008 (the “Visa Reorganization”). As a part of the Visa Reorganization, the Company received its proportionate number of shares of Visa Inc. common stock, which were subsequently converted to Class B shares of Visa Inc. (“Class B shares”).

Visa U.S.A. Inc. (“Visa U.S.A.”) and MasterCard International (collectively, the “Card Associations”) are defendants in antitrust lawsuits challenging the practices of the Card Associations (the “Visa Litigation”). Visa U.S.A. member banks have a contingent obligation to indemnify Visa Inc. under the Visa U.S.A. bylaws (which were modified at the time of the restructuring in October 2007) for potential losses arising from the Visa Litigation. The indemnification by the Visa U.S.A. member banks has no specific maximum amount. Using proceeds from its IPO and through reductions to the conversion ratio applicable to the Class B shares held by Visa U.S.A. member banks, Visa Inc. has funded an escrow account for the benefit of member financial institutions to fund their indemnification obligations associated with the Visa Litigation. The receivable related to the escrow account is classified in other liabilities as a direct offset to the related Visa Litigation contingent liability.

In October 2012, Visa signed a settlement agreement to resolve class action claims associated with the multi-district interchange litigation pending in the United States District Court for the Eastern District of New York (the “Multi-District Litigation”). The U.S. Court of Appeals for the Second Circuit reversed the approval of that settlement and remanded the matter to the district court. In September 2018, Visa signed a new settlement agreement, superseding the original settlement agreement, to resolve class action claims associated with the Multi-District Litigation. The new settlement is still subject to court approval.

Commitments to Extend Credit Commitments to extend credit are legally binding and generally have fixed expiration dates or other termination clauses. The contractual amount represents the Company’s exposure to credit loss, in the event of default by the borrower. The Company manages this credit risk by using the same credit policies it applies to loans. Collateral is obtained to secure commitments based on management’s credit assessment of the borrower. The collateral may include marketable securities, receivables, inventory, equipment and real estate. Since the Company expects many of the commitments to expire without being drawn, total commitment amounts do not necessarily represent the Company’s future liquidity requirements. In addition, the commitments include consumer credit lines that are cancelable upon notification to the consumer.

The contract or notional amounts of unfunded commitments to extend credit at December 31, 2019, excluding those commitments considered derivatives, were as follows:

	Term
(Dollars in Millions)	Less Than One Year		Greater Than One Year		Total
Commercial and commercial real estate loans	$	31,235	$	108,303	$	139,538
Corporate and purchasing card loans(a)		29,296		–		29,296
Residential mortgages		416		1		417
Retail credit card loans(a)		111,773		–		111,773
Other retail loans		12,614		24,183		36,797
Other		6,325		–		6,325

(a) Primarily cancelable at the Company’s discretion.

Other Guarantees and Contingent Liabilities

The following table is a summary of other guarantees and contingent liabilities of the Company at December 31, 2019:

(Dollars in Millions)	Collateral Held		Carrying Amount		Maximum Potential Future Payments
Standby letters of credit	$	–	$	48	$	10,258
Third-party borrowing arrangements		–		–		7
Securities lending indemnifications		4,564		–		4,468
Asset sales		–		68		5,069
Merchant processing		589		61		108,875
Tender option bond program guarantee		2,994		–		2,725
Minimum revenue guarantees		–		–		3
Other		–		71		1,461

Letters of Credit Standby letters of credit are commitments the Company issues to guarantee the performance of a customer to a third party. The guarantees frequently support public and private borrowing arrangements, including commercial paper issuances, bond financings and other similar transactions. The Company also issues and confirms commercial letters of credit on behalf of customers to ensure payment or collection in connection with trade transactions. In the event of a customer’s or counterparty’s nonperformance, the Company’s credit loss exposure is similar to that in any extension of credit, up to the letter’s contractual amount. Management assesses the borrower’s credit to determine the necessary collateral, which may include marketable securities, receivables, inventory, equipment and real estate. Since the conditions requiring the Company to fund letters of credit may not occur, the Company

expects its liquidity requirements to be less than the total outstanding commitments. The maximum potential future payments guaranteed by the Company under standby letter of credit arrangements at December 31, 2019, were approximately $10.3 billion with a weighted-average term of approximately 21 months. The estimated fair value of standby letters of credit was approximately $48 million at December 31, 2019.

The contract or notional amount of letters of credit at December 31, 2019, were as follows:

	Term
(Dollars in Millions)	Less Than One Year		Greater Than One Year		Total
Standby	$	4,676	$	5,582	$	10,258
Commercial		339		28		367

Guarantees Guarantees are contingent commitments issued by the Company to customers or other third parties. The Company’s guarantees primarily include parent guarantees related to subsidiaries’ third-party borrowing arrangements; third-party performance guarantees inherent in the Company’s business operations, such as indemnified securities lending programs and merchant charge-back guarantees; and indemnification or buy-back provisions related to certain asset sales. For certain guarantees, the Company has recorded a liability related to the potential obligation, or has access to collateral to support the guarantee or through the exercise of other recourse provisions can offset some or all of the maximum potential future payments made under these guarantees.

Third-Party Borrowing Arrangements The Company provides guarantees to third parties as a part of certain subsidiaries’ borrowing arrangements. The maximum potential future payments guaranteed by the Company under these arrangements were approximately $7 million at December 31, 2019.

Commitments from Securities Lending The Company participates in securities lending activities by acting as the customer’s agent involving the loan of securities. The Company indemnifies customers for the difference between the fair value of the securities lent and the fair value of the collateral received. Cash collateralizes these transactions. The maximum potential future payments guaranteed by the Company under these arrangements were approximately $4.5 billion at December 31, 2019, and represent the fair value of the securities lent to third parties. At December 31, 2019, the Company held $4.6 billion of cash as collateral for these arrangements.

Asset Sales The Company has provided guarantees to certain third parties in connection with the sale or syndication of certain assets, primarily loan portfolios and tax-advantaged investments. These guarantees are generally in the form of asset buy-back or make-whole provisions that are triggered upon a credit event or a change in the tax-qualifying status of the related projects, as applicable, and remain in effect until the loans are collected or final tax credits are realized, respectively. The maximum potential

future payments guaranteed by the Company under these arrangements were approximately $5.1 billion at December 31, 2019, and represented the proceeds received from the buyer or the guaranteed portion in these transactions where the buy-back or make-whole provisions have not yet expired. At December 31, 2019, the Company had reserved $68 million for potential losses related to the sale or syndication of tax-advantaged investments.

The maximum potential future payments do not include loan sales where the Company provides standard representation and warranties to the buyer against losses related to loan underwriting documentation defects that may have existed at the time of sale that generally are identified after the occurrence of a triggering event such as delinquency. For these types of loan sales, the maximum potential future payments is generally the unpaid principal balance of loans sold measured at the end of the current reporting period. Actual losses will be significantly less than the maximum exposure, as only a fraction of loans sold will have a representation and warranty breach, and any losses on repurchase would generally be mitigated by any collateral held against the loans.

The Company regularly sells loans to GSEs as part of its mortgage banking activities. The Company provides customary representations and warranties to GSEs in conjunction with these sales. These representations and warranties generally require the Company to repurchase assets if it is subsequently determined that a loan did not meet specified criteria, such as a documentation deficiency or rescission of mortgage insurance. If the Company is unable to cure or refute a repurchase request, the Company is generally obligated to repurchase the loan or otherwise reimburse the GSE for losses. At December 31, 2019, the Company had reserved $9 million for potential losses from representation and warranty obligations, compared with $10 million at December 31, 2018. The Company’s reserve reflects management’s best estimate of losses for representation and warranty obligations. The Company’s repurchase reserve is modeled at the loan level, taking into consideration the individual credit quality and borrower activity that has transpired since origination. The model applies credit quality and economic risk factors to derive a probability of default and potential repurchase that are based on the Company’s historical loss experience, and estimates loss severity based on expected collateral value. The Company also considers qualitative factors that may result in anticipated losses differing from historical loss trends.

As of December 31, 2019 and 2018, the Company had $10 million and $15 million, respectively, of unresolved representation and warranty claims from GSEs. The Company does not have a significant amount of unresolved claims from investors other than GSEs.

Merchant Processing The Company, through its subsidiaries, provides merchant processing services. Under the rules of credit card associations, a merchant processor retains a contingent liability for credit card transactions processed. This contingent liability arises in the event of a billing dispute between the merchant and a cardholder that is ultimately resolved in the cardholder’s favor. In this situation, the transaction is “charged-

back” to the merchant and the disputed amount is credited or otherwise refunded to the cardholder. If the Company is unable to collect this amount from the merchant, it bears the loss for the amount of the refund paid to the cardholder.

A cardholder, through its issuing bank, generally has until the later of up to four months after the date the transaction is processed or the receipt of the product or service to present a charge-back to the Company as the merchant processor. The absolute maximum potential liability is estimated to be the total volume of credit card transactions that meet the associations’ requirements to be valid charge-back transactions at any given time. Management estimates that the maximum potential exposure for charge-backs would approximate the total amount of merchant transactions processed through the credit card associations for the last four months. For the last four months of 2019 this amount totaled approximately $108.9 billion. In most cases, this contingent liability is unlikely to arise, as most products and services are delivered when purchased and amounts are refunded when items are returned to merchants. However, where the product or service has been purchased but is not provided until a future date (“future delivery”), the potential for this contingent liability increases. To mitigate this risk, the Company may require the merchant to make an escrow deposit, place maximum volume limitations on future delivery transactions processed by the merchant at any point in time, or require various credit enhancements (including letters of credit and bank guarantees). Also, merchant processing contracts may include event triggers to provide the Company more financial and operational control in the event of financial deterioration of the merchant.

The Company currently processes card transactions in the United States, Canada, Europe and Mexico through wholly-owned subsidiaries and a network of other financial institutions. In the event a merchant was unable to fulfill product or services subject to future delivery, such as airline tickets, the Company could become financially liable for refunding the purchase price of such products or services purchased through the credit card associations under the charge-back provisions. Charge-back risk related to these merchants is evaluated in a manner similar to credit risk assessments and, as such, merchant processing contracts contain various provisions to protect the Company in the event of default. At December 31, 2019, the value of airline tickets purchased to be delivered at a future date through card transactions processed by the Company was $8.3 billion. The Company held collateral of $496 million in escrow deposits, letters of credit and indemnities from financial institutions, and liens on various assets. In addition to specific collateral or other credit enhancements, the Company maintains a liability for its implied guarantees associated with future delivery. At December 31, 2019, the liability was $44 million primarily related to these airline processing arrangements.

In the normal course of business, the Company has unresolved charge-backs. The Company assesses the likelihood of its potential liability based on the extent and nature of unresolved charge-backs and its historical loss experience. At

December 31, 2019, the Company held $89 million of merchant escrow deposits as collateral and had a recorded liability for potential losses of $17 million.

Tender Option Bond Program Guarantee As discussed in Note 7, the Company sponsors a municipal bond securities tender option bond program and consolidates the program’s entities on its Consolidated Balance Sheet. The Company provides financial performance guarantees related to the program’s entities. At December 31, 2019, the Company guaranteed $2.7 billion of borrowings of the program’s entities, included on the Consolidated Balance Sheet in short-term borrowings. The Company also included on its Consolidated Balance Sheet the related $3.0 billion of available-for-sale investment securities serving as collateral for this arrangement.

Minimum Revenue Guarantees In the normal course of business, the Company may enter into revenue share agreements with third-party business partners who generate customer referrals or provide marketing or other services related to the generation of revenue. In certain of these agreements, the Company may guarantee that a minimum amount of revenue share payments will be made to the third party over a specified period of time. At December 31, 2019, the maximum potential future payments required to be made by the Company under these agreements were $3 million.

Other Guarantees and Commitments As of December 31, 2019, the Company sponsored, and owned 100 percent of the common equity of, USB Capital IX, a wholly-owned unconsolidated trust, formed for the purpose of issuing redeemable Income Trust Securities (“ITS”) to third-party investors, originally investing the proceeds in junior subordinated debt securities (“Debentures”) issued by the Company and entering into stock purchase contracts to purchase the Company’s preferred stock in the future. As of December 31, 2019, all of the Debentures issued by the Company have either matured or been retired. Total assets of USB Capital IX were $682 million at December 31, 2019, consisting primarily of the Company’s Series A Preferred Stock. The Company’s obligations under the transaction documents, taken together, have the effect of providing a full and unconditional guarantee by the Company, on a junior subordinated basis, of the payment obligations of the trust to third-party investors totaling $681 million at December 31, 2019.

The Company has also made other financial performance guarantees and commitments primarily related to the operations of its subsidiaries. At December 31, 2019, the maximum potential future payments guaranteed or committed by the Company under these arrangements were approximately $781 million.

Litigation and Regulatory Matters

The Company is subject to various litigation and regulatory matters that arise in the ordinary course of its business. The Company establishes reserves for such matters when potential losses become probable and can be reasonably estimated. The

Company believes the ultimate resolution of existing legal and regulatory matters will not have a material adverse effect on the financial condition, results of operations or cash flows of the Company. However, in light of the uncertainties inherent in these matters, it is possible that the ultimate resolution of one or more of these matters may have a material adverse effect on the Company’s results from operations for a particular period, and future changes in circumstances or additional information could result in additional accruals or resolution in excess of established accruals, which could adversely affect the Company’s results from operations, potentially materially.

Residential Mortgage-Backed Securities Litigation Starting in 2011, the Company and other large financial institutions have been sued in their capacity as trustee for residential mortgage–backed securities trusts. In the lawsuits brought against the Company, the investors allege that the Company’s banking subsidiary, U.S. Bank National Association (“U.S. Bank”), as trustee caused them to incur substantial losses by failing to enforce loan repurchase obligations and failing to abide by appropriate standards of care after events of default allegedly occurred. The plaintiffs in these matters seek monetary damages in unspecified amounts and most also seek equitable relief.

Regulatory Matters The Company is continually subject to examinations, inquiries and investigations in areas of heightened regulatory scrutiny, such as compliance, risk management, third-party risk management and consumer protection. For example, the Company is currently subject to examinations, inquiries and investigations by government agencies and bank regulators concerning mortgage-related practices, including those related to lender-placed insurance, and notices and filings in bankruptcy cases. The Company is cooperating fully with all pending examinations, inquiries and investigations, any of which could lead to administrative or legal proceedings or settlements. Remedies in these proceedings or settlements may include fines, penalties, restitution or alterations in the Company’s business practices (which may increase the Company’s operating expenses and decrease its revenue).

In February 2018, the Company entered into a deferred prosecution agreement (the “DPA”) with the United States Attorney’s Office in Manhattan that resolved its investigation of the Company concerning a legacy banking relationship between U.S. Bank and payday lending businesses associated with a former customer and U.S. Bank’s legacy Bank Secrecy Act/anti-money laundering compliance program. The DPA deferred prosecution for a period of two years, subject to the Company’s compliance with its terms, which included ongoing efforts to implement and maintain an adequate Bank Secrecy Act/anti-money laundering compliance program. The United States Attorney’s Office filed a motion to dismiss all charges under the DPA with the United States District Court for the Southern District of New York and that motion was granted by the court on February 13, 2020.

In related actions taken in February 2018, the Company and one of its affiliates entered into a regulatory settlement with the

Board of Governors of the Federal Reserve System (the “Federal Reserve”) and U.S. Bank entered into a regulatory settlement with the Financial Crimes Enforcement Network (“FinCEN”). In December 2019, the Federal Reserve terminated the order that it had entered into with the Company and its affiliate and thereby terminated the ongoing obligations under that settlement. Additionally, U.S. Bank’s ongoing obligations under its settlement agreement with FinCEN will expire on February 22, 2020, in accordance with the terms of that agreement.

Outlook Due to their complex nature, it can be years before litigation and regulatory matters are resolved. The Company may be unable to develop an estimate or range of loss where matters are in early stages, there are significant factual or legal issues to

be resolved, damages are unspecified or uncertain, or there is uncertainty as to a litigation class being certified or the outcome of pending motions, appeals or proceedings. For those litigation and regulatory matters where the Company has information to develop an estimate or range of loss, the Company believes the upper end of the range of reasonably possible losses in aggregate, in excess of any reserves established for matters where a loss is considered probable, will not be material to its financial condition, results of operations or cash flows. The Company’s estimates are subject to significant judgment and uncertainties, and the matters underlying the estimates will change from time to time. Actual results may vary significantly from the current estimates.

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Employee Benefits - Pension Plans with Benefit Obligations in Excess of Plan Assets (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Pension Plans with Projected Benefit Obligations in Excess of Plan Assets
Projected benefit obligation	$ 6,829	$ 5,507
Fair value of plan assets	5,838	4,936
Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets
Accumulated benefit obligation	$ 553	$ 467

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Loans and Allowance for Credit Losses

12 Months Ended

Dec. 31, 2019

Receivables [Abstract]

Loans and Allowance for Credit Losses

  NOTE 5   Loans and Allowance for Credit Losses

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

(Dollars in Millions)	2019		2018
Commercial
Commercial	$	98,168	$	96,849
Lease financing		5,695		5,595
Total commercial		103,863		102,444
Commercial Real Estate
Commercial mortgages		29,404		28,596
Construction and development		10,342		10,943
Total commercial real estate		39,746		39,539
Residential Mortgages
Residential mortgages		59,865		53,034
Home equity loans, first liens		10,721		12,000
Total residential mortgages		70,586		65,034
Credit Card		24,789		23,363
Other Retail
Retail leasing		8,490		8,546
Home equity and second mortgages		15,036		16,122
Revolving credit		2,899		3,088
Installment		11,038		9,676
Automobile		19,435		18,719
Student		220		279
Total other retail		57,118		56,430
Total loans	$	296,102	$	286,810

The Company had loans of $96.2 billion at December 31, 2019, and $88.7 billion at December 31, 2018, pledged at the Federal Home Loan Bank, and loans of $76.3 billion at December 31, 2019, and $70.1 billion at December 31, 2018, pledged at the Federal Reserve Bank.

The Company offers a broad array of lending products to consumer and commercial customers, in various industries, across several geographical locations, predominately in the states in which it has Consumer and Business Banking offices. Collateral for commercial and commercial real estate loans may include marketable securities, accounts receivable, inventory, equipment, real estate, or the related property.

Originated loans are reported at the principal amount outstanding, net of unearned interest and deferred fees and

costs, and any partial charge-offs recorded. Net unearned interest and deferred fees and costs amounted to $781 million at December 31, 2019 and $872 million at December 31, 2018. All purchased loans are recorded at fair value at the date of purchase. The Company evaluates purchased loans for impairment at the date of purchase in accordance with applicable authoritative accounting guidance. Purchased loans with evidence of credit deterioration since origination for which it is probable that all contractually required payments will not be collected are considered “purchased impaired loans.” All other purchased loans are considered “purchased nonimpaired loans.”

Allowance for Credit Losses The allowance for credit losses is established for probable and estimable losses incurred in the Company’s loan and lease portfolio, including unfunded credit

commitments. The allowance for credit losses is increased through provisions charged to earnings and reduced by net charge-offs.

Activity in the allowance for credit losses by portfolio class was as follows:

(Dollars in Millions)	Commercial			Commercial Real Estate			Residential Mortgages			Credit Card			Other Retail			Covered Loans			Total Loans
Balance at December 31, 2018
Balance at beginning of period	$	1,454		$	800		$	455		$	1,102		$	630		$	–		$	4,441
Add
Provision for credit losses		315			13			(19	)		919			276			–			1,504
Deduct
Loans charged-off		399			21			34			1,028			385			–			1,867
Less recoveries of loans charged-off		(114	)		(7	)		(31	)		(135	)		(126	)		–			(413	)
Net loans charged-off		285			14			3			893			259			–			1,454
Balance at December 31, 2019	$	1,484		$	799		$	433		$	1,128		$	647		$	–		$	4,491
Balance at December 31, 2017
Balance at beginning of period	$	1,372		$	831		$	449		$	1,056		$	678		$	31		$	4,417
Add
Provision for credit losses		333			(50	)		23			892			211			(30	)		1,379
Deduct
Loans charged-off		350			9			48			970			383			–			1,760
Less recoveries of loans charged-off		(99	)		(28	)		(31	)		(124	)		(124	)		–			(406	)
Net loans charged-off		251			(19	)		17			846			259			–			1,354
Other changes(a)		–			–			–			–			–			(1	)		(1	)
Balance at December 31, 2018	$	1,454		$	800		$	455		$	1,102		$	630		$	–		$	4,441
Balance at December 31, 2016
Balance at beginning of period	$	1,450		$	812		$	510		$	934		$	617		$	34		$	4,357
Add
Provision for credit losses		186			19			(24	)		908			304			(3	)		1,390
Deduct
Loans charged-off		414			30			65			887			355			–			1,751
Less recoveries of loans charged-off		(150	)		(30	)		(28	)		(101	)		(112	)		–			(421	)
Net loans charged-off		264			–			37			786			243			–			1,330
Balance at December 31, 2017	$	1,372		$	831		$	449		$	1,056		$	678		$	31		$	4,417

(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. 

Additional detail of the allowance for credit losses by portfolio class was as follows:

(Dollars in Millions)	Commercial		Commercial Real Estate		Residential Mortgages		Credit Card		Other Retail		Total Loans
Allowance Balance at December 31, 2019 Related to
Loans individually evaluated for impairment(a)	$	16	$	3	$	–	$	–	$	–	$	19
TDRs collectively evaluated for impairment		20		3		109		81		10		223
Other loans collectively evaluated for impairment		1,448		793		309		1,047		637		4,234
Loans acquired with deteriorated credit quality		–		–		15		–		–		15
Total allowance for credit losses	$	1,484	$	799	$	433	$	1,128	$	647	$	4,491
Allowance Balance at December 31, 2018 Related to
Loans individually evaluated for impairment(a)	$	16	$	8	$	–	$	–	$	–	$	24
TDRs collectively evaluated for impairment		15		3		126		69		12		225
Other loans collectively evaluated for impairment		1,423		788		314		1,033		618		4,176
Loans acquired with deteriorated credit quality		–		1		15		–		–		16
Total allowance for credit losses	$	1,454	$	800	$	455	$	1,102	$	630	$	4,441

(a) Represents the allowance for credit losses related to loans greater than $5 million classified as nonperforming or TDRs.

Additional detail of loan balances by portfolio class was as follows:

(Dollars in Millions)	Commercial		Commercial Real Estate		Residential Mortgages		Credit Card		Other Retail		Total Loans
December 31, 2019
Loans individually evaluated for impairment(a)	$	253	$	61	$	–	$	–	$	–	$	314
TDRs collectively evaluated for impairment		163		138		3,044		263		185		3,793
Other loans collectively evaluated for impairment		103,447		39,513		67,315		24,526		56,933		291,734
Loans acquired with deteriorated credit quality		–		34		227		–		–		261
Total loans	$	103,863	$	39,746	$	70,586	$	24,789	$	57,118	$	296,102
December 31, 2018
Loans individually evaluated for impairment(a)	$	262	$	86	$	–	$	–	$	–	$	348
TDRs collectively evaluated for impairment		151		129		3,252		245		183		3,960
Other loans collectively evaluated for impairment		102,031		39,297		61,465		23,118		56,247		282,158
Loans acquired with deteriorated credit quality		–		27		317		–		–		344
Total loans	$	102,444	$	39,539	$	65,034	$	23,363	$	56,430	$	286,810

(a) Represents loans greater than $5 million classified as nonperforming or TDRs.

Credit Quality The credit quality of the Company’s loan portfolios is assessed as a function of net credit losses, levels of nonperforming assets and delinquencies, and credit qualityratings as defined by the Company. These credit quality ratings are an important part of the Company’s overall credit risk management and evaluation of its allowance for credit losses.

The following table provides a summary of loans by portfolio class, including the delinquency status of those that continue to accrue interest, and those that are nonperforming:

	Accruing
(Dollars in Millions)	Current		30-89 Days Past Due		90 Days or More Past Due		Nonperforming		Total
December 31, 2019
Commercial	$	103,273	$	307	$	79	$	204	$	103,863
Commercial real estate		39,627		34		3		82		39,746
Residential mortgages(a)		70,071		154		120		241		70,586
Credit card		24,162		321		306		–		24,789
Other retail		56,463		393		97		165		57,118
Total loans	$	293,596	$	1,209	$	605	$	692	$	296,102
December 31, 2018
Commercial	$	101,844	$	322	$	69	$	209	$	102,444
Commercial real estate		39,354		70		–		115		39,539
Residential mortgages(a)		64,443		181		114		296		65,034
Credit card		22,746		324		293		–		23,363
Other retail		55,722		403		108		197		56,430
Total loans	$	284,109	$	1,300	$	584	$	817	$	286,810

(a) At December 31, 2019, $428 million of loans 30–89 days past due and $1.7 billion of loans 90 days or more past due purchased from Government National Mortgage Association (“GNMA”) mortgage pools whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs, were classified as current, compared with $430 million and $1.7 billion at December 31, 2018, respectively.

At December 31, 2019, total nonperforming assets held by the Company were $829 million, compared with $989 million at December 31, 2018. Total nonperforming assets included $692 million of nonperforming loans, $78 million of OREO and $59 million of other nonperforming assets owned by the Company at December 31, 2019, compared with $817 million, $111 million and $61 million, respectively, at December 31, 2018.

At December 31, 2019, the amount of foreclosed residential real estate held by the Company, and included in OREO, was $74 million, compared with $106 million at December 31, 2018. These amounts exclude $155 million and $235 million at December 31, 2019 and 2018, respectively, of foreclosed

residential real estate related to mortgage loans whose payments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. In addition, the amount of residential mortgage loans secured by residential real estate in the process of foreclosure was $1.5 billion at December 31, 2019 and 2018, of which $1.2 billion at December 31, 2019 and 2018, related to loans purchased from Government National Mortgage Association (“GNMA”) mortgage pools whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs.

The following table provides a summary of loans by portfolio class and the Company’s internal credit quality rating:

			Criticized
(Dollars in Millions)	Pass		Special Mention		Classified(a)		Total Criticized		Total
December 31, 2019
Commercial	$	101,850	$	1,147	$	866	$	2,013	$	103,863
Commercial real estate		38,872		484		390		874		39,746
Residential mortgages(b)		70,174		2		410		412		70,586
Credit card		24,483		–		306		306		24,789
Other retail		56,825		10		283		293		57,118
Total loans	$	292,204	$	1,643	$	2,255	$	3,898	$	296,102
Total outstanding commitments	$	619,224	$	2,451	$	2,873	$	5,324	$	624,548
December 31, 2018
Commercial	$	100,014	$	1,149	$	1,281	$	2,430	$	102,444
Commercial real estate		38,473		584		482		1,066		39,539
Residential mortgages(b)		64,570		1		463		464		65,034
Credit card		23,070		–		293		293		23,363
Other retail		56,101		6		323		329		56,430
Total loans	$	282,228	$	1,740	$	2,842	$	4,582	$	286,810
Total outstanding commitments	$	600,407	$	2,801	$	3,448	$	6,249	$	606,656

(a) Classified rating on consumer loans primarily based on delinquency status.

(b) At December 31, 2019, $1.7 billion of GNMA loans 90 days or more past due and $1.6 billion of restructured GNMA loans whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs were classified with a pass rating, unchanged from December 31, 2018.

For all loan classes, a loan is considered to be impaired when, based on current events or information, it is probable the Company will be unable to collect all amounts due per the contractual terms of the loan agreement. A summary of impaired loans, which include all nonaccrual and TDR loans, by portfolio class was as follows:

(Dollars in Millions)	Period-end Recorded Investment(a)		Unpaid Principal Balance		Valuation Allowance		Commitments to Lend Additional Funds
December 31, 2019
Commercial	$	483	$	1,048	$	39	$	158
Commercial real estate		242		603		7		–
Residential mortgages		1,515		1,827		71		–
Credit card		263		263		81		–
Other retail		318		417		12		2
Total loans, excluding loans purchased from GNMA mortgage pools		2,821		4,158		210		160
Loans purchased from GNMA mortgage pools		1,622		1,622		39		–
Total	$	4,443	$	5,780	$	249	$	160
December 31, 2018
Commercial	$	467	$	1,006	$	32	$	106
Commercial real estate		279		511		12		2
Residential mortgages		1,709		1,879		86		–
Credit card		245		245		69		–
Other retail		335		418		14		5
Total loans, excluding loans purchased from GNMA mortgage pools		3,035		4,059		213		113
Loans purchased from GNMA mortgage pools		1,639		1,639		41		–
Total	$	4,674	$	5,698	$	254	$	113

(a) Substantially all loans classified as impaired at December 31, 2019 and 2018, had an associated allowance for credit losses. The total amount of interest income recognized during 2019 on loans classified as impaired at December 31, 2019, excluding those acquired with deteriorated credit quality, was $194 million, compared to what would have been recognized at the original contractual terms of the loans of $246 million.

Additional information on impaired loans follows for the years ended December 31 follows:

(Dollars in Millions)	Average Recorded Investment		Interest Income Recognized
2019
Commercial	$	520	$	9
Commercial real estate		248		11
Residential mortgages		1,622		92
Credit card		257		–
Other retail		323		12
Total loans, excluding loans purchased from GNMA mortgage pools		2,970		124
Loans purchased from GNMA mortgage pools		1,638		70
Total	$	4,608	$	194
2018
Commercial	$	497	$	8
Commercial real estate		273		13
Residential mortgages		1,817		76
Credit card		236		3
Other retail		309		16
Covered Loans		25		1
Total loans, excluding loans purchased from GNMA mortgage pools		3,157		117
Loans purchased from GNMA mortgage pools		1,640		47
Total	$	4,797	$	164
2017
Commercial	$	683	$	7
Commercial real estate		273		11
Residential mortgages		2,135		103
Credit card		229		3
Other retail		287		14
Covered Loans		37		1
Total loans, excluding loans purchased from GNMA mortgage pools		3,644		139
Loans purchased from GNMA mortgage pools		1,672		65
Total	$	5,316	$	204

Troubled Debt Restructurings In certain circumstances, the Company may modify the terms of a loan to maximize the collection of amounts due when a borrower is experiencing financial difficulties or is expected to experience difficulties in the near-term. The following table provides a summary of loans modified as TDRs for the years ended December 31, by portfolio class:

(Dollars in Millions)	Number of Loans		Pre-Modification Outstanding Loan Balance		Post- Modification Outstanding Loan Balance
2019
Commercial		3,445	$	376	$	359
Commercial real estate		136		129		125
Residential mortgages		417		55		54
Credit card		34,247		185		186
Other retail		2,952		63		61
Total loans, excluding loans purchased from GNMA mortgage pools		41,197		808		785
Loans purchased from GNMA mortgage pools		6,257		856		827
Total loans		47,454	$	1,664	$	1,612
2018
Commercial		2,824	$	336	$	311
Commercial real estate		127		168		169
Residential mortgages		526		73		69
Credit card		33,318		169		171
Other retail		2,462		58		55
Covered Loans		3		1		1
Total loans, excluding loans purchased from GNMA mortgage pools		39,260		805		776
Loans purchased from GNMA mortgage pools		6,268		821		803
Total loans		45,528	$	1,626	$	1,579
2017
Commercial		2,758	$	380	$	328
Commercial real estate		128		82		78
Residential mortgages		800		90		88
Credit card		33,615		161		162
Other retail		3,881		79		68
Covered Loans		11		2		2
Total loans, excluding loans purchased from GNMA mortgage pools		41,193		794		726
Loans purchased from GNMA mortgage pools		6,791		881		867
Total loans		47,984	$	1,675	$	1,593

Residential mortgages, home equity and second mortgages, and loans purchased from GNMA mortgage pools in the table above include trial period arrangements offered to customers during the periods presented. The post-modification balances for these loans reflect the current outstanding balance until a permanent modification is made. In addition, the post-modification balances typically include capitalization of unpaid accrued interest and/or fees under the various modification programs. For those loans modified as TDRs during the fourthquarter of 2019, at December 31, 2019, 41 residential mortgages, 17 home equity and second mortgage loans and 990 loans purchased from GNMA mortgage pools with outstanding balances of $6 million, $1 million and $136 million, respectively, were in a trial period and have estimated post-modification balances of $6 million, $1 million and $135 million, respectively, assuming permanent modification occurs at the end of the trial period.

The following table provides a summary of TDR loans that defaulted (fully or partially charged-off or became 90 days or more past due) for the years ended December 31, that were modified as TDRs within 12 months previous to default:

(Dollars in Millions)	Number of Loans		Amount Defaulted
2019
Commercial		1,040	$	46
Commercial real estate		36		24
Residential mortgages		137		15
Credit card		8,273		40
Other retail		380		10
Total loans, excluding loans purchased from GNMA mortgage pools		9,866		135
Loans purchased from GNMA mortgage pools		997		131
Total loans		10,863	$	266
2018
Commercial		836	$	71
Commercial real estate		39		15
Residential mortgages		191		18
Credit card		8,012		35
Other retail		334		5
Covered loans		1		–
Total loans, excluding loans purchased from GNMA mortgage pools		9,413		144
Loans purchased from GNMA mortgage pools		1,447		187
Total loans		10,860	$	331
2017
Commercial		724	$	53
Commercial real estate		36		9
Residential mortgages		374		41
Credit card		8,372		36
Other retail		415		5
Covered loans		4		–
Total loans, excluding loans purchased from GNMA mortgage pools		9,925		144
Loans purchased from GNMA mortgage pools		1,369		177
Total loans		11,294	$	321

In addition to the defaults in the table above, the Company had a total of 826 residential mortgage loans, home equity and second mortgage loans and loans purchased from GNMA mortgage pools for the year ended December 31, 2019, where borrowers did not successfully complete the trial periodarrangement and, therefore, are no longer eligible for a permanent modification under the applicable modification program. These loans had aggregate outstanding balances of $111 million for the year ended December 31, 2019.

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Earnings Per Share - Additional Information (Detail) - shares shares in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Stock Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Options outstanding of common shares	1	1	1

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Mortgage Servicing Rights

12 Months Ended

Dec. 31, 2019

Text Block [Abstract]

Mortgage Servicing Rights

  NOTE 9   Mortgage Servicing Rights

The Company capitalizes MSRs as separate assets when loans are sold and servicing is retained. MSRs may also be purchased from others. The Company carries MSRs at fair value, with changes in the fair value recorded in earnings during the period in which they occur. The Company serviced $226.0 billion of residential mortgage loans for others at December 31, 2019, and $231.5 billion at December 31, 2018, including subserviced mortgages with no corresponding MSR asset. Included in mortgage banking revenue are the MSR fair value changes arisingfrom market rate and model assumption changes, net of the value change in derivatives used to economically hedge MSRs. These changes resulted in a net loss of $24 million and net gains of $47 million and $15 million for the years ended December 31, 2019, 2018 and 2017, respectively. Loan servicing and ancillary fees, not including valuation changes, included in mortgage banking revenue were $734 million, $746 million and $746 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Changes in fair value of capitalized MSRs for the years ended December 31, are summarized as follows:

(Dollars in Millions)	2019			2018			2017
Balance at beginning of period	$	2,791		$	2,645		$	2,591
Rights purchased		20			8			13
Rights capitalized		559			397			445
Rights sold(a)		5			(27	)		–
Changes in fair value of MSRs
Due to fluctuations in market interest rates(b)		(390	)		98			(23	)
Due to revised assumptions or models(c)		23			56			18
Other changes in fair value(d)		(462	)		(386	)		(399	)
Balance at end of period	$	2,546		$	2,791		$	2,645

(a) MSRs sold in 2019 include those having a negative fair value, resulting from the related loans being severely delinquent.

(b) Includes changes in MSR value associated with changes in market interest rates, including estimated prepayment rates and anticipated earnings on escrow deposits.

(c) Includes changes in MSR value not caused by changes in market interest rates, such as changes in cost to service, ancillary income and option adjusted spread, as well as the impact of any model changes.

(d) Primarily represents changes due to realization of expected cash flows over time (decay).

The estimated sensitivity to changes in interest rates of the fair value of the MSR portfolio and the related derivative instruments as of December 31 follows:

	2019																		2018
(Dollars in Millions)	Down 100 bps			Down 50 bps			Down 25 bps			Up 25 bps			Up 50 bps			Up 100 bps			Down 100 bps			Down 50 bps			Down 25 bps			Up 25 bps			Up 50 bps			Up 100 bps
MSR portfolio	$	(663	)	$	(316	)	$	(153	)	$	141		$	269		$	485		$	(501	)	$	(223	)	$	(105	)	$	92		$	171		$	295
Derivative instrument hedges		613			306			152			(143	)		(279	)		(550	)		455			215			104			(94	)		(177	)		(321	)
Net sensitivity	$	(50	)	$	(10	)	$	(1	)	$	(2	)	$	(10	)	$	(65	)	$	(46	)	$	(8	)	$	(1	)	$	(2	)	$	(6	)	$	(26	)

The fair value of MSRs and their sensitivity to changes in interest rates is influenced by the mix of the servicing portfolio and characteristics of each segment of the portfolio. The Company’s servicing portfolio consists of the distinct portfolios of government-insured mortgages, conventional mortgages and Housing Finance Agency (“HFA”) mortgages. The servicing portfolios are predominantly comprised of fixed-rate agency loans

with limited adjustable-rate or jumbo mortgage loans. The HFA servicing portfolio is comprised of loans originated under state and local housing authority program guidelines which assist purchases by first-time or low- to moderate-income homebuyers through a favorable rate subsidy, down payment and/or closing cost assistance on government- and conventional-insured mortgages.

A summary of the Company’s MSRs and related characteristics by portfolio as of December 31 follows:

	2019												2018
(Dollars in Millions)	HFA			Government			Conventional(d)			Total			HFA			Government			Conventional(d)			Total
Servicing portfolio(a)	$	44,906		$	35,302		$	143,310		$	223,518		$	44,384		$	35,990		$	148,910		$	229,284
Fair value	$	486		$	451		$	1,609		$	2,546		$	526		$	465		$	1,800		$	2,791
Value (bps)(b)		108			128			112			114			119			129			121			122
Weighted-average servicing fees (bps)		34			39			28			31			34			36			27			30
Multiple (value/servicing fees)		3.15			3.29			4.00			3.67			3.45			3.63			4.52			4.11
Weighted-average note rate		4.65	%		3.99	%		4.07	%		4.17	%		4.59	%		3.97	%		4.06	%		4.15	%
Weighted-average age (in years)		3.7			4.9			4.8			4.6			3.3			4.7			4.5			4.3
Weighted-average expected prepayment (constant prepayment rate)		12.2	%		13.7	%		12.2	%		12.4	%		9.8	%		11.0	%		9.1	%		9.5	%
Weighted-average expected life (in years)		6.5			5.7			5.9			6.0			7.7			6.7			7.1			7.2
Weighted-average option adjusted spread(c)		8.4	%		7.9	%		6.9	%		7.3	%		8.6	%		8.3	%		7.2	%		7.6	%

(a) Represents principal balance of mortgages having corresponding MSR asset.

(b) Calculated as fair value divided by the servicing portfolio.

(c) Option adjusted spread is the incremental spread added to the risk-free rate to reflect optionality and other risk inherent in the MSRs.

(d) Represents loans sold primarily to GSEs.

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Long-Term Debt

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Long-Term Debt

  NOTE 13   Long-Term Debt

Long-term debt (debt with original maturities of more than one year) at December 31 consisted of the following:

(Dollars in Millions)	Rate Type		Rate(a)			Maturity Date		2019		2018
U.S. Bancorp (Parent Company)
Subordinated notes		Fixed		2.950	%		2022	$	1,300	$	1,300
		Fixed		3.600	%		2024		1,000		1,000
		Fixed		7.500	%		2026		199		199
		Fixed		3.100	%		2026		1,000		1,000
		Fixed		3.000	%		2029		1,000		–
Medium-term notes		Fixed		.850% - 4.125	%		2021 - 2028		13,820		12,345
		Floating		2.576	%		2022		250		500
Other(b)									33		(53	)
Subtotal									18,602		16,291
Subsidiaries
Federal Home Loan Bank advances		Fixed		1.250% - 8.250	%		2020 - 2026		1,106		307
		Floating		2.165% - 2.461	%		2022 - 2026		3,272		4,272
Bank notes		Fixed		1.950% - 3.450	%		2020 - 2025		9,550		11,600
		Floating		.600% - 2.350	%		2020 - 2059		6,789		7,864
Other(c)									848		1,006
Subtotal									21,565		25,049
Total								$	40,167	$	41,340

(a) Weighted-average interest rates of medium-term notes, Federal Home Loan Bank advances and bank notes were 2.87 percent, 2.42 percent and 2.54 percent, respectively.

(b) Includes debt issuance fees and unrealized gains and losses and deferred amounts relating to derivative instruments.

(c) Includes consolidated community development and tax-advantaged investment VIEs, finance lease obligations, debt issuance fees, and unrealized gains and losses and deferred amounts relating to derivative instruments.

The Company has arrangements with the Federal Home Loan Bank and Federal Reserve Bank whereby the Company could have borrowed an additional $97.4 billion and $98.8 billion at December 31, 2019 and 2018, respectively, based on collateral available.

Maturities of long-term debt outstanding at December 31, 2019, were:

(Dollars in Millions)	Parent Company		Consolidated
2020	$	–	$	3,772
2021		2,696		9,430
2022		3,790		6,298
2023		–		2,799
2024		5,657		5,663
Thereafter		6,459		12,205
Total	$	18,602	$	40,167

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Employee Benefits - Summarizes Changes for Qualified Pension Plan Investment Assets Measured at Fair Value Using Significant Unobservable Inputs (Level 3) (Detail) - Other [Member] - Level 3 [Member] - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Defined Benefit Plan Disclosure [Line Items]
Balance at beginning of period	$ 3	$ 2	$ 1
Purchases, sales, and settlements, net		1	1
Balance at end of period	$ 3	$ 3	$ 2

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Stock-Based Compensation

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

  NOTE 17   Stock-Based Compensation

As part of its employee and director compensation programs, the Company currently may grant certain stock awards under the provisions of its stock incentive plan. The plan provides for grants of options to purchase shares of common stock at a fixed price equal to the fair value of the underlying stock at the date of grant. Option grants are generally exercisable up to ten years from the date of grant. In addition, the plan provides for grants of shares of common stock or stock units that are subject to restriction on transfer prior to vesting. Most stock and unit awards vest over

three to five years and are subject to forfeiture if certain vesting requirements are not met. Stock incentive plans of acquired companies are generally terminated at the merger closing dates. Participants under such plans receive the Company’s common stock, or options to buy the Company’s common stock, based on the conversion terms of the various merger agreements. At December 31, 2019, there were 32 million shares (subject to adjustment for forfeitures) available for grant under the Company’s stock incentive plan.

Stock Option Awards

The following is a summary of stock options outstanding and exercised under prior and existing stock incentive plans of the Company:

Year Ended December 31	Stock Options/Shares			Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value (in millions)
2019
Number outstanding at beginning of period		9,115,010		$	34.52
Granted(a)		—			—
Exercised		(3,333,467	)		26.36
Cancelled(b)		(63,287	)		36.74
Number outstanding at end of period(c)		5,718,256		$	39.25		4.4	$	115
Exercisable at end of period		4,869,805		$	37.67		4.0	$	105
2018
Number outstanding at beginning of period		12,668,467		$	32.15
Granted(a)		—			—
Exercised		(3,443,494	)		25.41
Cancelled(b)		(109,963	)		46.72
Number outstanding at end of period(c)		9,115,010		$	34.52		4.3	$	102
Exercisable at end of period		7,372,036		$	31.61		3.5	$	104
2017
Number outstanding at beginning of period		17,059,241		$	29.95
Granted		1,066,188			54.97
Exercised		(5,389,741	)		29.58
Cancelled(b)		(67,221	)		43.31
Number outstanding at end of period(c)		12,668,467		$	32.15		4.5	$	272
Exercisable at end of period		9,647,937		$	27.87		3.3	$	248

(a) The Company did not grant any stock option awards during 2019 and 2018.

(b) Options cancelled include both non-vested (i.e., forfeitures) and vested options.

(c) Outstanding options include stock-based awards that may be forfeited in future periods. The impact of the estimated forfeitures is reflected in compensation expense.

Stock-based compensation expense is based on the estimated fair value of the award at the date of grant or modification. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model, requiring the use of subjective assumptions. Because employee stock options have characteristics that differ from those of traded options, including vesting provisions and trading limitations that impact

their liquidity, the determined value used to measure compensation expense may vary from the actual fair value of the employee stock options. The following table includes the weighted-average estimated fair value of stock options granted and the assumptions utilized by the Company for newly issued grants for the year ended December 31, 2017:

Year Ended December 31	2017
Estimated fair value	$	14.66
Risk-free interest rates		2.0	%
Dividend yield		2.6	%
Stock volatility factor		.35
Expected life of options (in years)		5.5

Expected stock volatility is based on several factors including the historical volatility of the Company’s common stock, implied volatility determined from traded options and other factors. The Company uses historical data to estimate option exercises and employee terminations to estimate the expected life of options.

The risk-free interest rate for the expected life of the options is based on the U.S. Treasury yield curve in effect on the date of grant. The expected dividend yield is based on the Company’s expected dividend yield over the life of the options.    

The following summarizes certain stock option activity of the Company:

Year Ended December 31 (Dollars in Millions)	2019		2018		2017
Fair value of options vested	$	10	$	14	$	13
Intrinsic value of options exercised		95		97		127
Cash received from options exercised		88		87		159
Tax benefit realized from options exercised		24		24		49

To satisfy option exercises, the Company predominantly uses treasury stock.

Additional information regarding stock options outstanding as of December 31, 2019, is as follows:

	Outstanding Options						Exercisable Options
Range of Exercise Prices	Shares		Weighted- Average Remaining Contractual Life (Years)		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price
$23.36—$25.00		236,661		.2	$	23.82		236,661	$	23.82
$25.01—$30.00		1,277,726		1.8		28.65		1,277,726		28.65
$30.01—$35.00		537,881		3.1		33.98		537,881		33.98
$35.01—$40.00		1,251,397		6.1		39.49		885,968		39.49
$40.01—$45.00		1,454,651		4.7		42.42		1,454,068		42.43
$45.01—$50.00		—		—		—		—		—
$50.01—$55.01		959,940		7.1		54.97		477,501		54.97
		5,718,256		4.4	$	39.25		4,869,805	$	37.67

Restricted Stock and Unit Awards

A summary of the status of the Company’s restricted shares of stock and unit awards is presented below:

	2019					2018					2017
Year Ended December 31	Shares			Weighted- Average Grant- Date Fair Value		Shares			Weighted- Average Grant- Date Fair Value		Shares			Weighted- Average Grant- Date Fair Value
Outstanding at beginning of period		6,719,298		$	48.17		7,446,955		$	44.49		8,265,507		$	39.50
Granted		3,519,474			50.45		3,213,023			55.03		2,850,927			54.45
Vested		(3,270,778	)		48.69		(3,373,323	)		46.42		(3,295,376	)		40.66
Cancelled		(361,161	)		50.55		(567,357	)		49.07		(374,103	)		43.91
Outstanding at end of period		6,606,833		$	48.99		6,719,298		$	48.17		7,446,955		$	44.49

The total fair value of shares vested was $175 million, $182 million and $180 million for the years ended December 31, 2019, 2018 and 2017, respectively. Stock-based compensation expense was $178 million, $174 million and $163 million for the years ended December 31, 2019, 2018 and 2017, respectively. On an after-tax basis, stock-based compensation was $133 million, $130 million and $101 million for the years ended

December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, there was $143 million of total unrecognized compensation cost related to nonvested share-based arrangements granted under the plans. That cost is expected to be recognized over a weighted-average period of 1.7 years as compensation expense.

XML

Employee Benefits - Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost (Detail)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Discount rate	4.45%	3.84%	4.27%
Cash balance interest crediting rate	3.00%	3.00%	3.00%
Expected return on plan assets	7.25%	7.25%	7.25%
Rate of compensation increase	3.52%	3.56%	3.58%
Postretirement Welfare Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Discount rate	4.05%	3.34%	3.57%
Expected return on plan assets	3.50%	3.50%	3.50%
Net Periodic Benefit Cost Assumptions [Member] | Prior to age 65 [Member]
Health care cost trend rate
Health care cost trend rate	6.50%	6.75%	7.00%
Net Periodic Benefit Cost Assumptions [Member] | After age 65 [Member]
Health care cost trend rate
Health care cost trend rate	10.00%	6.75%	7.00%

XML

Stock-Based Compensation - Weighted-Average Estimated Fair Value of Stock Options Granted and Assumptions Utilized by Company for Newly Issued Grants (Detail)	12 Months Ended
	Dec. 31, 2017 $ / shares
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Estimated fair value	$ 14.66
Risk-free interest rates	2.00%
Dividend yield	2.60%
Stock volatility factor	0.35%
Expected life of options (in years)	5 years 6 months

XML

Fair Values of Assets and Liabilities

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Fair Values of Assets and Liabilities

  NOTE 21 Fair Values of Assets and Liabilities

The Company uses fair value measurements for the initial recording of certain assets and liabilities, periodic remeasurement of certain assets and liabilities, and disclosures. Derivatives, trading and available-for-sale investment securities, MSRs and substantially all MLHFS are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as loans held for sale, loans held for investment and certain other assets. These nonrecurring fair value adjustments typically involve application of lower-of-cost-or-fair value accounting or impairment write-downs of individual assets.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value measurement reflects all of the assumptions that market participants would use in pricing the asset or liability, including assumptions about the risk inherent in a particular valuation technique, the effect of a restriction on the sale or use of an asset and the risk of nonperformance.

The Company groups its assets and liabilities measured at fair value into a three-level hierarchy for valuation techniques used to measure financial assets and financial liabilities at fair value. This hierarchy is based on whether the valuation inputs are observable or unobservable. These levels are:

– Level 1—Quoted prices in active markets for identical assets or liabilities. Level 1 includes U.S. Treasury securities, as well as exchange-traded instruments.

– Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for

substantially the full term of the assets or liabilities. Level 2 includes debt securities that are traded less frequently than exchange-traded instruments and which are typically valued using third-party pricing services; derivative contracts and other assets and liabilities, including securities, whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data; and MLHFS whose values are determined using quoted prices for similar assets or pricing models with inputs that are observable in the market or can be corroborated by observable market data.

– Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category includes MSRs and certain derivative contracts.

Valuation Methodologies

The valuation methodologies used by the Company to measure financial assets and liabilities at fair value are described below. In addition, the following section includes an indication of the level of the fair value hierarchy in which the assets or liabilities are classified. Where appropriate, the descriptions include information about the valuation models and key inputs to those models. During the years ended December 31, 2019, 2018 and 2017, there were no significant changes to the valuation techniques used by the Company to measure fair value.

Available-For-Sale Investment Securities When quoted market prices for identical securities are available in an active market, these prices are used to determine fair value and these securities are classified within Level 1 of the fair value hierarchy. Level 1 investment securities include U.S. Treasury and exchange-traded securities.

For other securities, quoted market prices may not be readily available for the specific securities. When possible, the Company determines fair value based on market observable information, including quoted market prices for similar securities, inactive transaction prices, and broker quotes. These securities are classified within Level 2 of the fair value hierarchy. Level 2 valuations are generally provided by a third-party pricing service. Level 2 investment securities are predominantly agency mortgage-backed securities, certain other asset-backed securities, obligations of state and political subdivisions and agency debt securities.

Mortgage Loans Held For Sale MLHFS measured at fair value, for which an active secondary market and readily available market prices exist, are initially valued at the transaction price and are subsequently valued by comparison to instruments with similar collateral and risk profiles. MLHFS are classified within Level 2. Included in mortgage banking revenue was a net gain of $73 million, a net loss of $60 million and a net gain of $84 million for the years ended December 31, 2019, 2018 and 2017, respectively, from the changes to fair value of these MLHFS under fair value option accounting guidance. Changes in fair value due to instrument specific credit risk were immaterial. Interest income for MLHFS is measured based on contractual interest rates and reported as interest income on the Consolidated Statement of Income. Electing to measure MLHFS at fair value reduces certain timing differences and better matches changes in fair value of these assets with changes in the value of the derivative instruments used to economically hedge them without the burden of complying with the requirements for hedge accounting.

Mortgage Servicing Rights MSRs are valued using a discounted cash flow methodology, and are classified within Level 3. The Company determines fair value of the MSRs by projecting future cash flows for different interest rate scenarios using prepayment rates and other assumptions, and discounts these cash flows using a risk adjusted rate based on option adjusted spread levels. There is minimal observable market activity for MSRs on comparable portfolios and, therefore, the determination of fair value requires significant management judgment. Refer to Note 9 for further information on MSR valuation assumptions.

Derivatives The majority of derivatives held by the Company are executed over-the-counter or centrally cleared through clearinghouses and are valued using market standard cash flow valuation techniques. The models incorporate inputs, depending on the type of derivative, including interest rate curves, foreign exchange rates and volatility. All derivative values incorporate an assessment of the risk of counterparty nonperformance, measured based on the Company’s evaluation of credit risk

including external assessments of credit risk. The Company monitors and manages its nonperformance risk by considering its ability to net derivative positions under master netting arrangements, as well as collateral received or provided under collateral arrangements. Accordingly, the Company has elected to measure the fair value of derivatives, at a counterparty level, on a net basis. The majority of the derivatives are classified within Level 2 of the fair value hierarchy, as the significant inputs to the models, including nonperformance risk, are observable. However, certain derivative transactions are with counterparties where risk of nonperformance cannot be observed in the market and, therefore, the credit valuation adjustments result in these derivatives being classified within Level 3 of the fair value hierarchy.

The Company also has other derivative contracts that are created through its operations, including commitments to purchase and originate mortgage loans and swap agreements executed in conjunction with the sale of a portion of its Class B common and preferred shares of Visa Inc. (the “Visa swaps”). The mortgage loan commitments are valued by pricing models that include market observable and unobservable inputs, which result in the commitments being classified within Level 3 of the fair value hierarchy. The unobservable inputs include assumptions about the percentage of commitments that actually become a closed loan and the MSR value that is inherent in the underlying loan value. The Visa swaps require payments by either the Company or the purchaser of the Visa Inc. Class B common and preferred shares when there are changes in the conversion rate of the Visa Inc. Class B common and preferred shares to Visa Inc. Class A common and preferred shares, respectively, as well as quarterly payments to the purchaser based on specified terms of the agreements. Management reviews and updates the Visa swaps fair value in conjunction with its review of Visa Inc. related litigation contingencies, and the associated escrow funding. The expected litigation resolution impacts the Visa Inc. Class B common share to Visa Inc. Class A common share conversion rate, as well as the ultimate termination date for the Visa swaps. Accordingly, the Visa swaps are classified within Level 3. Refer to Note 22 for further information on the Visa Inc. restructuring and related card association litigation.

Significant Unobservable Inputs of Level 3 Assets and Liabilities

The following section provides information to facilitate an understanding of the uncertainty in the fair value measurements for the Company’s Level 3 assets and liabilities recorded at fair value on the Consolidated Balance Sheet. This section includes a description of the significant inputs used by the Company and a description of any interrelationships between these inputs. The discussion below excludes nonrecurring fair value measurements of collateral value used for impairment measures for loans and OREO. These valuations utilize third-party appraisal or broker price opinions, and are classified as Level 3 due to the significant judgment involved.

Mortgage Servicing Rights The significant unobservable inputs used in the fair value measurement of the Company’s MSRs are expected prepayments and the option adjusted spread that is added to the risk-free rate to discount projected cash flows. Significant increases in either of these inputs in isolation would have resulted in a significantly lower fair value measurement. Significant decreases in either of these inputs in isolation wouldhave resulted in a significantly higher fair value measurement. There is no direct interrelationship between prepayments and option adjusted spread. Prepayment rates generally move in the opposite direction of market interest rates. Option adjusted spread is generally impacted by changes in market return requirements.

The following table shows the significant valuation assumption ranges for MSRs at December 31, 2019:

	Minimum			Maximum			Weighted Average(a)
Expected prepayment		9	%		22	%		12	%
Option adjusted spread		6			10			7

(a) Determined based on the relative fair value of the related mortgage loans serviced.

Derivatives The Company has two distinct Level 3 derivative portfolios: (i) the Company’s commitments to purchase and originate mortgage loans that meet the requirements of a derivative and (ii) the Company’s asset/liability and customer-related derivatives that are Level 3 due to unobservable inputs related to measurement of risk of nonperformance by the counterparty. In addition, the Company’s Visa swaps are classified within Level 3.

The significant unobservable inputs used in the fair value measurement of the Company’s derivative commitments to

purchase and originate mortgage loans are the percentage of commitments that actually become a closed loan and the MSR value that is inherent in the underlying loan value. A significant increase in the rate of loans that close would have resulted in a larger derivative asset or liability. A significant increase in the inherent MSR value would have resulted in an increase in the derivative asset or a reduction in the derivative liability. Expected loan close rates and the inherent MSR values are directly impacted by changes in market rates and will generally move in the same direction as interest rates.

The following table shows the significant valuation assumption ranges for the Company’s derivative commitments to purchase and originate mortgage loans at December 31, 2019:

	Minimum			Maximum			Weighted Average(a)
Expected loan close rate		12	%		100	%		78	%
Inherent MSR value (basis points per loan)		56			221			130

(a) Determined based on the relative fair value of the related mortgage loans.

The significant unobservable input used in the fair value measurement of certain of the Company’s asset/liability and customer-related derivatives is the credit valuation adjustment related to the risk of counterparty nonperformance. A significant increase in the credit valuation adjustment would have resulted in a lower fair value measurement. A significant decrease in the credit valuation adjustment would have resulted in a higher fair value measurement. The credit valuation adjustment is impacted by changes in market rates, volatility, market implied credit spreads, and loss recovery rates, as well as the Company’s assessment of the counterparty’s credit position. At December 31, 2019, the minimum, maximum and weighted-average credit valuation adjustment as a percentage of the

derivative contract fair value prior to adjustment was 0 percent, 671 percent and 1 percent, respectively.

The significant unobservable inputs used in the fair value measurement of the Visa swaps are management’s estimate of the probability of certain litigation scenarios, and the timing of the resolution of the related litigation loss estimates in excess, or shortfall, of the Company’s proportional share of escrow funds. An increase in the loss estimate or a delay in the resolution of the related litigation would have resulted in an increase in the derivative liability. A decrease in the loss estimate or an acceleration of the resolution of the related litigation would have resulted in a decrease in the derivative liability.

The following table summarizes the balances of assets and liabilities measured at fair value on a recurring basis:

(Dollars in Millions)	Level 1		Level 2		Level 3		Netting			Total
December 31, 2019
Available-for-sale securities
U.S. Treasury and agencies	$	18,986	$	853	$	–	$	–		$	19,839
Mortgage-backed securities
Residential agency		–		94,111		–		–			94,111
Commercial agency		–		1,453		–		–			1,453
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations		–		–		1		–			1
Other		–		375		7		–			382
Obligations of state and political subdivisions		–		6,813		1		–			6,814
Obligations of foreign governments		–		9		–		–			9
Corporate debt securities		–		4		–		–			4
Total available-for-sale		18,986		103,618		9		–			122,613
Mortgage loans held for sale		–		5,533		–		–			5,533
Mortgage servicing rights		–		–		2,546		–			2,546
Derivative assets		9		1,707		1,181		(982	)		1,915
Other assets		312		1,563		–		–			1,875
Total	$	19,307	$	112,421	$	3,736	$	(982	)	$	134,482
Derivative liabilities	$	–	$	1,612	$	371	$	(1,067	)	$	916
Short-term borrowings and other liabilities(a)		50		1,578		–		–			1,628
Total	$	50	$	3,190	$	371	$	(1,067	)	$	2,544
December 31, 2018
Available-for-sale securities
U.S. Treasury and agencies	$	18,585	$	672	$	–	$	–		$	19,257
Mortgage-backed securities
Residential agency		–		39,752		–		–			39,752
Commercial agency		–		2		–		–			2
Other asset-backed securities		–		403		–		–			403
Obligations of state and political subdivisions		–		6,701		–		–			6,701
Total available-for-sale		18,585		47,530		–		–			66,115
Mortgage loans held for sale		–		2,035		–		–			2,035
Mortgage servicing rights		–		–		2,791		–			2,791
Derivative assets		–		1,427		583		(942	)		1,068
Other assets		392		1,273		–		–			1,665
Total	$	18,977	$	52,265	$	3,374	$	(942	)	$	73,674
Derivative liabilities	$	1	$	1,291	$	503	$	(946	)	$	849
Short-term borrowings and other liabilities(a)		199		1,019		–		–			1,218
Total	$	200	$	2,310	$	503	$	(946	)	$	2,067

Note: Excluded from the table above are equity investments without readily determinable fair values. The Company has elected to carry these investments at historical cost, adjusted for impairment and any changes resulting from observable price changes for identical or similar investments of the issuer. The aggregate carrying amount of these equity investments was $91 million and $86 million at December 31, 2019 and 2018, respectively. The Company has not recorded impairments or adjustments for observable price changes on these equity investments during 2019 or on a cumulative basis.

(a) Primarily represents the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.

The following table presents the changes in fair value for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31:

(Dollars in Millions)	Beginning of Period Balance		Net Gains (Losses) Included in Net Income			Net Gains (Losses) Included in Other Comprehensive Income (Loss)			Purchases		Sales			Principal Payments			Issuances			Settlements			Transfers into Level 3		End of Period Balance		Net Change in Unrealized Gains (Losses) Relating to Assets and Liabilities Held at End of Period
2019
Available-for-sale securities
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations	$	–	$	–		$	–		$	–	$	–		$	–		$	–		$	–		$	1	$	1	$	–
Other		–		–			–			–		–			–			–			–			7		7		–
Obligations of state and political subdivisions		–		–			–			–		–			–			–			–			1		1		–
Total available-for-sale		–		–			–			–		–			–			–			–			9		9		–
Mortgage servicing rights		2,791		(829	)(c)		–			20		5			–			559	(e)		–			–		2,546		(829	)(c)
Net derivative assets and liabilities		80		769	(d)		–			142		(9	)		–			–			(172	)		–		810		782	(f)
2018
Mortgage servicing rights	$	2,645	$	(232	)(c)	$	–		$	8	$	(27	)	$	–		$	397	(e)	$	–		$	–	$	2,791	$	(232	)(c)
Net derivative assets and liabilities		107		21	(g)		–			13		(41	)		–			–			(20	)		–		80		34	(h)
2017
Available-for-sale securities
Residential non-agency mortgage-backed securities
Prime(a)	$	242	$	–		$	(2	)	$	–	$	(234	)	$	(6	)	$	–		$	–		$	–	$	–	$	–
Non-prime(b)		195		–			(17	)		–		(175	)		(3	)		–			–			–		–		–
Other asset-backed securities		2		–			–			–		(2	)		–			–			–			–		–		–
Corporate debt securities		9		–			2			–		(11	)		–			–			–			–		–		–
Total available-for-sale		448		–			(17	)(i)		–		(422	)		(9	)		–			–			–		–		–
Mortgage servicing rights		2,591		(404	)(c)		–			13		–			–			445	(e)		–			–		2,645		(404	)(c)
Net derivative assets and liabilities		171		317	(j)		–			1		(10	)		–			–			(372	)		–		107		(52	)(k)

(a) Prime securities are those designated as such by the issuer at origination. When an issuer designation is unavailable, the Company determines at acquisition date the categorization based on asset pool characteristics (such as weighted-average credit score, loan-to-value, loan type, prevalence of low documentation loans) and deal performance (such as pool delinquencies and security market spreads).

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

(c) Included in mortgage banking revenue.

(d) Approximately $287 million included in other noninterest income and $482 million included in mortgage banking revenue.

(e) Represents MSRs capitalized during the period.

(f) Approximately $747 million included in other noninterest income and $35 million included in mortgage banking revenue.

(g) Approximately $(139) million included in other noninterest income and $160 million included in mortgage banking revenue.

(h) Approximately $14 million included in other noninterest income and $20 million included in mortgage banking revenue.

(i) Included in changes in unrealized gains and losses on investment securities available-for-sale.

(j) Approximately $21 million included in other noninterest income and $296 million included in mortgage banking revenue.

(k) Approximately $(77) million included in other noninterest income and $25 million included in mortgage banking revenue.

The Company is also required periodically to measure certain other financial assets at fair value on a nonrecurring basis. These measurements of fair value usually result from the application of lower-of-cost-or-fair value accounting or write-downs of individual assets.

The following table summarizes the balances as of the measurement date of assets measured at fair value on a nonrecurring basis, and still held as of December 31:

	2019								2018
(Dollars in Millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Loans(a)	$	–	$	–	$	136	$	136	$	–	$	–	$	40	$	40
Other assets(b)		–		–		46		46		–		–		57		57

(a) Represents the carrying value of loans for which adjustments were based on the fair value of the collateral, excluding loans fully charged-off.

(b) Primarily represents the fair value of foreclosed properties that were measured at fair value based on an appraisal or broker price opinion of the collateral subsequent to their initial acquisition.

The following table summarizes losses recognized related to nonrecurring fair value measurements of individual assets or portfolios for the years ended December 31:

(Dollars in Millions)	2019		2018		2017
Loans(a)	$	122	$	83	$	171
Other assets(b)		17		26		20

(a) Represents write-downs of loans which were based on the fair value of the collateral, excluding loans fully charged-off.

(b) Primarily represents related losses of foreclosed properties that were measured at fair value subsequent to their initial acquisition.

Fair Value Option

The following table summarizes the differences between the aggregate fair value carrying amount of MLHFS for which the fair value option has been elected and the aggregate unpaid principal amount that the Company is contractually obligated to receive at maturity as of December 31:

	2019						2018
(Dollars in Millions)	Fair Value Carrying Amount		Aggregate Unpaid Principal		Carrying Amount Over (Under) Unpaid Principal		Fair Value Carrying Amount		Aggregate Unpaid Principal		Carrying Amount Over (Under) Unpaid Principal
Total loans	$	5,533	$	5,366	$	167	$	2,035	$	1,972	$	63
Nonaccrual loans		1		1		–		2		2		–
Loans 90 days or more past due		1		1		–		–		–		–

Fair Value of Financial Instruments

The following section summarizes the estimated fair value for financial instruments accounted for at amortized cost as of December 31, 2019 and 2018. In accordance with disclosure guidance related to fair values of financial instruments, the Company did not include assets and liabilities that are not financial instruments, such as the value of goodwill, long-term

relationships with deposit, credit card, merchant processing and trust customers, other purchased intangibles, premises and equipment, deferred taxes and other liabilities. Additionally, in accordance with the disclosure guidance, receivables and payables due in one year or less, insurance contracts, equity investments not accounted for at fair value, and deposits with no defined or contractual maturities are excluded.

The estimated fair values of the Company’s financial instruments as of December 31, are shown in the table below:

	2019										2018
	Carrying Amount		Fair Value								Carrying Amount		Fair Value
(Dollars in Millions)			Level 1		Level 2		Level 3		Total				Level 1		Level 2		Level 3		Total
Financial Assets
Cash and due from banks	$	22,405	$	22,405	$	–	$	–	$	22,405	$	21,453	$	21,453	$	–	$	–	$	21,453
Federal funds sold and securities purchased under resale agreements		1,036		–		1,036		–		1,036		306		–		306		–		306
Investment securities held-to-maturity		–		–		–		–		–		46,050		4,594		40,359		11		44,964
Loans held for sale(a)		45		–		–		43		43		21		–		–		21		21
Loans		292,082		–		–		297,241		297,241		282,837		–		–		284,790		284,790
Other		1,923		–		929		994		1,923		2,412		–		1,241		1,171		2,412
Financial Liabilities
Time deposits		42,894		–		42,831		–		42,831		44,554		–		44,140		–		44,140
Short-term borrowings(b)		22,095		–		21,461		–		21,461		12,921		–		12,678		–		12,678
Long-term debt		40,167		–		41,077		–		41,077		41,340		–		41,003		–		41,003
Other		3,678		–		1,342		2,336		3,678		1,726		–		–		1,726		1,726

(a) Excludes mortgages held for sale for which the fair value option under applicable accounting guidance was elected.

(b) Excludes the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.

The fair value of unfunded commitments, deferred non-yield related loan fees, standby letters of credit and other guarantees is approximately equal to their carrying value. The carrying value of unfunded commitments, deferred non-yield related loan fees and

standby letters of credit was $528 million and $532 million at December 31, 2019 and 2018, respectively. The carrying value of other guarantees was $200 million and $263 million at December 31, 2019 and 2018, respectively.

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Shareholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Billions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2006	Dec. 31, 2019
Class of Stock [Line Items]
Number of preferred stock shares authorized	50,000,000									50,000,000
Number of common stock shares authorized	4,000,000,000									4,000,000,000
Number of common stock shares outstanding	1,600,000,000									1,500,000,000
Number of common stock shares reserved for future issuance										45,000,000
Remaining authorized share repurchase amount										$ 2.4
Preferred stock outstanding	209,510									209,510
Series H [Member]
Class of Stock [Line Items]
Preferred Stock, Shares Issued					20,000
Liquidation preference per share					$ 25,000
Preferred stock dividend rate fixed percentage					5.15%
Preferred stock outstanding	20,000									20,000
Series F [Member]
Class of Stock [Line Items]
Preferred Stock, Shares Issued						44,000
Liquidation preference per share						$ 25,000
Preferred stock dividend rate fixed percentage						6.50%
Redemption period of preferred stock						90 days
Preferred stock redemption date						Jan. 15, 2022
Preferred stock dividend rate variable percentage						4.468%
Preferred stock outstanding	44,000									44,000
Series K Preferred Stock [Member]
Class of Stock [Line Items]
Preferred Stock, Shares Issued	23,000
Liquidation preference per share	$ 25,000
Preferred stock dividend rate fixed percentage	5.50%
Redemption period of preferred stock	90 days
Preferred stock redemption date	Oct. 15, 2023
Preferred stock outstanding	23,000									23,000
Series A [Member]
Class of Stock [Line Items]
Preferred Stock, Shares Issued							6,764	5,746
Liquidation preference per share							$ 100,000	$ 100,000
Preferred stock dividend rate fixed percentage							3.50%	3.50%
Preferred stock dividend rate variable percentage							1.02%	1.02%
Preferred stock outstanding	12,510									12,510
Series A [Member] | Noncontrolling Interests [Member]
Class of Stock [Line Items]
Liquidation preference per share									$ 100,000
Preferred stock dividend rate variable percentage									1.147%
Minority interest preferred stock, shares issued									5,000
Number of stock repurchased during period			500
Preferred stock outstanding										4,500
Series B [Member]
Class of Stock [Line Items]
Preferred Stock, Shares Issued									40,000
Liquidation preference per share									$ 25,000
Preferred stock dividend rate fixed percentage									3.50%
Preferred stock dividend rate variable percentage									0.60%
Preferred stock outstanding	40,000									40,000
Series I [Member]
Class of Stock [Line Items]
Preferred Stock, Shares Issued				30,000
Liquidation preference per share				$ 25,000
Preferred stock dividend rate fixed percentage				5.125%
Redemption period of preferred stock				90 days
Preferred stock redemption date				Jan. 15, 2021
Preferred stock dividend rate variable percentage				3.486%
Preferred stock outstanding	30,000									30,000
Series J [Member]
Class of Stock [Line Items]
Preferred Stock, Shares Issued		40,000
Liquidation preference per share		$ 25,000
Preferred stock dividend rate fixed percentage		5.30%
Redemption period of preferred stock		90 days
Preferred stock redemption date		Apr. 15, 2027
Preferred stock dividend rate variable percentage		2.914%
Preferred stock outstanding	40,000									40,000

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Shareholders' Equity - Reconciliation of Transactions Affecting Accumulated Other Comprehensive Income (Loss) Included in Shareholders' Equity (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	$ (2,322)	$ (1,404)	$ (1,535)
Revaluation of tax related balances		(300)
Changes in unrealized gains and losses	1,693	(656)	178
Changes in unrealized gains and losses	(229)	39	(5)
Changes in unrealized gains and losses	(380)	(302)	(41)
Changes in unrealized gains and losses	1,084	(919)	132
Unrealized gains and losses on held-to-maturity investment securities transferred to available-for-sale	141
Foreign currency translation adjustment	26	3	(2)
Reclassification to earnings of realized gains and losses	20	93	77
Applicable income taxes	(322)	205	(76)
Balance at end of period	(1,373)	(2,322)	(1,404)
Foreign Currency Translation [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	(84)	(69)	(71)
Revaluation of tax related balances		(13)
Foreign currency translation adjustment	26	3	(2)
Applicable income taxes	(7)	(5)	4
Balance at end of period	(65)	(84)	(69)
Unrealized Gains (Losses) on Retirement Plans [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	(1,418)	(1,066)	(1,113)
Revaluation of tax related balances		(229)
Changes in unrealized gains and losses	(380)	(302)	(41)
Reclassification to earnings of realized gains and losses	89	137	117
Applicable income taxes	73	42	(29)
Balance at end of period	(1,636)	(1,418)	(1,066)
Unrealized Gains (Losses) on Derivative Hedges [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	112	71	55
Revaluation of tax related balances		15
Changes in unrealized gains and losses	(229)	39	(5)
Reclassification to earnings of realized gains and losses	11	(5)	30
Applicable income taxes	55	(8)	(9)
Balance at end of period	(51)	112	71
Unrealized Gains (Losses) on Investment Securities Transferred From Available For Sale to Held To Maturity [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	14	17	25
Revaluation of tax related balances		4
Unrealized gains and losses on held-to-maturity investment securities transferred to available-for-sale	(9)
Reclassification to earnings of realized gains and losses	(7)	(9)	(13)
Applicable income taxes	2	2	5
Balance at end of period		14	17
Unrealized Gains (Losses) on Investment Securities Available-For-Sale [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	(946)	(357)	(431)
Revaluation of tax related balances		(77)
Changes in unrealized gains and losses	1,693	(656)	178
Unrealized gains and losses on held-to-maturity investment securities transferred to available-for-sale	150
Reclassification to earnings of realized gains and losses	(73)	(30)	(57)
Applicable income taxes	(445)	174	(47)
Balance at end of period	$ 379	$ (946)	$ (357)

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Intangible Assets - Estimated Amortization Expense (Detail) $ in Millions	Dec. 31, 2019 USD ($)
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2020	$ 155
2021	130
2022	109
2023	76
2024	$ 60

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Guarantees and Contingent Liabilities - Summary of Other Guarantees and Contingent Liabilities (Detail) $ in Millions	Dec. 31, 2019 USD ($)
Standby Letters of Credit [Member]
Guarantor Obligations [Line Items]
Carrying Amount	$ 48
Maximum Potential Future Payments	10,258
Third Party Borrowing Arrangements [Member]
Guarantor Obligations [Line Items]
Maximum Potential Future Payments	7
Securities Lending Indemnifications [Member]
Guarantor Obligations [Line Items]
Collateral Held	4,564
Maximum Potential Future Payments	4,468
Asset Sales [Member]
Guarantor Obligations [Line Items]
Carrying Amount	68
Maximum Potential Future Payments	5,069
Merchant Processing [Member]
Guarantor Obligations [Line Items]
Collateral Held	589
Carrying Amount	61
Maximum Potential Future Payments	108,875
Tender Option Bond Program Guarantee [Member]
Guarantor Obligations [Line Items]
Collateral Held	2,994
Maximum Potential Future Payments	2,725
Minimum Revenue Guarantees [Member]
Guarantor Obligations [Line Items]
Maximum Potential Future Payments	3
Other Guarantees [Member]
Guarantor Obligations [Line Items]
Carrying Amount	71
Maximum Potential Future Payments	$ 1,461

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Investment Securities - Amortized Cost, Fair Value and Yield by Maturity Date (Detail) - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2019		Dec. 31, 2018
Contractual Maturities of Investment Securities [Line Items]
Available-for-sale securities, Amortized Cost		$ 122,117	[1]	$ 67,381
Available-for-sale securities, total, fair value	[2]	$ 122,613	[1]	66,115
Available-for-sale securities, total, weighted-average maturity in years	[1]	4 years 2 months 12 days
Available-for-sale securities, total, weighted-average yield	[1]	2.38%
U.S. Treasury and Agencies [Member]
Contractual Maturities of Investment Securities [Line Items]
Available-for-sale securities, maturing in one year or less, amortized cost		$ 4,243
Available-for-sale securities, maturing after one year through five years, amortized cost		12,881
Available-for-sale securities, maturing after five years through ten years, amortized cost		2,721
Available-for-sale securities, Amortized Cost		19,845		19,604
Available-for-sale securities, maturing in one year or less, fair value		4,242
Available-for-sale securities, maturing after one year through five years, fair value		12,901
Available-for-sale securities, maturing after five years through ten years, fair value		2,696
Available-for-sale securities, total, fair value		$ 19,839		19,257
Available-for-sale securities, maturing in one year or less, weighted-average maturity in years		7 months 6 days
Available-for-sale securities, maturing after one year through five years, weighted-average maturity in years		2 years 4 months 24 days
Available-for-sale securities, maturing after five years through ten years, weighted-average maturity in years		7 years 6 months
Available-for-sale securities, total, weighted-average maturity in years		2 years 8 months 12 days
Available-for-sale securities, maturing in one year or less, weighted-average yield	[3]	1.61%
Available-for-sale securities, maturing after one year through five years, weighted-average yield	[3]	1.65%
Available-for-sale securities, maturing after five years through ten years, weighted-average yield	[3]	1.95%
Available-for-sale securities, total, weighted-average yield	[3]	1.68%
Mortgage-Backed Securities [Member]
Contractual Maturities of Investment Securities [Line Items]
Available-for-sale securities, maturing in one year or less, amortized cost	[4]	$ 197
Available-for-sale securities, maturing after one year through five years, amortized cost	[4]	66,940
Available-for-sale securities, maturing after five years through ten years, amortized cost	[4]	27,339
Available-for-sale securities, maturing after ten years, amortized cost	[4]	909
Available-for-sale securities, Amortized Cost	[4]	95,385
Available-for-sale securities, maturing in one year or less, fair value	[4]	197
Available-for-sale securities, maturing after one year through five years, fair value	[4]	67,102
Available-for-sale securities, maturing after five years through ten years, fair value	[4]	27,349
Available-for-sale securities, maturing after ten years, fair value	[4]	916
Available-for-sale securities, total, fair value	[4]	$ 95,564
Available-for-sale securities, maturing in one year or less, weighted-average maturity in years	[4]	8 months 12 days
Available-for-sale securities, maturing after one year through five years, weighted-average maturity in years	[4]	3 years 7 months 6 days
Available-for-sale securities, maturing after five years through ten years, weighted-average maturity in years	[4]	6 years
Available-for-sale securities, maturing after ten years, weighted- average maturity in years	[4]	11 years 4 months 24 days
Available-for-sale securities, total, weighted-average maturity in years	[4]	4 years 4 months 24 days
Available-for-sale securities, maturing in one year or less, weighted-average yield	[3],[4]	2.28%
Available-for-sale securities, maturing after one year through five years, weighted-average yield	[3],[4]	2.30%
Available-for-sale securities, maturing after five years through ten years, weighted-average yield	[3],[4]	2.58%
Available-for-sale securities, maturing after ten years, weighted-average yield	[3],[4]	2.76%
Available-for-sale securities, total, weighted-average yield	[3],[4]	2.39%
Asset-Backed Securities [Member]
Contractual Maturities of Investment Securities [Line Items]
Available-for-sale securities, maturing after one year through five years, amortized cost	[4]	$ 374
Available-for-sale securities, maturing after five years through ten years, amortized cost	[4]	1
Available-for-sale securities, Amortized Cost	[4]	375
Available-for-sale securities, maturing after one year through five years, fair value	[4]	381
Available-for-sale securities, maturing after five years through ten years, fair value	[4]	1
Available-for-sale securities, maturing after ten years, fair value	[4]	1
Available-for-sale securities, total, fair value	[4]	$ 383
Available-for-sale securities, maturing after one year through five years, weighted-average maturity in years	[4]	3 years 1 month 6 days
Available-for-sale securities, maturing after five years through ten years, weighted-average maturity in years	[4]	6 years 1 month 6 days
Available-for-sale securities, maturing after ten years, weighted- average maturity in years	[4]	15 years 3 months 18 days
Available-for-sale securities, total, weighted-average maturity in years	[4]	3 years 1 month 6 days
Available-for-sale securities, maturing after one year through five years, weighted-average yield	[3],[4]	3.09%
Available-for-sale securities, maturing after five years through ten years, weighted-average yield	[3],[4]	2.56%
Available-for-sale securities, maturing after ten years, weighted-average yield	[3],[4]	2.41%
Available-for-sale securities, total, weighted-average yield	[3],[4]	3.09%
Obligations of State and Political Subdivisions [Member]
Contractual Maturities of Investment Securities [Line Items]
Available-for-sale securities, maturing in one year or less, amortized cost	[5],[6]	$ 66
Available-for-sale securities, maturing after one year through five years, amortized cost	[5],[6]	695
Available-for-sale securities, maturing after five years through ten years, amortized cost	[5],[6]	5,720
Available-for-sale securities, maturing after ten years, amortized cost	[5],[6]	18
Available-for-sale securities, Amortized Cost		6,499	[5],[6]	6,836
Available-for-sale securities, maturing in one year or less, fair value	[5],[6]	66
Available-for-sale securities, maturing after one year through five years, fair value	[5],[6]	722
Available-for-sale securities, maturing after five years through ten years, fair value	[5],[6]	6,004
Available-for-sale securities, maturing after ten years, fair value	[5],[6]	22
Available-for-sale securities, total, fair value		$ 6,814	[5],[6]	$ 6,701
Available-for-sale securities, maturing in one year or less, weighted-average maturity in years	[5],[6]	1 month 6 days
Available-for-sale securities, maturing after one year through five years, weighted-average maturity in years	[5],[6]	3 years
Available-for-sale securities, maturing after five years through ten years, weighted-average maturity in years	[5],[6]	7 years 1 month 6 days
Available-for-sale securities, maturing after ten years, weighted- average maturity in years	[5],[6]	14 years
Available-for-sale securities, total, weighted-average maturity in years	[5],[6]	6 years 7 months 6 days
Available-for-sale securities, maturing in one year or less, weighted-average yield	[3],[5],[6]	5.81%
Available-for-sale securities, maturing after one year through five years, weighted-average yield	[3],[5],[6]	4.50%
Available-for-sale securities, maturing after five years through ten years, weighted-average yield	[3],[5],[6]	4.24%
Available-for-sale securities, maturing after ten years, weighted-average yield	[3],[5],[6]	6.15%
Available-for-sale securities, total, weighted-average yield	[3],[5],[6]	4.29%
Other Debt Securities and Obligations of Foreign Governments [Member]
Contractual Maturities of Investment Securities [Line Items]
Available-for-sale securities, maturing in one year or less, amortized cost		$ 13
Available-for-sale securities, Amortized Cost		13
Available-for-sale securities, maturing in one year or less, fair value		13
Available-for-sale securities, total, fair value		$ 13
Available-for-sale securities, maturing in one year or less, weighted-average maturity in years		3 months 18 days
Available-for-sale securities, total, weighted-average maturity in years		3 months 18 days
Available-for-sale securities, maturing in one year or less, weighted-average yield	[3]	2.66%
Available-for-sale securities, total, weighted-average yield	[3]	2.66%

[1] The weighted-average maturity of total available-for-sale and held-to-maturity investment securities was 5.3 years at December 31, 2018, with a corresponding weighted-average yield of 2.53 percent.

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

[3] Weighted-average yields for obligations of state and political subdivisions are presented on a fully-taxable equivalent basis based on a federal income tax rate of 21 percent. Yields on investment securities are computed based on amortized cost balances, excluding any premiums or discounts recorded related to the transfer of investment securities at fair value from available-for-sale to held-to-maturity.

[4] Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities that take into account anticipated future prepayments.

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

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

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Fair Values of Assets and Liabilities - Differences Between Aggregate Fair Value Carrying Amount of MLHFS for which Fair Value Option has been Elected and Aggregate Unpaid Principal Amount Contractually Obligated to Receive at Maturity (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Fair Value Disclosures [Abstract]
Fair value carrying amount, total loans	$ 5,533	$ 2,035
Fair value carrying amount, nonaccrual loans	1	2
Fair value carrying amount, loans 90 days or more past due	1
Aggregate unpaid principal, total loans	5,366	1,972
Aggregate unpaid principal, nonaccrual loans	1	2
Aggregate unpaid principal, loans 90 days or more past due	1
Carrying amount over (under) unpaid principal, total loans	$ 167	$ 63

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Loans and Allowance for Credit Losses - Activity in Allowance for Credit Losses by Portfolio Class (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period	$ 4,441	$ 4,417	$ 4,357
Provision for credit losses	1,504	1,379	1,390
Loans charged-off	1,867	1,760	1,751
Less recoveries of loans charged-off	(413)	(406)	(421)
Net loans charged-off	1,454	1,354	1,330
Other changes		(1)
Balance at end of period	4,491	4,441	4,417
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period	1,454	1,372	1,450
Provision for credit losses	315	333	186
Loans charged-off	399	350	414
Less recoveries of loans charged-off	(114)	(99)	(150)
Net loans charged-off	285	251	264
Balance at end of period	1,484	1,454	1,372
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period	800	831	812
Provision for credit losses	13	(50)	19
Loans charged-off	21	9	30
Less recoveries of loans charged-off	(7)	(28)	(30)
Net loans charged-off	14	(19)
Balance at end of period	799	800	831
Residential Mortgages [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period	455	449	510
Provision for credit losses	(19)	23	(24)
Loans charged-off	34	48	65
Less recoveries of loans charged-off	(31)	(31)	(28)
Net loans charged-off	3	17	37
Balance at end of period	433	455	449
Other Retail [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period	630	678	617
Provision for credit losses	276	211	304
Loans charged-off	385	383	355
Less recoveries of loans charged-off	(126)	(124)	(112)
Net loans charged-off	259	259	243
Balance at end of period	647	630	678
Credit Card [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period	1,102	1,056	934
Provision for credit losses	919	892	908
Loans charged-off	1,028	970	887
Less recoveries of loans charged-off	(135)	(124)	(101)
Net loans charged-off	893	846	786
Balance at end of period	$ 1,128	1,102	1,056
Covered Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period		31	34
Provision for credit losses		(30)	(3)
Other changes		$ (1)
Balance at end of period			$ 31

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Short-Term Borrowings - Summary of Short-Term Borrowings (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Short-term Debt [Line Items]
Short-term borrowings	$ 23,723	$ 14,139	$ 16,651
Short-term borrowings, interest rate, at year end	1.62%	1.92%	1.31%
Short-term borrowings, average for the year	$ 18,137	$ 21,790	$ 15,022
Short-term borrowings, interest rate, average for the year	2.04%	1.78%	1.00%
Federal Funds Purchased [Member]
Short-term Debt [Line Items]
Short-term borrowings	$ 828	$ 458	$ 252
Short-term borrowings, interest rate, at year end	1.45%	2.05%	0.77%
Short-term borrowings, average for the year	$ 1,457	$ 1,070	$ 528
Short-term borrowings, interest rate, average for the year	1.94%	1.70%	0.86%
Short-term borrowings, maximum month end balance	$ 3,629	$ 4,532	$ 600
Securities Sold under Agreements to Repurchase [Member]
Short-term Debt [Line Items]
Short-term borrowings	$ 1,165	$ 2,582	$ 803
Short-term borrowings, interest rate, at year end	1.41%	2.20%	0.61%
Short-term borrowings, average for the year	$ 1,770	$ 2,279	$ 917
Short-term borrowings, interest rate, average for the year	2.00%	1.87%	0.44%
Short-term borrowings, maximum month end balance	$ 2,755	$ 3,225	$ 927
Commercial Paper [Member]
Short-term Debt [Line Items]
Short-term borrowings	$ 7,576	$ 6,940	$ 8,303
Short-term borrowings, interest rate, at year end	1.07%	1.35%	0.68%
Short-term borrowings, average for the year	$ 8,186	$ 6,929	$ 8,236
Short-term borrowings, interest rate, average for the year	1.45%	0.94%	0.49%
Short-term borrowings, maximum month end balance	$ 9,431	$ 7,846	$ 9,950
Other Short-Term Borrowings [Member]
Short-term Debt [Line Items]
Short-term borrowings	$ 14,154	$ 4,159	$ 7,293
Short-term borrowings, interest rate, at year end	1.94%	2.68%	2.13%
Short-term borrowings, average for the year	$ 6,724	$ 11,512	$ 5,341
Short-term borrowings, interest rate, average for the year	2.78%	2.27%	1.90%
Short-term borrowings, maximum month end balance	$ 14,154	$ 16,588	$ 7,293

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Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Summary of Stock Options Outstanding and Exercised Under Prior and Existing Stock Incentive Plans

The following is a summary of stock options outstanding and exercised under prior and existing stock incentive plans of the Company:

Year Ended December 31	Stock Options/Shares			Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value (in millions)
2019
Number outstanding at beginning of period		9,115,010		$	34.52
Granted(a)		—			—
Exercised		(3,333,467	)		26.36
Cancelled(b)		(63,287	)		36.74
Number outstanding at end of period(c)		5,718,256		$	39.25		4.4	$	115
Exercisable at end of period		4,869,805		$	37.67		4.0	$	105
2018
Number outstanding at beginning of period		12,668,467		$	32.15
Granted(a)		—			—
Exercised		(3,443,494	)		25.41
Cancelled(b)		(109,963	)		46.72
Number outstanding at end of period(c)		9,115,010		$	34.52		4.3	$	102
Exercisable at end of period		7,372,036		$	31.61		3.5	$	104
2017
Number outstanding at beginning of period		17,059,241		$	29.95
Granted		1,066,188			54.97
Exercised		(5,389,741	)		29.58
Cancelled(b)		(67,221	)		43.31
Number outstanding at end of period(c)		12,668,467		$	32.15		4.5	$	272
Exercisable at end of period		9,647,937		$	27.87		3.3	$	248

(a) The Company did not grant any stock option awards during 2019 and 2018.

(b) Options cancelled include both non-vested (i.e., forfeitures) and vested options.

(c) Outstanding options include stock-based awards that may be forfeited in future periods. The impact of the estimated forfeitures is reflected in compensation expense.

Weighted-Average Estimated Fair Value of Stock Options Granted and Assumptions Utilized by Company for Newly Issued Grants

The following table includes the weighted-average estimated fair value of stock options granted and the assumptions utilized by the Company for newly issued grants for the year ended December 31, 2017:

Year Ended December 31	2017
Estimated fair value	$	14.66
Risk-free interest rates		2.0	%
Dividend yield		2.6	%
Stock volatility factor		.35
Expected life of options (in years)		5.5

Summary of Certain Stock Option Activity

The following summarizes certain stock option activity of the Company:

Year Ended December 31 (Dollars in Millions)	2019		2018		2017
Fair value of options vested	$	10	$	14	$	13
Intrinsic value of options exercised		95		97		127
Cash received from options exercised		88		87		159
Tax benefit realized from options exercised		24		24		49

Stock Options Outstanding Additional Information

Additional information regarding stock options outstanding as of December 31, 2019, is as follows:

	Outstanding Options						Exercisable Options
Range of Exercise Prices	Shares		Weighted- Average Remaining Contractual Life (Years)		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price
$23.36—$25.00		236,661		.2	$	23.82		236,661	$	23.82
$25.01—$30.00		1,277,726		1.8		28.65		1,277,726		28.65
$30.01—$35.00		537,881		3.1		33.98		537,881		33.98
$35.01—$40.00		1,251,397		6.1		39.49		885,968		39.49
$40.01—$45.00		1,454,651		4.7		42.42		1,454,068		42.43
$45.01—$50.00		—		—		—		—		—
$50.01—$55.01		959,940		7.1		54.97		477,501		54.97
		5,718,256		4.4	$	39.25		4,869,805	$	37.67

Summary of Company's Restricted Shares of Stock and Unit Awards

A summary of the status of the Company’s restricted shares of stock and unit awards is presented below:

	2019					2018					2017
Year Ended December 31	Shares			Weighted- Average Grant- Date Fair Value		Shares			Weighted- Average Grant- Date Fair Value		Shares			Weighted- Average Grant- Date Fair Value
Outstanding at beginning of period		6,719,298		$	48.17		7,446,955		$	44.49		8,265,507		$	39.50
Granted		3,519,474			50.45		3,213,023			55.03		2,850,927			54.45
Vested		(3,270,778	)		48.69		(3,373,323	)		46.42		(3,295,376	)		40.66
Cancelled		(361,161	)		50.55		(567,357	)		49.07		(374,103	)		43.91
Outstanding at end of period		6,606,833		$	48.99		6,719,298		$	48.17		7,446,955		$	44.49

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Netting Arrangements for Certain Financial Instruments and Securities Financing Activities - Information on Company's Accounting Netting Adjustments and Items Not Offset in Consolidated Balance Sheet Assets But Available for Offset in Event of Default (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Offsetting [Abstract]
Derivative assets Gross Recognized Assets	$ 2,857	$ 1,987
Reverse repurchase agreements Gross Recognized Assets	1,021	205
Securities borrowed Gross Recognized Assets	1,624	1,069
Total Gross Recognized Assets	5,502	3,261
Derivative assets Gross amounts assets offset in consolidated balance sheet	(982)	(942)
Total Gross amounts assets offset in consolidated balance sheet	(982)	(942)
Derivative assets Net Amounts Presented in the Consolidated Balance Sheet	1,875	1,045
Reverse repurchase agreements Net Amounts Presented in the Consolidated Balance Sheet	1,021	205
Securities borrowed Net Amounts Presented in the Consolidated Balance Sheet	1,624	1,069
Total Net Amounts Presented in the Consolidated Balance Sheet	4,520	2,319
Derivative assets Gross financial instrument asset amounts not offset in consolidated balance sheet	(80)	(106)
Reverse repurchase agreements Gross financial instrument asset amounts not offset in consolidated balance sheet	(152)	(114)
Total Gross financial instrument asset amounts not offset in consolidated balance sheet	(232)	(220)
Derivative assets Gross collateral received amounts not offset in consolidated balance sheet	(116)	(16)
Reverse repurchase agreements Gross collateral received amounts not offset in consolidated balance sheet	(869)	(91)
Securities borrowed Gross collateral received amounts not offset in consolidated balance sheet	(1,569)	(1,039)
Total Gross collateral received amounts not offset in consolidated balance sheet	(2,554)	(1,146)
Derivative assets Net Amount	1,679	923
Securities borrowed Net Amount	55	30
Total Net Amount Assets	$ 1,734	$ 953

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Derivative Instruments - Customer-Related Derivative Positions of Company (Detail) - Customer-Related Positions [Member] - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Derivative [Line Items]
Notional Value, Assets	$ 242,263	$ 184,339
Fair Value, Assets	2,755	1,855
Notional Value, Liabilities	248,893	188,667
Fair Value, Liabilities	1,682	1,672
Interest Rate Contracts [Member] | Receive Fixed/Pay Floating Swaps [Member]
Derivative [Line Items]
Notional Value, Assets	108,560	42,054
Fair Value, Assets	$ 1,865	$ 754
Derivative Asset Average Remaining Maturity Period	4 years 9 months 29 days	6 years 8 months 23 days
Notional Value, Liabilities	$ 31,544	$ 60,731
Fair Value, Liabilities	$ 88	$ 456
Derivative Liability Average Remaining Maturity Period	3 years 9 months 29 days	4 years 3 months 25 days
Interest Rate Contracts [Member] | Pay Fixed/Receive Floating Swaps [Member]
Derivative [Line Items]
Notional Value, Assets	$ 28,150	$ 60,970
Fair Value, Assets	$ 30	$ 288
Derivative Asset Average Remaining Maturity Period	3 years 9 months 29 days	3 years 10 months 24 days
Notional Value, Liabilities	$ 101,078	$ 40,499
Fair Value, Liabilities	$ 753	$ 420
Derivative Liability Average Remaining Maturity Period	4 years 6 months 18 days	6 years 6 months 25 days
Interest Rate Contracts [Member] | Other Derivatives [Member]
Derivative [Line Items]
Notional Value, Assets	$ 6,895	$ 5,777
Fair Value, Assets	$ 1	$ 2
Derivative Asset Average Remaining Maturity Period	3 years 5 months 12 days	3 years 9 months 7 days
Notional Value, Liabilities	$ 6,218	$ 6,496
Fair Value, Liabilities	$ 2	$ 2
Derivative Liability Average Remaining Maturity Period	2 years 11 months 23 days	2 years 8 months 19 days
Interest Rate Contracts [Member] | Options [Member] | Purchased [Member]
Derivative [Line Items]
Notional Value, Assets	$ 46,406	$ 41,711
Fair Value, Assets	$ 43	$ 51
Derivative Asset Average Remaining Maturity Period	2 years 21 days	1 year 6 months 14 days
Notional Value, Liabilities	$ 12,804	$ 1,940
Fair Value, Liabilities	$ 47	$ 30
Derivative Liability Average Remaining Maturity Period	1 year 3 months	1 year 11 months 23 days
Interest Rate Contracts [Member] | Options [Member] | Written [Member]
Derivative [Line Items]
Notional Value, Assets	$ 6,901	$ 2,060
Fair Value, Assets	$ 49	$ 32
Derivative Asset Average Remaining Maturity Period	1 year 11 months 4 days	2 years 25 days
Notional Value, Liabilities	$ 49,741	$ 39,538
Fair Value, Liabilities	$ 41	$ 51
Derivative Liability Average Remaining Maturity Period	1 year 9 months 25 days	1 year 5 months 8 days
Interest Rate Contracts [Member] | Futures [Member] | Purchased [Member]
Derivative [Line Items]
Notional Value, Assets	$ 894	$ 460
Derivative Asset Average Remaining Maturity Period	2 months 15 days	1 year 6 months 29 days
Interest Rate Contracts [Member] | Futures [Member] | Written [Member]
Derivative [Line Items]
Notional Value, Assets	$ 3,874
Fair Value, Assets	$ 1
Derivative Asset Average Remaining Maturity Period	1 year 2 months 4 days
Notional Value, Liabilities	$ 1,995	$ 6,190
Fair Value, Liabilities		$ 1
Derivative Liability Average Remaining Maturity Period	1 year 14 days	7 months 2 days
Foreign Exchange Rate Contracts [Member] | Forwards, Spots and Swaps [Member]
Derivative [Line Items]
Notional Value, Assets	$ 36,350	$ 26,210
Fair Value, Assets	$ 748	$ 681
Derivative Asset Average Remaining Maturity Period	11 months 19 days	10 months 28 days
Notional Value, Liabilities	$ 36,671	$ 25,571
Fair Value, Liabilities	$ 729	$ 663
Derivative Liability Average Remaining Maturity Period	1 year 25 days	10 months 17 days
Foreign Exchange Option [Member] | Purchased [Member]
Derivative [Line Items]
Notional Value, Assets	$ 1,354	$ 2,779
Fair Value, Assets	$ 17	$ 47
Derivative Asset Average Remaining Maturity Period	6 months 14 days	9 months
Foreign Exchange Option [Member] | Written [Member]
Derivative [Line Items]
Notional Value, Liabilities	$ 1,354	$ 2,779
Fair Value, Liabilities	$ 17	$ 47
Derivative Liability Average Remaining Maturity Period	6 months 14 days	9 months
Credit Contracts [Member]
Derivative [Line Items]
Notional Value, Assets	$ 2,879	$ 2,318
Fair Value, Assets	$ 1
Derivative Asset Average Remaining Maturity Period	3 years 3 months 10 days	3 years 6 months
Notional Value, Liabilities	$ 7,488	$ 4,923
Fair Value, Liabilities	$ 5	$ 2
Derivative Liability Average Remaining Maturity Period	4 years 3 months 29 days	4 years 14 days

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Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Summary of Long-term Debt

Long-term debt (debt with original maturities of more than one year) at December 31 consisted of the following:

(Dollars in Millions)	Rate Type		Rate(a)			Maturity Date		2019		2018
U.S. Bancorp (Parent Company)
Subordinated notes		Fixed		2.950	%		2022	$	1,300	$	1,300
		Fixed		3.600	%		2024		1,000		1,000
		Fixed		7.500	%		2026		199		199
		Fixed		3.100	%		2026		1,000		1,000
		Fixed		3.000	%		2029		1,000		–
Medium-term notes		Fixed		.850% - 4.125	%		2021 - 2028		13,820		12,345
		Floating		2.576	%		2022		250		500
Other(b)									33		(53	)
Subtotal									18,602		16,291
Subsidiaries
Federal Home Loan Bank advances		Fixed		1.250% - 8.250	%		2020 - 2026		1,106		307
		Floating		2.165% - 2.461	%		2022 - 2026		3,272		4,272
Bank notes		Fixed		1.950% - 3.450	%		2020 - 2025		9,550		11,600
		Floating		.600% - 2.350	%		2020 - 2059		6,789		7,864
Other(c)									848		1,006
Subtotal									21,565		25,049
Total								$	40,167	$	41,340

(a) Weighted-average interest rates of medium-term notes, Federal Home Loan Bank advances and bank notes were 2.87 percent, 2.42 percent and 2.54 percent, respectively.

(b) Includes debt issuance fees and unrealized gains and losses and deferred amounts relating to derivative instruments.

(c) Includes consolidated community development and tax-advantaged investment VIEs, finance lease obligations, debt issuance fees, and unrealized gains and losses and deferred amounts relating to derivative instruments.

Maturities of Long-term Debt Outstanding

Maturities of long-term debt outstanding at December 31, 2019, were:

(Dollars in Millions)	Parent Company		Consolidated
2020	$	–	$	3,772
2021		2,696		9,430
2022		3,790		6,298
2023		–		2,799
2024		5,657		5,663
Thereafter		6,459		12,205
Total	$	18,602	$	40,167

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Derivative Instruments - Summary of Cumulative Hedging Adjustments and the Carrying Amount of Assets (Liabilities) Designated in Fair Value Hedges (Parenthetical) (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Fair Value Hedges [Member] | Long-term Debt Securities [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Cumulative hedging adjustment related to discontinued hedging relationships	$ (7)	$ (27)

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Mortgage Servicing Rights (Tables)

12 Months Ended

Dec. 31, 2019

Text Block [Abstract]

Changes in Fair Value of Capitalized MSRs

Changes in fair value of capitalized MSRs for the years ended December 31, are summarized as follows:

(Dollars in Millions)	2019			2018			2017
Balance at beginning of period	$	2,791		$	2,645		$	2,591
Rights purchased		20			8			13
Rights capitalized		559			397			445
Rights sold(a)		5			(27	)		–
Changes in fair value of MSRs
Due to fluctuations in market interest rates(b)		(390	)		98			(23	)
Due to revised assumptions or models(c)		23			56			18
Other changes in fair value(d)		(462	)		(386	)		(399	)
Balance at end of period	$	2,546		$	2,791		$	2,645

(a) MSRs sold in 2019 include those having a negative fair value, resulting from the related loans being severely delinquent.

(b) Includes changes in MSR value associated with changes in market interest rates, including estimated prepayment rates and anticipated earnings on escrow deposits.

(c) Includes changes in MSR value not caused by changes in market interest rates, such as changes in cost to service, ancillary income and option adjusted spread, as well as the impact of any model changes.

(d) Primarily represents changes due to realization of expected cash flows over time (decay).

Sensitivity to Changes in Interest Rates of the Fair Value of MSR Portfolio and Related Derivative Instruments

The estimated sensitivity to changes in interest rates of the fair value of the MSR portfolio and the related derivative instruments as of December 31 follows:

	2019																		2018
(Dollars in Millions)	Down 100 bps			Down 50 bps			Down 25 bps			Up 25 bps			Up 50 bps			Up 100 bps			Down 100 bps			Down 50 bps			Down 25 bps			Up 25 bps			Up 50 bps			Up 100 bps
MSR portfolio	$	(663	)	$	(316	)	$	(153	)	$	141		$	269		$	485		$	(501	)	$	(223	)	$	(105	)	$	92		$	171		$	295
Derivative instrument hedges		613			306			152			(143	)		(279	)		(550	)		455			215			104			(94	)		(177	)		(321	)
Net sensitivity	$	(50	)	$	(10	)	$	(1	)	$	(2	)	$	(10	)	$	(65	)	$	(46	)	$	(8	)	$	(1	)	$	(2	)	$	(6	)	$	(26	)

MSRs and Related Characteristics by Portfolio

A summary of the Company’s MSRs and related characteristics by portfolio as of December 31 follows:

	2019												2018
(Dollars in Millions)	HFA			Government			Conventional(d)			Total			HFA			Government			Conventional(d)			Total
Servicing portfolio(a)	$	44,906		$	35,302		$	143,310		$	223,518		$	44,384		$	35,990		$	148,910		$	229,284
Fair value	$	486		$	451		$	1,609		$	2,546		$	526		$	465		$	1,800		$	2,791
Value (bps)(b)		108			128			112			114			119			129			121			122
Weighted-average servicing fees (bps)		34			39			28			31			34			36			27			30
Multiple (value/servicing fees)		3.15			3.29			4.00			3.67			3.45			3.63			4.52			4.11
Weighted-average note rate		4.65	%		3.99	%		4.07	%		4.17	%		4.59	%		3.97	%		4.06	%		4.15	%
Weighted-average age (in years)		3.7			4.9			4.8			4.6			3.3			4.7			4.5			4.3
Weighted-average expected prepayment (constant prepayment rate)		12.2	%		13.7	%		12.2	%		12.4	%		9.8	%		11.0	%		9.1	%		9.5	%
Weighted-average expected life (in years)		6.5			5.7			5.9			6.0			7.7			6.7			7.1			7.2
Weighted-average option adjusted spread(c)		8.4	%		7.9	%		6.9	%		7.3	%		8.6	%		8.3	%		7.2	%		7.6	%

(a) Represents principal balance of mortgages having corresponding MSR asset.

(b) Calculated as fair value divided by the servicing portfolio.

(c) Option adjusted spread is the incremental spread added to the risk-free rate to reflect optionality and other risk inherent in the MSRs.

(d) Represents loans sold primarily to GSEs.

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Fair Values of Assets and Liabilities - Balances of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions		Dec. 31, 2019		Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities netting		$ (1,067)		$ (946)
Derivative assets netting		(982)		(942)
Available-for-sale securities	[1]	122,613	[2]	66,115
Mortgage loans held for sale		5,533		2,035
Mortgage servicing rights		2,546		2,791	$ 2,645	$ 2,591
Asset-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	[3]	383
Asset-Backed Securities [Member] | Collateralized Loan Obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		1
Asset-Backed Securities [Member] | Other Asset-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		382		403
Obligations of Foreign Governments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		9
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities total		916		849
Derivative assets total		1,915		1,068
Available-for-sale securities		122,613		66,115
Mortgage servicing rights		2,546		2,791
Other assets		1,875		1,665
Total		134,482		73,674
Short-term borrowings and other liabilities	[4]	1,628		1,218
Total		2,544		2,067
Fair Value, Measurements, Recurring [Member] | Netting and Collateral One [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities netting		(1,067)		(946)
Derivative assets netting		(982)		(942)
Total		(982)		(942)
Total		(1,067)		(946)
Fair Value, Measurements, Recurring [Member] | U.S. Treasury and Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		19,839		19,257
Fair Value, Measurements, Recurring [Member] | Obligations of State and Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		6,814		6,701
Fair Value, Measurements, Recurring [Member] | Residential Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		94,111		39,752
Fair Value, Measurements, Recurring [Member] | Commercial [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		1,453		2
Fair Value, Measurements, Recurring [Member] | Asset-Backed Securities [Member] | Collateralized Loan Obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		1
Fair Value, Measurements, Recurring [Member] | Asset-Backed Securities [Member] | Other Asset-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		382		403
Fair Value, Measurements, Recurring [Member] | Obligations of Foreign Governments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		9
Fair Value, Measurements, Recurring [Member] | Corporate Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		4
Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities before netting				1
Derivative assets before netting		9
Available-for-sale securities		18,986		18,585
Other assets		312		392
Total		19,307		18,977
Short-term borrowings and other liabilities	[4]	50		199
Total		50		200
Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | U.S. Treasury and Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		18,986		18,585
Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities before netting		1,612		1,291
Derivative assets before netting		1,707		1,427
Available-for-sale securities		103,618		47,530
Mortgage loans held for sale		5,533		2,035
Other assets		1,563		1,273
Total		112,421		52,265
Short-term borrowings and other liabilities	[4]	1,578		1,019
Total		3,190		2,310
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | U.S. Treasury and Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		853		672
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Obligations of State and Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		6,813		6,701
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Residential Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		94,111		39,752
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Commercial [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		1,453		2
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Asset-Backed Securities [Member] | Other Asset-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		375		403
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Obligations of Foreign Governments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		9
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Corporate Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		4
Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities before netting		371		503
Derivative assets before netting		1,181		583
Available-for-sale securities		9
Mortgage servicing rights		2,546		2,791
Total		3,736		3,374
Total		371		$ 503
Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Obligations of State and Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		1
Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Asset-Backed Securities [Member] | Collateralized Loan Obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		1
Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Asset-Backed Securities [Member] | Other Asset-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		$ 7

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

[2] The weighted-average maturity of total available-for-sale and held-to-maturity investment securities was 5.3 years at December 31, 2018, with a corresponding weighted-average yield of 2.53 percent.

[3] Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities that take into account anticipated future prepayments.

[4] Primarily represents the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.

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Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Significant Accounting Policies

  NOTE 1   Significant Accounting Policies

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

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

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

Securities

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

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

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

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

Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase Securities purchased under agreements to resell and securities sold under agreements to repurchase are accounted for as collateralized financing transactions with a receivable or payable recorded at the amounts at which the securities were acquired or sold, plus accrued interest. Collateral requirements are continually monitored and additional collateral is received or provided as required. The Company records a receivable or payable for cash collateral paid or received.

Equity Investments  

Equity investments in entities where the Company has a significant influence (generally between 20 percent and 50 percent ownership), but does not control the entity, are accounted for using the equity method. Investments in limited partnerships and similarly structured limited liability companies where the Company’s ownership interest is greater than 5 percent are accounted for using the equity method. Equity investments not using the equity method are accounted for at fair value with changes in fair value and realized gains or losses reported in noninterest income, unless fair value is not readily determinable, in which case the investment is carried at cost subject to adjustments for any observable market transactions on the same or similar instruments of the investee. Most of the Company’s equity investments do not have readily determinable fair values. All equity investments are evaluated for impairment at least annually and more frequently if certain criteria are met.

Loans

The Company offers a broad array of lending products and categorizes its loan portfolio into two segments, which is the level at which it develops and documents a systematic methodology to determine the allowance for credit losses. The Company’s two loan portfolio segments are commercial lending and consumer lending. Previously, the Company categorized loans covered under loss sharing or similar credit protection agreements with the Federal Deposit Insurance Corporation (“FDIC”), along with the related indemnification asset, in a separate covered loans segment. During 2018 the majority of these loans were sold and the loss share coverage expired. Any remaining balances were reclassified to the loan segment they would have otherwise been included in had the loss share coverage not been in place. The Company further disaggregates its loan portfolio segments into various classes based on their underlying risk characteristics. The two classes within the commercial lending segment are commercial loans and commercial real estate loans. The three classes within the consumer lending segment are residential mortgages, credit card loans and other retail loans.

The Company’s accounting methods for loans differ depending on whether the loans are originated or purchased, and

for purchased loans, whether the loans were acquired at a discount related to evidence of credit deterioration since date of origination.

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

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

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

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

Commitments to Extend Credit Unfunded commitments for residential mortgage loans intended to be held for sale are considered derivatives and recorded in other assets and other liabilities on the Consolidated Balance Sheet at fair value with

changes in fair value recorded in noninterest income. All other unfunded loan commitments are not considered derivatives and are not reported on the Consolidated Balance Sheet. For loans purchased after January 1, 2009, the fair value of the unfunded credit commitments is generally considered in the determination of the fair value of the loans recorded at the date of acquisition. Reserves for credit exposure on all other unfunded credit commitments are recorded in other liabilities.

Allowance for Credit Losses The allowance for credit losses is established for probable and estimable losses incurred in the Company’s loan and lease portfolio, including unfunded credit commitments. The allowance for credit losses is increased through provisions charged to earnings and reduced by net charge-offs. Management evaluates the appropriateness of the allowance for incurred losses on a quarterly basis.

The allowance recorded for loans in the commercial lending segment is based on reviews of individual credit relationships and considers the migration analysis of commercial lending segment loans and actual loss experience. For each loan type, this historical loss experience is adjusted as necessary to consider any relevant changes in portfolio composition, lending policies, underwriting standards, risk management practices or economic conditions. The results of the analysis are evaluated quarterly to confirm the selected loss experience is appropriate for each commercial loan type. The allowance recorded for impaired loans greater than $5 million in the commercial lending segment is based on an individual loan analysis utilizing expected cash flows discounted using the original effective interest rate, the observable market price of the loan, or the fair value of the collateral, less selling costs, for collateral-dependent loans, rather than the migration analysis. The allowance recorded for all other commercial lending segment loans is determined on a homogenous pool basis and includes consideration of product mix, risk characteristics of the portfolio, delinquency status, bankruptcy experience, portfolio growth and historical losses, adjusted for current trends. The Company also considers the impacts of any loan modifications made to commercial lending segment loans and any subsequent payment defaults to its expectations of cash flows, principal balance, and current expectations about the borrower’s ability to pay in determining the allowance for credit losses.

The allowance recorded for Troubled Debt Restructuring (“TDR”) loans and purchased impaired loans in the consumer lending segment is determined on a homogenous pool basis utilizing expected cash flows discounted using the original effective interest rate of the pool, or the prior quarter effective rate, respectively. The allowance for collateral-dependent loans in the consumer lending segment is determined based on the fair value of the collateral less costs to sell. The allowance recorded for all other consumer lending segment loans is determined on a homogenous pool basis and includes consideration of product mix, risk characteristics of the portfolio, bankruptcy experience, delinquency status, refreshed loan-to-value ratios when possible, portfolio growth and historical losses, adjusted for current trends. The Company also considers any modifications made to

consumer lending segment loans including the impacts of any subsequent payment defaults since modification in determining the allowance for credit losses, such as the borrower’s ability to pay under the restructured terms, and the timing and amount of payments.

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

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

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

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

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

is placed on nonaccrual status, unpaid accrued interest is reversed, reducing interest income in the current period.

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

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

For all loan classes, interest payments received on nonaccrual loans are generally recorded as a reduction to a loan’s carrying amount while a loan is on nonaccrual and are recognized as interest income upon payoff of the loan. However, interest income may be recognized for interest payments if the remaining carrying amount of the loan is believed to be collectible. In certain circumstances, loans in any class may be restored to accrual status, such as when a loan has demonstrated sustained repayment performance or no amounts are past due and prospects for future payment are no longer in doubt; or when the loan becomes well secured and is in the process of collection. Loans where there has been a partial charge-off may be returned to accrual status if all principal and interest (including amounts previously charged-off) is expected to be collected and the loan is current. Generally, purchased impaired loans are considered accruing loans. However, the timing and amount of future cash flows for some loans is not reasonably estimable, and those loans are classified as nonaccrual loans with interest income not 

recognized until the timing and amount of the future cash flows can be reasonably estimated.

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

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

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

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

Modifications for the consumer lending segment are generally part of programs the Company has initiated. The Company modifies residential mortgage loans under Federal Housing Administration, United States Department of Veterans Affairs, or its own internal programs. Under these programs, the Company 

offers qualifying homeowners the opportunity to permanently modify their loan and achieve more affordable monthly payments by providing loan concessions. These concessions may include adjustments to interest rates, conversion of adjustable rates to fixed rates, extension of maturity dates or deferrals of payments, capitalization of accrued interest and/or outstanding advances, or in limited situations, partial forgiveness of loan principal. In most instances, participation in residential mortgage loan restructuring programs requires the customer to complete a short-term trial period. A permanent loan modification is contingent on the customer successfully completing the trial period arrangement, and the loan documents are not modified until that time. The Company reports loans in a trial period arrangement as TDRs and continues to report them as TDRs after the trial period.

Credit card and other retail loan TDRs are generally part of distinct restructuring programs providing customers experiencing financial difficulty with modifications whereby balances may be amortized up to 60 months, and generally include waiver of fees and reduced interest rates.

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

Acquired loans restructured after acquisition are not considered TDRs for accounting and disclosure purposes if the loans evidenced credit deterioration as of the acquisition date and are accounted for in pools.

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

Factors used by the Company in determining whether all principal and interest payments due on commercial and commercial real estate loans will be collected and, therefore, whether those loans are impaired include, but are not limited to, the financial condition of the borrower, collateral and/or guarantees on the loan, and the borrower’s estimated future ability to pay based on industry, geographic location and certain financial ratios. The evaluation of impairment on residential mortgages, credit card loans and other retail loans is primarily driven by delinquency status of individual loans or whether a loan has been modified, and considers any government guarantee where applicable.

Leases The Company, as a lessor, originates retail and commercial leases either directly to the consumer or indirectly through dealer networks. Retail leases, primarily automobiles,

have 3 to 5 year terms. Commercial leases may include high dollar assets such as aircraft or lower cost items such as office equipment. At lease inception, retail lease customers are provided with an end-of-term purchase option, which is based on the expected fair value of the automobile at the expiration of the lease. Automobile leases do not typically contain options to extend or terminate the lease. Equipment leases may contain various types of purchase options. Some option amounts are a stated value, while others are determined using the fair market value at the time of option exercise.

Residual values on leased assets are reviewed regularly for impairment. Residual valuations for retail leases are based on independent assessments of expected used automobile sale prices at the end of the lease term. Impairment tests are conducted based on these valuations considering the probability of the lessee returning the asset to the Company, re-marketing efforts, insurance coverage and ancillary fees and costs. Valuations for commercial leases are based upon external or internal management appraisals. The Company manages its risk to changes in the residual value of leased vehicles, office and business equipment, and other assets through disciplined residual valuation setting at the inception of a lease, diversification of its leased assets, regular residual asset valuation reviews and monitoring of residual value gains or losses upon the disposition of assets. Retail lease residual value risk is mitigated further by the purchase of residual value insurance coverage and effective end-of-term marketing of off-lease vehicles.

The Company, as lessee, leases certain assets for use in its operations. Leased assets primarily include retail branches, operations centers and other corporate locations, and, to a lesser extent, office and computer equipment. For each lease with an original term greater than 12 months, the Company records a lease liability and a corresponding right of use (“ROU”) asset. The Company accounts for the lease and non-lease components in the majority of its lease contracts as a single lease component, with the determination of the lease liability at lease inception based on the present value of the consideration to be paid under the contract. The discount rate used by the Company is determined at commencement of the lease using a secured rate for a similar term as the period of the lease. The Company’s leases do not include significant variable lease payments.

Certain of the Company’s real estate leases include options to extend. Lease extension options are generally exercisable at market rates. Such option periods do not provide a significant incentive, and their exercise is not reasonably certain. Accordingly, the Company does not recognize payments occurring during option periods in the calculation of its ROU assets and lease liabilities.

Other Real Estate Other real estate owned (“OREO”) is included in other assets, and is property acquired through foreclosure or other proceedings on defaulted loans. OREO is initially recorded at fair value, less estimated selling costs. The fair value of OREO is evaluated regularly and any decreases in value along with holding costs, such as taxes and insurance, are reported in noninterest expense.

Loans Held For Sale

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

Where an election is made to carry the LHFS at fair value, any change in fair value is recognized in noninterest income. Where an election is made to carry LHFS at lower-of-cost-or-fair value, any further decreases are recognized in noninterest income and increases in fair value above the loan cost basis are not recognized until the loans are sold. Fair value elections are made at the time of origination or purchase based on the Company’s fair value election policy. The Company has elected fair value accounting for substantially all its mortgage loans held for sale (“MLHFS”).

Derivative Financial Instruments

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

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

If a derivative designated as a cash flow hedge is terminated or ceases to be highly effective, the gain or loss in other comprehensive income (loss) is amortized to earnings over the period the forecasted hedged transactions impact earnings. If a hedged forecasted transaction is no longer probable, hedge accounting is ceased and any gain or loss included in other

comprehensive income (loss) is reported in earnings immediately, unless the forecasted transaction is at least reasonably possible of occurring, whereby the amounts remain within other comprehensive income (loss).

Revenue Recognition

In the ordinary course of business, the Company recognizes income derived from various revenue generating activities. Certain revenues are generated from contracts where they are recognized when, or as services or products are transferred to customers for amounts the Company expects to be entitled. Revenue generating activities related to financial assets and liabilities are also recognized; including mortgage servicing fees, loan commitment fees, foreign currency remeasurements, and gains and losses on securities, equity investments and unconsolidated subsidiaries. Certain specific policies include the following:

Credit and Debit Card Revenue Credit and debit card revenue includes interchange from credit and debit cards processed through card association networks, annual fees, and other transaction and account management fees. Interchange rates are generally set by the credit card associations and based on purchase volumes and other factors. The Company records interchange as services are provided. Transaction and account management fees are recognized as services are provided, except for annual fees which are recognized over the applicable period. Costs for rewards programs and certain payments to partners and credit card associations are also recorded within credit and debit card revenue when services are provided. The Company predominately records credit and debit card revenue within the Payment Services line of business.

Corporate Payment Products Revenue Corporate payment products revenue primarily includes interchange from commercial card products processed through card association networks and revenue from proprietary network transactions. The Company records corporate payment products revenue as services are provided. Certain payments to credit card associations and customers are also recorded within corporate payment products revenue as services are provided. Corporate payment products revenue is recorded within the Payment Services line of business.

Merchant Processing Services Merchant processing services revenue consists principally of merchant discount and other transaction and account management fees charged to merchants for the electronic processing of card association network transactions, less interchange paid to the card-issuing bank, card association assessments, and revenue sharing amounts. All of these are recognized at the time the merchant’s services are performed. The Company may enter into revenue sharing agreements with referral partners or in connection with purchases of merchant contracts from sellers. The revenue sharing amounts are determined primarily on sales volume processed or revenue generated for a particular group of merchants. Merchant

processing revenue also includes revenues related to point-of-sale equipment recorded as sales when the equipment is shipped or as earned for equipment rentals. The Company records merchant processing services revenue within the Payment Services line of business.

Trust and Investment Management Fees Trust and investment management fees are recognized over the period in which services are performed and are based on a percentage of the fair value of the assets under management or administration, fixed based on account type, or transaction-based fees. Services provided to clients include trustee, transfer agent, custodian, fiscal agent, escrow, fund accounting and administration services. Services provided to mutual funds may include selling, distribution and marketing services. Trust and investment management fees are predominately recorded within the Wealth Management and Investment Services line of business.

Deposit Service Charges Deposit service charges include service charges on deposit accounts received under depository agreements with customers to provide access to deposited funds, serve as a custodian of funds, and when applicable, pay interest on deposits. Checking or savings accounts may contain fees for various services used on a day to day basis by a customer. Fees are recognized as services are delivered to and consumed by the customer, or as penalty fees are charged. Deposit service charges also include revenue generated from ATM transaction processing and settlement services which is recognized at the time the services are performed. Certain payments to partners and card associations related to ATM processing services are also recorded within deposit service charges as services are provided. Deposit service charges are reported primarily within the Consumer and Business Banking line of business.

Treasury Management Fees Treasury management fees include fees for a broad range of products and services that enables customers to manage their cash more efficiently. These products and services include cash and investment management, receivables management, disbursement services, funds transfer services, and information reporting. Revenue is recognized as products and services are provided to customers. The Company reflects a discount calculated on monthly average collected customer balances. Total treasury management fees are reported primarily within the Corporate and Commercial Banking and Consumer and Business Banking lines of business.

Commercial Products Revenue Commercial products revenue primarily includes revenue related to ancillary services provided to Corporate and Commercial Banking and Consumer and Business Banking customers, including standby letter of credit fees, non-yield related loan fees, capital markets related revenue, sales of direct financing leases, and loan and syndication fees. Sales of direct financing leases are recognized at the point of sale. In addition, the Company may lead or participate with a group of underwriters in raising investment capital on behalf of securities issuers and charge underwriting fees. These fees are recognized at securities issuance. The Company, in its role as lead underwriter, arranges deal structuring and use of outside vendors

for the underwriting group. The Company recognizes only those fees and expenses related to its underwriting commitment.

Mortgage Banking Revenue Mortgage banking revenue includes revenue derived from mortgages originated and subsequently sold, generally with servicing retained. The primary components include: gains and losses on mortgage sales; servicing revenue; changes in fair value for mortgage loans originated with the intent to sell and measured at fair value under the fair value option; changes in fair value for derivative commitments to purchase and originate mortgage loans; changes in the fair value of mortgage servicing rights (“MSRs”); and the impact of risk management activities associated with the mortgage origination pipeline, funded loans and MSRs. Net interest income from mortgage loans is recorded in interest income. Refer to Other Significant Policies in Note 1, as well as Note 9 and Note 21 for a further discussion of MSRs. Mortgage banking revenue is reported within the Consumer and Business Banking line of business.

Investment Products Fees Investment products fees include commissions related to the execution of requested security trades, distribution fees from sale of mutual funds, and investment advisory fees. Commissions and investment advisory fees are recognized as services are delivered to and utilized by the customer. Distribution fees are received over time, are dependent on the consumer maintaining their mutual fund asset position and the value of such position. These revenues are estimated and recognized at the point a significant reversal of revenue becomes remote. Investment products fees are predominately reported within the Wealth Management and Investment Services line of business.

Other Noninterest Income Other noninterest income is primarily related to financial assets including income on unconsolidated subsidiaries and equity method investments, gains on sale of other investments and corporate owned life insurance proceeds. The Company reports other noninterest income across all lines of business.

Other Significant Policies

Goodwill and Other Intangible Assets Goodwill is recorded on acquired businesses if the purchase price exceeds the fair value of the net assets acquired. Other intangible assets are recorded at their fair value upon completion of a business acquisition or certain other transactions, and generally represent the value of customer contracts or relationships. Goodwill is not amortized but is subject, at a minimum, to annual tests for impairment at a reporting unit level. In certain situations, an interim impairment test may be required if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Other intangible assets are amortized over their estimated useful lives, using straight-line and accelerated methods and are subject to impairment if events or circumstances indicate a possible inability to realize the carrying amount. Determining the amount of goodwill impairment, if any,

includes assessing the current implied fair value of the reporting unit as if it were being acquired in a business combination and comparing it to the carrying amount of the reporting unit’s goodwill. Determining the amount of other intangible asset impairment, if any, includes assessing the present value of the estimated future cash flows associated with the intangible asset and comparing it to the carrying amount of the asset.

Income Taxes Deferred taxes are recorded to reflect the tax consequences on future years of differences between the tax basis of assets and liabilities and their financial reporting carrying amounts. The Company uses the deferral method of accounting on investments that generate investment tax credits. Under this method, the investment tax credits are recognized as a reduction to the related asset. For certain investments in qualified affordable housing projects, the Company presents the expense in tax expense rather than noninterest expense.

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

Pensions For purposes of its pension plans, the Company utilizes its fiscal year-end as the measurement date. At the measurement date, plan assets are determined based on fair value, generally representing observable market prices or the net asset value provided by the funds’ trustee or administrator. The actuarial cost method used to compute the pension liabilities and related expense is the projected unit credit method. The projected benefit obligation is principally determined based on the present value of projected benefit distributions at an assumed discount rate. The discount rate utilized is based on the investment yield of high quality corporate bonds available in the marketplace with maturities equal to projected cash flows of future benefit payments as of the measurement date. Periodic pension expense (or income) includes service costs, interest costs based on the assumed discount rate, the expected return on plan assets based on an actuarially derived market-related value and amortization of actuarial gains and losses. Service cost is included in employee benefits expense on the Consolidated Statement of Income, with all other components of periodic pension expense included in other noninterest expense on the Consolidated Statement of Income. Pension accounting reflects the long-term nature of benefit obligations and the investment horizon of plan assets, and can have the effect of reducing earnings volatility related to short-term changes in interest rates and market valuations. Actuarial gains and losses include the impact of plan amendments and various unrecognized gains and losses which are deferred and amortized over the future service periods of active employees. The market-related value utilized to determine the expected return on

plan assets is based on fair value adjusted for the difference between expected returns and actual performance of plan assets. The unrealized difference between actual experience and expected returns is included in expense over a period of approximately fifteen years. The overfunded or underfunded status of the plans is recorded as an asset or liability on the Consolidated Balance Sheet, with changes in that status recognized through other comprehensive income (loss).

Premises and Equipment Premises and equipment are stated at cost less accumulated depreciation and depreciated primarily on a straight-line basis over the estimated life of the assets. Estimated useful lives range up to 40 years for newly constructed buildings and from 3 to 25 years for furniture and equipment.

The Company, as lessee, records an ROU asset for each lease with an original term greater than 12 months. ROU assets are included in premises and equipment, with the corresponding lease liabilities included in long-term debt and other liabilities.

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

Per Share Calculations Earnings per common share is calculated using the two-class method under which earnings are allocated to common shareholders and holders of participating securities. Unvested stock-based compensation awards that contain nonforfeitable rights to dividends or dividend equivalents are considered participating securities under the two-class method. Net income applicable to U.S. Bancorp common shareholders is then divided by the weighted-average number of common shares outstanding to determine earnings per common share. Diluted earnings per common share is calculated by adjusting income and outstanding shares, assuming conversion of all potentially dilutive securities.

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Guarantees and Contingent Liabilities (Tables)

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Contract or Notional Amounts of Unfunded Commitments to Extend Credit

The contract or notional amounts of unfunded commitments to extend credit at December 31, 2019, excluding those commitments considered derivatives, were as follows:

	Term
(Dollars in Millions)	Less Than One Year		Greater Than One Year		Total
Commercial and commercial real estate loans	$	31,235	$	108,303	$	139,538
Corporate and purchasing card loans(a)		29,296		–		29,296
Residential mortgages		416		1		417
Retail credit card loans(a)		111,773		–		111,773
Other retail loans		12,614		24,183		36,797
Other		6,325		–		6,325

(a) Primarily cancelable at the Company’s discretion.

Summary of Other Guarantees and Contingent Liabilities

The following table is a summary of other guarantees and contingent liabilities of the Company at December 31, 2019:

(Dollars in Millions)	Collateral Held		Carrying Amount		Maximum Potential Future Payments
Standby letters of credit	$	–	$	48	$	10,258
Third-party borrowing arrangements		–		–		7
Securities lending indemnifications		4,564		–		4,468
Asset sales		–		68		5,069
Merchant processing		589		61		108,875
Tender option bond program guarantee		2,994		–		2,725
Minimum revenue guarantees		–		–		3
Other		–		71		1,461

Contract or Notional Amount of Letters of Credit

The contract or notional amount of letters of credit at December 31, 2019, were as follows:

	Term
(Dollars in Millions)	Less Than One Year		Greater Than One Year		Total
Standby	$	4,676	$	5,582	$	10,258
Commercial		339		28		367

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Netting Arrangements for Certain Financial Instruments and Securities Financing Activities - Information on Company's Accounting Netting Adjustments and Items Not Offset in Consolidated Balance Sheet Liabilities But Available for Offset in Event of Default (Parenthetical) (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Offsetting [Abstract]
Cash collateral netted against derivative liabilities	$ 514	$ 240
Derivative liabilities not subject to netting arrangements	$ 167	$ 85

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Restrictions on Cash and Due from Banks - Additional Information (Detail) - USD ($) $ in Billions	Dec. 31, 2019	Dec. 31, 2018
Cash and Cash Equivalents [Abstract]
Minimum Average Reserve Balances Required By Banking Regulators	$ 3.2	$ 3.1
Balances held at the federal reserve and other financial institutions	$ 8.0	$ 7.5

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Consolidated Statement of Comprehensive Income - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Statement of Comprehensive Income [Abstract]
Net income	$ 6,946	$ 7,124	$ 6,253
Other Comprehensive Income (Loss)
Changes in unrealized gains and losses on investment securities available-for-sale	1,693	(656)	178
Unrealized gains and losses on held-to-maturity investment securities transferred to available-for-sale	141
Changes in unrealized gains and losses on derivative hedges	(229)	39	(5)
Foreign currency translation	26	3	(2)
Changes in unrealized gains and losses on retirement plans	(380)	(302)	(41)
Reclassification to earnings of realized gains and losses	20	93	77
Income taxes related to other comprehensive income (loss)	(322)	205	(76)
Total other comprehensive income (loss)	949	(618)	131
Comprehensive income	7,895	6,506	6,384
Comprehensive (income) loss attributable to noncontrolling interests	(32)	(28)	(35)
Comprehensive income attributable to U.S. Bancorp	$ 7,863	$ 6,478	$ 6,349

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Cover Page - USD ($) $ in Billions	12 Months Ended
	Dec. 31, 2019	Jan. 31, 2020	Jun. 30, 2019
Document Information [Line Items]
Document Type	10-K
Entity Registrant Name	US BANCORP \DE\
Document Period End Date	Dec. 31, 2019
Entity Filer Category	Large Accelerated Filer
Entity Shell Company	false
Entity Current Reporting Status	Yes
Entity Smaller Reporting Company	false
Entity Emerging Growth Company	false
Document Transition Report	false
Document Annual Report	true
Entity File Number	1-6880
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	41-0255900
Entity Interactive Data Current	Yes
Entity Address, Postal Zip Code	55402
Entity Address, City or Town	Minneapolis
Entity Address, State or Province	MN
Entity Address, Address Line One	800 Nicollet Mall
City Area Code	651
Local Phone Number	466-3000
Entity Common Stock, Shares Outstanding		1,522,494,686
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Entity Central Index Key	0000036104
Current Fiscal Year End Date	--12-31
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes
Entity Public Float			$ 83.0
Common Stock [Member]
Document Information [Line Items]
Trading Symbol	USB
Title of 12(b) Security	Common Stock
Security Exchange Name	NYSE
Series A Preferred Stock [Member]
Document Information [Line Items]
Trading Symbol	USB PrA
Title of 12(b) Security	Depositary Shares
Security Exchange Name	NYSE
Series B Preferred Stock [Member]
Document Information [Line Items]
Trading Symbol	USB PrH
Title of 12(b) Security	Depositary Shares
Security Exchange Name	NYSE
Series F Preferred Stock [Member]
Document Information [Line Items]
Trading Symbol	USB PrM
Title of 12(b) Security	Depositary Shares
Security Exchange Name	NYSE
Series H Preferred Stock [Member]
Document Information [Line Items]
Trading Symbol	USB PrO
Title of 12(b) Security	Depositary Shares
Security Exchange Name	NYSE
Series K Preferred Stock [Member]
Document Information [Line Items]
Trading Symbol	USB PrP
Title of 12(b) Security	Depositary Shares
Security Exchange Name	NYSE
Series X [Member]
Document Information [Line Items]
Trading Symbol	USB/24B
Title of 12(b) Security	Medium-Term Notes
Security Exchange Name	NYSE

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Accounting for Transfers and Servicing of Financial Assets and Variable Interest Entities - Additional Information (Detail) - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2019		Dec. 31, 2018	Dec. 31, 2017
Variable Interest Entity [Line Items]
Assets related to consolidated VIEs		$ 495,426		$ 467,374
Liabilities related to consolidated VIEs		442,943		415,717
Available-for-sale securities	[1]	122,613	[2]	66,115
Held-to-maturity scurities				46,050
Minimum [Member]
Variable Interest Entity [Line Items]
Aggregate amount of investments in unconsolidated VIEs		1		1
Maximum [Member]
Variable Interest Entity [Line Items]
Aggregate amount of investments in unconsolidated VIEs		87		95
Financial Support Waived Fees [Member]
Variable Interest Entity [Line Items]
Financial or other support to money market funds		30		25	$ 23
Private Investment Funds and Partnerships [Member]
Variable Interest Entity [Line Items]
Investment carrying amount		31		27
Maximum exposure to loss		55		52
Community Development and Tax Advantaged Investments [Member]
Variable Interest Entity [Line Items]
Federal and state income tax credits recognized in tax expense		615		689	711
Expense related to investments		557		604	741
Investment tax credits		506		639	1,500
Expenses related to investments recognized in tax expense		318		275	$ 317
Investment carrying amount		6,148		5,823
Maximum exposure to loss		12,118		12,360
Community Development and Tax Advantaged Investments [Member] | Variable Interest Entity [Member]
Variable Interest Entity [Line Items]
Assets related to consolidated VIEs		4,000		3,900
Liabilities related to consolidated VIEs		3,200		2,700
Conduit [Member]
Variable Interest Entity [Line Items]
Available-for-sale securities		12
Held-to-maturity scurities				14
Tender Option Bond Program [Member] | Variable Interest Entity [Member]
Variable Interest Entity [Line Items]
Assets related to consolidated VIEs		3,000		2,400
Liabilities related to consolidated VIEs		$ 2,700		$ 2,300

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

[2] The weighted-average maturity of total available-for-sale and held-to-maturity investment securities was 5.3 years at December 31, 2018, with a corresponding weighted-average yield of 2.53 percent.

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U.S. Bancorp (Parent Company) - Condensed Statement of Financial Position of Parent Company Only (Detail) - USD ($) $ in Millions		Dec. 31, 2019		Dec. 31, 2018	Dec. 31, 2017
Assets
Available-for-sale securities	[1]	$ 122,613	[2]	$ 66,115
Other assets		36,168		33,645
Total assets		495,426		467,374
Liabilities and Shareholders' Equity
Short-term funds borrowed		23,723		14,139	$ 16,651
Long-term debt		40,167		41,340
Other liabilities		17,137		14,763
Shareholders' equity		51,853		51,029
Total liabilities and equity		495,426		467,374
Parent Company [Member]
Assets
Due from banks, principally interest-bearing		11,583		9,969
Available-for-sale securities		1,631		921
Other assets		1,211		813
Total assets		71,386		68,163
Liabilities and Shareholders' Equity
Short-term funds borrowed		8
Long-term debt		18,602		16,291
Other liabilities		923		843
Shareholders' equity		51,853		51,029
Total liabilities and equity		71,386		68,163
Bank Subsidiaries [Member] | Parent Company [Member]
Assets
Investments in subsidiaries		48,518		47,549
Advances to subsidiaries		3,850		3,800
Nonbank Subsidiaries [Member] | Parent Company [Member]
Assets
Investments in subsidiaries		3,128		2,568
Advances to subsidiaries		$ 1,465		$ 2,543

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

[2] The weighted-average maturity of total available-for-sale and held-to-maturity investment securities was 5.3 years at December 31, 2018, with a corresponding weighted-average yield of 2.53 percent.

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Loans and Allowance for Credit Losses - Summary of Impaired Loans, which Include Nonaccrual and TDR Loans, by Portfolio Class (Parenthetical) (Detail) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
Loan and Lease Receivables, Impaired [Abstract]
Interest income recognized on impaired loans	$ 194
Interest income that would have been recognized on impaired loans at original contractual loan terms	$ 246

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Loans and Allowance for Credit Losses - Summary of Loans by Portfolio Class, Including Delinquency Status of those that Continue to Accrue Interest and are Nonperforming (Parenthetical) (Detail) - Government National Mortgage Association [Member] - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans 30-89 days past due purchased from Government National Mortgage Association mortgage pools, classified as current	$ 428	$ 430
Loans 90 days or more past due purchased from Government National Mortgage Association mortgage pools, classified as current	$ 1,700	$ 1,700

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Leases - Contractual Future Lease Payments to be Received (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Leases [Abstract]
Sales-type and direct finance leases, 2020	$ 4,755
Sales-type and direct finance leases, 2021	3,729
Sales-type and direct finance leases, 2022	2,766
Sales-type and direct finance leases, 2023	1,248
Sales-type and direct finance leases, 2024	382
Sales-type and direct finance leases, thereafter	483
Sales-type and direct finance leases, lease payments	13,363
Sales-type and direct finance leases, amounts representing interest	(1,039)
Sales-type and direct finance leases, lease receivables	12,324	$ 12,207
Operating leases, 2020	176
Operating leases, 2021	142
Operating leases, 2022	103
Operating leases, 2023	69
Operating leases, 2024	50
Operating leases, thereafter	52
Operating leases, lease payments	$ 592

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Leases - Additional Information (Detail) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
Operating Leased Assets [Line Items]
Lease revenue	$ 996
Right of use lease assets	1,300
Lease liabilities	1,400
Lease cost	$ 394

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Mortgage Servicing Rights - Changes in Fair Value of Capitalized MSRs (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Transfers and Servicing of Financial Assets [Abstract]
Balance at beginning of period	$ 2,791	$ 2,645	$ 2,591
Rights purchased	20	8	13
Rights capitalized	559	397	445
Rights sold	5	(27)
Changes in fair value of MSRs
Due to fluctuations in market interest rates	(390)	98	(23)
Due to revised assumptions or models	23	56	18
Other changes in fair value	(462)	(386)	(399)
Balance at end of period	$ 2,546	$ 2,791	$ 2,645

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Employee Benefits - Weighted Average Assumptions to Determine Projected Benefit Obligations (Detail)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Projected Benefit Obligation Assumptions [Member] | Prior to age 65 [Member]
Health care cost trend rate
Health care cost trend rate	6.25%	6.50%
Projected Benefit Obligation Assumptions [Member] | After age 65 [Member]
Health care cost trend rate
Health care cost trend rate	6.25%	10.00%
Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Discount rate	3.40%	4.45%
Cash balance interest crediting rate	3.00%	3.00%
Rate of compensation increase	3.56%	3.52%
Postretirement Welfare Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Discount rate	2.80%	4.05%

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Deposits

12 Months Ended

Dec. 31, 2019

Banking and Thrift [Abstract]

Deposits

  NOTE 11   Deposits

The composition of deposits at December 31 was as follows:

(Dollars in Millions)	2019		2018
Noninterest-bearing deposits	$	75,590	$	81,811
Interest-bearing deposits
Interest checking		75,949		73,994
Money market savings		120,082		100,396
Savings accounts		47,401		44,720
Time deposits		42,894		44,554
Total interest-bearing deposits		286,326		263,664
Total deposits	$	361,916	$	345,475

The maturities of time deposits outstanding at December 31, 2019 were as follows:

(Dollars in Millions)
2020	$	37,731
2021		2,700
2022		1,183
2023		673
2024		602
Thereafter		5
Total	$	42,894

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Restrictions on Cash and Due from Banks

12 Months Ended

Dec. 31, 2019

Text Block [Abstract]

Restrictions on Cash and Due from Banks

NOTE 3	Restrictions on Cash and Due from
	Banks

Banking regulators require bank subsidiaries to maintain minimum average reserve balances, either in the form of vault cash or reserve balances held with central banks or other financial institutions. The amount of required reserve balances were approximately $3.2 billion and $3.1 billion at December 31, 2019 and 2018, respectively, and primarily represent those required to be held at the Federal Reserve Bank. In addition to vault cash, the Company held balances at the Federal Reserve Bank and other financial institutions of $8.0 billion and $7.5 billion at December 31, 2019 and 2018, respectively, to meet these requirements. These balances are included in cash and due from banks on the Consolidated Balance Sheet.

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Employee Benefits - Summary of Changes in Projected Benefit Obligation, Plan Assets, Funded Status, Amounts Recognized in Consolidated Balance Sheet and Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Pension Plans [Member]
Change In Projected Benefit Obligation
Benefit obligation at beginning of measurement period	$ 5,507	$ 5,720
Service cost	192	208	$ 187
Interest cost	249	224	220
Actuarial loss (gain)	1,100	(440)
Lump sum settlements	(56)	(50)
Benefit payments	(163)	(155)
Benefit obligation at end of measurement period	6,829	5,507	5,720
Change In Fair Value Of Plan Assets
Balance at beginning of period	4,936	5,482
Actual return on plan assets	1,095	(365)
Employer contributions	26	24
Lump sum settlements	(56)	(50)
Benefit payments	(163)	(155)
Balance at end of period	5,838	4,936	5,482
Funded (Unfunded) Status	(991)	(571)
Current benefit liability	(25)	(23)
Noncurrent benefit liability	(966)	(548)
Recognized amount	(991)	(571)
Net actuarial gain (loss)	(2,271)	(1,981)
Recognized amount	(2,271)	(1,981)
Postretirement Welfare Plan [Member]
Change In Projected Benefit Obligation
Benefit obligation at beginning of measurement period	54	68
Interest cost	2	2	2
Participants' contributions	7	8
Actuarial loss (gain)	(4)	(7)
Benefit payments	(13)	(18)
Federal subsidy on benefits paid	1	1
Benefit obligation at end of measurement period	47	54	68
Change In Fair Value Of Plan Assets
Balance at beginning of period	81	87
Actual return on plan assets	6
Employer contributions	4	5
Participants' contributions	6	7
Benefit payments	(13)	(18)
Balance at end of period	84	81	$ 87
Funded (Unfunded) Status	37	27
Noncurrent benefit asset	37	27
Recognized amount	37	27
Net actuarial gain (loss)	68	66
Net prior service credit (cost)	14	18
Recognized amount	$ 82	$ 84

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Accounting for Transfers and Servicing of Financial Assets and Variable Interest Entities

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Accounting for Transfers and Servicing of Financial Assets and Variable Interest Entities

NOTE 7	Accounting for Transfers and Servicing of Financial Assets and Variable Interest
	Entities

The Company transfers financial assets in the normal course of business. The majority of the Company’s financial asset transfers are residential mortgage loan sales primarily to government-sponsored enterprises (“GSEs”), transfers of tax-advantaged investments, commercial loan sales through participation agreements, and other individual or portfolio loan and securities sales. In accordance with the accounting guidance for asset transfers, the Company considers any ongoing involvement with transferred assets in determining whether the assets can be derecognized from the balance sheet. Guarantees provided to certain third parties in connection with the transfer of assets are further discussed in Note 22.

For loans sold under participation agreements, the Company also considers whether the terms of the loan participation agreement meet the accounting definition of a participating interest. With the exception of servicing and certain performance-based guarantees, the Company’s continuing involvement with financial assets sold is minimal and generally limited to market customary representation and warranty clauses. Any gain or loss on sale depends on the previous carrying amount of the transferred financial assets, the consideration received, and any liabilities incurred in exchange for the transferred assets. Upon transfer, any servicing assets and other interests that continue to be held by the Company are initially recognized at fair value. For further information on MSRs, refer to Note 9. On a limited basis, the Company may acquire and package high-grade corporate bonds for select corporate customers, in which the Company generally has no continuing involvement with these transactions. Additionally, the Company is an authorized GNMA issuer and issues GNMA securities on a regular basis. The Company has no other asset securitizations or similar asset-backed financing arrangements that are off-balance sheet.

The Company also provides financial support primarily through the use of waivers of trust and investment management fees associated with various unconsolidated registered money market funds it manages. The Company provided $30 million, $25 million, and $23 million of support to the funds during the years ended December 31, 2019, 2018 and 2017, respectively.

The Company is involved in various entities that are considered to be VIEs. The Company’s investments in VIEs are

primarily related to investments promoting affordable housing, community development and renewable energy sources. Some of these tax-advantaged investments support the Company’s regulatory compliance with the Community Reinvestment Act. The Company’s investments in these entities generate a return primarily through the realization of federal and state income tax credits, and other tax benefits, such as tax deductions from operating losses of the investments, over specified time periods. These tax credits are recognized as a reduction of tax expense or, for investments qualifying as investment tax credits, as a reduction to the related investment asset. The Company recognized federal and state income tax credits related to its affordable housing and other tax-advantaged investments in tax expense of $615 million, $689 million and $711 million for the years ended December 31, 2019, 2018 and 2017, respectively. The Company also recognized $506 million, $639 million and $1.5 billion of investment tax credits for the years ended December 31, 2019, 2018 and 2017, respectively. The Company recognized $557 million, $604 million and $741 million of expenses related to all of these investments for the years ended December 31, 2019, 2018 and 2017, respectively, of which $318 million, $275 million and $317 million, respectively, were included in tax expense and the remaining amounts were included in noninterest expense.

The Company is not required to consolidate VIEs in which it has concluded it does not have a controlling financial interest, and thus is not the primary beneficiary. In such cases, the Company does not have both the power to direct the entities’ most significant activities and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs.

The Company’s investments in these unconsolidated VIEs are carried in other assets on the Consolidated Balance Sheet. The Company’s unfunded capital and other commitments related to these unconsolidated VIEs are generally carried in other liabilities on the Consolidated Balance Sheet. The Company’s maximum exposure to loss from these unconsolidated VIEs include the investment recorded on the Company’s Consolidated Balance Sheet, net of unfunded capital commitments, and previously recorded tax credits which remain subject to recapture

by taxing authorities based on compliance features required to be met at the project level. While the Company believes potential losses from these investments are remote, the maximum exposure was determined by assuming a scenario where the community-based business and housing projects completely fail and do not meet certain government compliance requirements resulting in recapture of the related tax credits. 

The following table provides a summary of investments in community development and tax-advantaged VIEs that the Company has not consolidated:

At December 31 (Dollars in Millions)	2019		2018
Investment carrying amount	$	6,148	$	5,823
Unfunded capital and other commitments		2,938		2,778
Maximum exposure to loss		12,118		12,360

The Company also has noncontrolling financial investments in private investment funds and partnerships considered to be VIEs, which are not consolidated. The Company’s recorded investment in these entities, carried in other assets on the Consolidated Balance Sheet, was approximately $31 million at December 31, 2019 and $27 million at December 31, 2018. The maximum exposure to loss related to these VIEs was $55 million at December 31, 2019 and $52 million at December 31, 2018, representing the Company’s investment balance and its unfunded commitments to invest additional amounts.

The Company’s individual net investments in unconsolidated VIEs, which exclude any unfunded capital commitments, ranged from less than $1 million to $87 million at December 31, 2019, compared with less than $1 million to $95 million at December 31, 2018.

The Company is required to consolidate VIEs in which it has concluded it has a controlling financial interest. The Company sponsors entities to which it transfers its interests in tax-advantaged investments to third parties. At December 31,

2019, approximately $4.0 billion of the Company’s assets and $3.2 billion of its liabilities included on the Consolidated Balance Sheet were related to community development and tax-advantaged investment VIEs which the Company has consolidated, primarily related to these transfers. These amounts compared to $3.9 billion and $2.7 billion, respectively, at December 31, 2018. The majority of the assets of these consolidated VIEs are reported in other assets, and the liabilities are reported in long-term debt and other liabilities. The assets of a particular VIE are the primary source of funds to settle its obligations. The creditors of the VIEs do not have recourse to the general credit of the Company. The Company’s exposure to the consolidated VIEs is generally limited to the carrying value of its variable interests plus any related tax credits previously recognized or transferred to others with a guarantee.

The Company also sponsors a conduit to which it previously transferred high-grade investment securities. The Company consolidates the conduit because of its ability to manage the activities of the conduit. At December 31, 2019, $12 million of the available-for-sale investment securities on the Company’s Consolidated Balance Sheet were related to the conduit, compared with $14 million of the held-to-maturity investment securities at December 31, 2018.

In addition, the Company sponsors a municipal bond securities tender option bond program. The Company controls the activities of the program’s entities, is entitled to the residual returns and provides liquidity and remarketing arrangements to the program. As a result, the Company has consolidated the program’s entities. At December 31, 2019, $3.0 billion of available-for-sale investment securities and $2.7 billion of short-term borrowings on the Consolidated Balance Sheet were related to the tender option bond program, compared with $2.4 billion of available-for-sale investment securities and $2.3 billion of short-term borrowings at December 31, 2018.

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Shareholders' Equity - Components of Company's Regulatory Capital Requirements Under Banking Regulations (Detail) (Parenthetical)	Dec. 31, 2019	Dec. 31, 2018
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Capital conservation buffer ratio	2.50%	1.875%

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Loans and Allowance for Credit Losses (Tables)

12 Months Ended

Dec. 31, 2019

Receivables [Abstract]

Composition of Loan Portfolio

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

(Dollars in Millions)	2019		2018
Commercial
Commercial	$	98,168	$	96,849
Lease financing		5,695		5,595
Total commercial		103,863		102,444
Commercial Real Estate
Commercial mortgages		29,404		28,596
Construction and development		10,342		10,943
Total commercial real estate		39,746		39,539
Residential Mortgages
Residential mortgages		59,865		53,034
Home equity loans, first liens		10,721		12,000
Total residential mortgages		70,586		65,034
Credit Card		24,789		23,363
Other Retail
Retail leasing		8,490		8,546
Home equity and second mortgages		15,036		16,122
Revolving credit		2,899		3,088
Installment		11,038		9,676
Automobile		19,435		18,719
Student		220		279
Total other retail		57,118		56,430
Total loans	$	296,102	$	286,810

Activity in Allowance for Credit Losses by Portfolio Class

Activity in the allowance for credit losses by portfolio class was as follows:

(Dollars in Millions)	Commercial			Commercial Real Estate			Residential Mortgages			Credit Card			Other Retail			Covered Loans			Total Loans
Balance at December 31, 2018
Balance at beginning of period	$	1,454		$	800		$	455		$	1,102		$	630		$	–		$	4,441
Add
Provision for credit losses		315			13			(19	)		919			276			–			1,504
Deduct
Loans charged-off		399			21			34			1,028			385			–			1,867
Less recoveries of loans charged-off		(114	)		(7	)		(31	)		(135	)		(126	)		–			(413	)
Net loans charged-off		285			14			3			893			259			–			1,454
Balance at December 31, 2019	$	1,484		$	799		$	433		$	1,128		$	647		$	–		$	4,491
Balance at December 31, 2017
Balance at beginning of period	$	1,372		$	831		$	449		$	1,056		$	678		$	31		$	4,417
Add
Provision for credit losses		333			(50	)		23			892			211			(30	)		1,379
Deduct
Loans charged-off		350			9			48			970			383			–			1,760
Less recoveries of loans charged-off		(99	)		(28	)		(31	)		(124	)		(124	)		–			(406	)
Net loans charged-off		251			(19	)		17			846			259			–			1,354
Other changes(a)		–			–			–			–			–			(1	)		(1	)
Balance at December 31, 2018	$	1,454		$	800		$	455		$	1,102		$	630		$	–		$	4,441
Balance at December 31, 2016
Balance at beginning of period	$	1,450		$	812		$	510		$	934		$	617		$	34		$	4,357
Add
Provision for credit losses		186			19			(24	)		908			304			(3	)		1,390
Deduct
Loans charged-off		414			30			65			887			355			–			1,751
Less recoveries of loans charged-off		(150	)		(30	)		(28	)		(101	)		(112	)		–			(421	)
Net loans charged-off		264			–			37			786			243			–			1,330
Balance at December 31, 2017	$	1,372		$	831		$	449		$	1,056		$	678		$	31		$	4,417

(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. 

Additional Detail of Allowance for Credit Losses and Related Loan Balances by Portfolio Class

Additional detail of the allowance for credit losses by portfolio class was as follows:

(Dollars in Millions)	Commercial		Commercial Real Estate		Residential Mortgages		Credit Card		Other Retail		Total Loans
Allowance Balance at December 31, 2019 Related to
Loans individually evaluated for impairment(a)	$	16	$	3	$	–	$	–	$	–	$	19
TDRs collectively evaluated for impairment		20		3		109		81		10		223
Other loans collectively evaluated for impairment		1,448		793		309		1,047		637		4,234
Loans acquired with deteriorated credit quality		–		–		15		–		–		15
Total allowance for credit losses	$	1,484	$	799	$	433	$	1,128	$	647	$	4,491
Allowance Balance at December 31, 2018 Related to
Loans individually evaluated for impairment(a)	$	16	$	8	$	–	$	–	$	–	$	24
TDRs collectively evaluated for impairment		15		3		126		69		12		225
Other loans collectively evaluated for impairment		1,423		788		314		1,033		618		4,176
Loans acquired with deteriorated credit quality		–		1		15		–		–		16
Total allowance for credit losses	$	1,454	$	800	$	455	$	1,102	$	630	$	4,441

(a) Represents the allowance for credit losses related to loans greater than $5 million classified as nonperforming or TDRs.

Additional detail of loan balances by portfolio class was as follows:

(Dollars in Millions)	Commercial		Commercial Real Estate		Residential Mortgages		Credit Card		Other Retail		Total Loans
December 31, 2019
Loans individually evaluated for impairment(a)	$	253	$	61	$	–	$	–	$	–	$	314
TDRs collectively evaluated for impairment		163		138		3,044		263		185		3,793
Other loans collectively evaluated for impairment		103,447		39,513		67,315		24,526		56,933		291,734
Loans acquired with deteriorated credit quality		–		34		227		–		–		261
Total loans	$	103,863	$	39,746	$	70,586	$	24,789	$	57,118	$	296,102
December 31, 2018
Loans individually evaluated for impairment(a)	$	262	$	86	$	–	$	–	$	–	$	348
TDRs collectively evaluated for impairment		151		129		3,252		245		183		3,960
Other loans collectively evaluated for impairment		102,031		39,297		61,465		23,118		56,247		282,158
Loans acquired with deteriorated credit quality		–		27		317		–		–		344
Total loans	$	102,444	$	39,539	$	65,034	$	23,363	$	56,430	$	286,810

(a) Represents loans greater than $5 million classified as nonperforming or TDRs.

Summary of Loans by Portfolio Class, Including Delinquency Status of those that Continue to Accrue Interest and are Nonperforming

The following table provides a summary of loans by portfolio class, including the delinquency status of those that continue to accrue interest, and those that are nonperforming:

	Accruing
(Dollars in Millions)	Current		30-89 Days Past Due		90 Days or More Past Due		Nonperforming		Total
December 31, 2019
Commercial	$	103,273	$	307	$	79	$	204	$	103,863
Commercial real estate		39,627		34		3		82		39,746
Residential mortgages(a)		70,071		154		120		241		70,586
Credit card		24,162		321		306		–		24,789
Other retail		56,463		393		97		165		57,118
Total loans	$	293,596	$	1,209	$	605	$	692	$	296,102
December 31, 2018
Commercial	$	101,844	$	322	$	69	$	209	$	102,444
Commercial real estate		39,354		70		–		115		39,539
Residential mortgages(a)		64,443		181		114		296		65,034
Credit card		22,746		324		293		–		23,363
Other retail		55,722		403		108		197		56,430
Total loans	$	284,109	$	1,300	$	584	$	817	$	286,810

(a) At December 31, 2019, $428 million of loans 30–89 days past due and $1.7 billion of loans 90 days or more past due purchased from Government National Mortgage Association (“GNMA”) mortgage pools whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs, were classified as current, compared with $430 million and $1.7 billion at December 31, 2018, respectively.

Summary of Loans by Portfolio Class and Company's Internal Credit Quality Rating

The following table provides a summary of loans by portfolio class and the Company’s internal credit quality rating:

			Criticized
(Dollars in Millions)	Pass		Special Mention		Classified(a)		Total Criticized		Total
December 31, 2019
Commercial	$	101,850	$	1,147	$	866	$	2,013	$	103,863
Commercial real estate		38,872		484		390		874		39,746
Residential mortgages(b)		70,174		2		410		412		70,586
Credit card		24,483		–		306		306		24,789
Other retail		56,825		10		283		293		57,118
Total loans	$	292,204	$	1,643	$	2,255	$	3,898	$	296,102
Total outstanding commitments	$	619,224	$	2,451	$	2,873	$	5,324	$	624,548
December 31, 2018
Commercial	$	100,014	$	1,149	$	1,281	$	2,430	$	102,444
Commercial real estate		38,473		584		482		1,066		39,539
Residential mortgages(b)		64,570		1		463		464		65,034
Credit card		23,070		–		293		293		23,363
Other retail		56,101		6		323		329		56,430
Total loans	$	282,228	$	1,740	$	2,842	$	4,582	$	286,810
Total outstanding commitments	$	600,407	$	2,801	$	3,448	$	6,249	$	606,656

(a) Classified rating on consumer loans primarily based on delinquency status.

(b) At December 31, 2019, $1.7 billion of GNMA loans 90 days or more past due and $1.6 billion of restructured GNMA loans whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs were classified with a pass rating, unchanged from December 31, 2018.

Summary of Impaired Loans, which Include Nonaccrual and TDR Loans, by Portfolio Class

A summary of impaired loans, which include all nonaccrual and TDR loans, by portfolio class was as follows:

(Dollars in Millions)	Period-end Recorded Investment(a)		Unpaid Principal Balance		Valuation Allowance		Commitments to Lend Additional Funds
December 31, 2019
Commercial	$	483	$	1,048	$	39	$	158
Commercial real estate		242		603		7		–
Residential mortgages		1,515		1,827		71		–
Credit card		263		263		81		–
Other retail		318		417		12		2
Total loans, excluding loans purchased from GNMA mortgage pools		2,821		4,158		210		160
Loans purchased from GNMA mortgage pools		1,622		1,622		39		–
Total	$	4,443	$	5,780	$	249	$	160
December 31, 2018
Commercial	$	467	$	1,006	$	32	$	106
Commercial real estate		279		511		12		2
Residential mortgages		1,709		1,879		86		–
Credit card		245		245		69		–
Other retail		335		418		14		5
Total loans, excluding loans purchased from GNMA mortgage pools		3,035		4,059		213		113
Loans purchased from GNMA mortgage pools		1,639		1,639		41		–
Total	$	4,674	$	5,698	$	254	$	113

(a) Substantially all loans classified as impaired at December 31, 2019 and 2018, had an associated allowance for credit losses. The total amount of interest income recognized during 2019 on loans classified as impaired at December 31, 2019, excluding those acquired with deteriorated credit quality, was $194 million, compared to what would have been recognized at the original contractual terms of the loans of $246 million.

Impaired Loans Average Recorded Investment and Interest Income Recognized

Additional information on impaired loans follows for the years ended December 31 follows:

(Dollars in Millions)	Average Recorded Investment		Interest Income Recognized
2019
Commercial	$	520	$	9
Commercial real estate		248		11
Residential mortgages		1,622		92
Credit card		257		–
Other retail		323		12
Total loans, excluding loans purchased from GNMA mortgage pools		2,970		124
Loans purchased from GNMA mortgage pools		1,638		70
Total	$	4,608	$	194
2018
Commercial	$	497	$	8
Commercial real estate		273		13
Residential mortgages		1,817		76
Credit card		236		3
Other retail		309		16
Covered Loans		25		1
Total loans, excluding loans purchased from GNMA mortgage pools		3,157		117
Loans purchased from GNMA mortgage pools		1,640		47
Total	$	4,797	$	164
2017
Commercial	$	683	$	7
Commercial real estate		273		11
Residential mortgages		2,135		103
Credit card		229		3
Other retail		287		14
Covered Loans		37		1
Total loans, excluding loans purchased from GNMA mortgage pools		3,644		139
Loans purchased from GNMA mortgage pools		1,672		65
Total	$	5,316	$	204

Summary of Loans Modified as TDRs

The following table provides a summary of loans modified as TDRs for the years ended December 31, by portfolio class:

(Dollars in Millions)	Number of Loans		Pre-Modification Outstanding Loan Balance		Post- Modification Outstanding Loan Balance
2019
Commercial		3,445	$	376	$	359
Commercial real estate		136		129		125
Residential mortgages		417		55		54
Credit card		34,247		185		186
Other retail		2,952		63		61
Total loans, excluding loans purchased from GNMA mortgage pools		41,197		808		785
Loans purchased from GNMA mortgage pools		6,257		856		827
Total loans		47,454	$	1,664	$	1,612
2018
Commercial		2,824	$	336	$	311
Commercial real estate		127		168		169
Residential mortgages		526		73		69
Credit card		33,318		169		171
Other retail		2,462		58		55
Covered Loans		3		1		1
Total loans, excluding loans purchased from GNMA mortgage pools		39,260		805		776
Loans purchased from GNMA mortgage pools		6,268		821		803
Total loans		45,528	$	1,626	$	1,579
2017
Commercial		2,758	$	380	$	328
Commercial real estate		128		82		78
Residential mortgages		800		90		88
Credit card		33,615		161		162
Other retail		3,881		79		68
Covered Loans		11		2		2
Total loans, excluding loans purchased from GNMA mortgage pools		41,193		794		726
Loans purchased from GNMA mortgage pools		6,791		881		867
Total loans		47,984	$	1,675	$	1,593

Summary of Loans Modified as TDRs in the Past Twelve Months that have Subsequently Defaulted

The following table provides a summary of TDR loans that defaulted (fully or partially charged-off or became 90 days or more past due) for the years ended December 31, that were modified as TDRs within 12 months previous to default:

(Dollars in Millions)	Number of Loans		Amount Defaulted
2019
Commercial		1,040	$	46
Commercial real estate		36		24
Residential mortgages		137		15
Credit card		8,273		40
Other retail		380		10
Total loans, excluding loans purchased from GNMA mortgage pools		9,866		135
Loans purchased from GNMA mortgage pools		997		131
Total loans		10,863	$	266
2018
Commercial		836	$	71
Commercial real estate		39		15
Residential mortgages		191		18
Credit card		8,012		35
Other retail		334		5
Covered loans		1		–
Total loans, excluding loans purchased from GNMA mortgage pools		9,413		144
Loans purchased from GNMA mortgage pools		1,447		187
Total loans		10,860	$	331
2017
Commercial		724	$	53
Commercial real estate		36		9
Residential mortgages		374		41
Credit card		8,372		36
Other retail		415		5
Covered loans		4		–
Total loans, excluding loans purchased from GNMA mortgage pools		9,925		144
Loans purchased from GNMA mortgage pools		1,369		177
Total loans		11,294	$	321

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Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Taxes Additional Information [Abstract]
Federal statutory rate	21.00%	21.00%	35.00%
Unrecognized tax positions that if recognized would impact the effective tax rate	$ 274.0	$ 273.0	$ 265.0
Interest recorded on unrecognized tax positions	7.0	$ (25.0)	$ 16.0
Unrecognized tax positions as a component of income taxes expense, accrued interest	35.0
Federal, state and foreign net operating loss carryforwards	$ 2.0
Income tax returns, years under examination	2011 2012 2015 2016
Base year reserves included in retained earnings of acquired thrift institutions for which no deferred federal income tax liability has been recognized	$ 102.0
Minimum [Member]
Income Taxes Additional Information [Abstract]
Federal, state and foreign net operating loss carryforwards expiration term	Dec. 31, 2020
Federal [Member]
Income Taxes Additional Information [Abstract]
Credit carryforwards	$ 2,500.0
Federal [Member] | Maximum [Member]
Income Taxes Additional Information [Abstract]
Credit carryforwards expiration term	Dec. 31, 2039

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U.S. Bancorp (Parent Company)

12 Months Ended

Dec. 31, 2019

Condensed Financial Information Disclosure [Abstract]

U.S. Bancorp (Parent Company)

  NOTE 24   U.S. Bancorp (Parent Company)  

Condensed Balance Sheet

At December 31 (Dollars in Millions)	2019		2018
Assets
Due from banks, principally interest-bearing	$	11,583	$	9,969
Available-for-sale securities		1,631		921
Investments in bank subsidiaries		48,518		47,549
Investments in nonbank subsidiaries		3,128		2,568
Advances to bank subsidiaries		3,850		3,800
Advances to nonbank subsidiaries		1,465		2,543
Other assets		1,211		813
Total assets	$	71,386	$	68,163
Liabilities and Shareholders’ Equity
Short-term funds borrowed	$	8	$	–
Long-term debt		18,602		16,291
Other liabilities		923		843
Shareholders’ equity		51,853		51,029
Total liabilities and shareholders’ equity	$	71,386	$	68,163

Condensed Income Statement

Year Ended December 31 (Dollars in Millions)	2019			2018			2017
Income
Dividends from bank subsidiaries	$	7,100		$	5,300		$	4,800
Dividends from nonbank subsidiaries		6			6			5
Interest from subsidiaries		317			220			159
Other income		25			33			41
Total income		7,448			5,559			5,005
Expense
Interest expense		551			471			402
Other expense		140			133			124
Total expense		691			604			526
Income before income taxes and equity in undistributed income of subsidiaries		6,757			4,955			4,479
Applicable income taxes		(92	)		(91	)		(176	)
Income of parent company		6,849			5,046			4,655
Equity in undistributed income of subsidiaries		65			2,050			1,563
Net income attributable to U.S. Bancorp	$	6,914		$	7,096		$	6,218

Condensed Statement of Cash Flows

Year Ended December 31 (Dollars in Millions)	2019			2018			2017
Operating Activities
Net income attributable to U.S. Bancorp	$	6,914		$	7,096		$	6,218
Adjustments to reconcile net income to net cash provided by operating activities
Equity in undistributed income of subsidiaries		(65	)		(2,050	)		(1,563	)
Other, net		231			359			(125	)
Net cash provided by operating activities		7,080			5,405			4,530
Investing Activities
Proceeds from sales and maturities of investment securities		291			39			100
Purchases of investment securities		(1,013	)		(10	)		(844	)
Net (increase) decrease in short-term advances to subsidiaries		578			(488	)		(790	)
Long-term advances to subsidiaries		(2,600	)		(500	)		–
Principal collected on long-term advances to subsidiaries		2,550			–			500
Other, net		(341	)		304			(12	)
Net cash used in investing activities		(535	)		(655	)		(1,046	)
Financing Activities
Net increase (decrease) in short-term borrowings		8			(1	)		(21	)
Proceeds from issuance of long-term debt		3,743			2,100			3,920
Principal payments or redemption of long-term debt		(1,500	)		(1,500	)		(1,250	)
Proceeds from issuance of preferred stock		–			565			993
Proceeds from issuance of common stock		88			86			159
Repurchase of preferred stock		–			–			(1,085	)
Repurchase of common stock		(4,525	)		(2,822	)		(2,631	)
Cash dividends paid on preferred stock		(302	)		(274	)		(284	)
Cash dividends paid on common stock		(2,443	)		(2,092	)		(1,928	)
Net cash used in financing activities		(4,931	)		(3,938	)		(2,127	)
Change in cash and due from banks		1,614			812			1,357
Cash and due from banks at beginning of year		9,969			9,157			7,800
Cash and due from banks at end of year	$	11,583		$	9,969		$	9,157

Transfer of funds (dividends, loans or advances) from bank subsidiaries to the Company is restricted. Federal law requires loans to the Company or its affiliates to be secured and generally limits loans to the Company or an individual affiliate to 10 percent of each bank’s unimpaired capital and surplus. In the aggregate, loans to the Company and all affiliates cannot exceed 20 percent of each bank’s unimpaired capital and surplus.Dividend payments to the Company by its subsidiary bank are subject to regulatory review and statutory limitations and, in some instances, regulatory approval. In general, dividends by the Company’s bank subsidiary to the parent company are limited by rules which compare dividends to net income for regulatorily-defined periods. Furthermore, dividends are restricted by minimum capital constraints for all national banks.

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Income Taxes - Significant Components of the Company's Net Deferred Tax Asset (Liability) (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Deferred Tax Assets, Gross [Abstract]
Federal, state and foreign net operating loss and credit carryforwards	$ 2,592	$ 2,699
Allowance for credit losses	1,155	1,141
Accrued expenses	485	508
Obligation for operating leases	328
Pension and postretirement benefits	193	85
Partnerships and other investment assets	91	69
Stock compensation	78	79
Fixed assets	2	58
Securities available-for-sale and financial instruments		278
Other deferred tax assets, net	257	268
Gross deferred tax assets	5,181	5,185
Deferred Tax Liabilities
Leasing activities	(2,700)	(2,652)
Goodwill and other intangible assets	(763)	(703)
Mortgage servicing rights	(546)	(642)
Right of use assets	(282)
Loans	(139)	(168)
Securities available-for-sale and financial instruments	(111)
Other deferred tax liabilities, net	(131)	(102)
Gross deferred tax liabilities	(4,672)	(4,267)
Valuation allowance	(127)	(109)
Net Deferred Tax Asset	$ 382	$ 809

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Long-Term Debt - Additional Information (Detail) - USD ($) $ in Billions	Dec. 31, 2019	Dec. 31, 2018
Federal Home Loan Bank and Federal Reserve Bank [Member]
Debt Instrument [Line Items]
Unused Borrowing Capacity under Federal Home Loan Bank and Federal Reserve Bank	$ 97.4	$ 98.8

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Shareholders' Equity - Number of Shares Issued and Outstanding and Carrying Amount of Preferred Stock (Parenthetical) (Detail) - $ / shares	Dec. 31, 2019	Dec. 31, 2018
Equity [Abstract]
Preferred stock, par value	$ 1.00	$ 1.00

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Shareholders' Equity - Components of Company's Regulatory Capital Requirements Under Banking Regulations (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Less intangible assets
Qualifying preferred stock	$ 5,984	$ 5,984
Bank Regulatory Capital Requirements
Common equity tier 1 capital as a percent of risk-weighted assets - Minimum capital ratio requirement	7.00%	6.375%
Tier 1 capital as a percent of risk-weighted assets - Minimum capital ratio requirement	8.50%	7.875%
Total risk-based capital as a percent of risk-weighted assets - Minimum capital ratio requirement	10.50%	9.875%
Tier 1 capital as a percent of adjusted quarterly average assets (leverage ratio) - Minimum capital ratio requirement	4.00%	4.00%
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure (total leverage exposure ratio) - Minimum capital ratio requirement	3.00%	3.00%
Common equity tier 1 capital as a percent of risk-weighted assets - Well capitalized ratio requirement	6.50%	6.50%
Tier 1 capital as a percent of risk-weighted assets - Well capitalized ratio requirement	8.00%	8.00%
Total risk-based capital as a percent of risk-weighted assets - Well capitalized ratio requirement	10.00%	10.00%
Tier 1 capital as a percent of adjusted quarterly average assets (leverage ratio) - Well capitalized ratio requirement	5.00%	5.00%
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure (total leverage exposure ratio) - Well capitalized ratio requirement	3.00%	3.00%
U.S. Bancorp [Member] | Basel III Standardized Approach: [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Common shareholders' equity	$ 45,869	$ 45,045
Less intangible assets
Goodwill (net of deferred tax liability)	(8,788)	(8,549)
Other disallowed intangible assets	(677)	(601)
Other	(691)	(1,171)
Total common equity tier 1 capital	35,713	34,724
Qualifying preferred stock	5,984	5,984
Noncontrolling interests eligible for tier 1 capital	28	36
Other	(4)	(3)
Total tier 1 capital	41,721	40,741
Eligible portion of allowance for credit losses	4,491	4,441
Subordinated debt and noncontrolling interests eligible for tier 2 capital	3,532	2,996
Total tier 2 capital	8,023	7,437
Total risk-based capital	49,744	48,178
Risk-weighted assets	$ 391,269	$ 381,661
Common equity tier 1 capital as a percent of risk-weighted assets	9.10%	9.10%
Tier 1 capital as a percent of risk-weighted assets	10.70%	10.70%
Total risk-based capital as a percent of risk-weighted assets	12.70%	12.60%
Tier 1 capital as a percent of adjusted quarterly average assets	8.80%	9.00%
U.S. Bancorp [Member] | Basel III Advanced Approaches: [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Common shareholders' equity		$ 45,045
Less intangible assets
Goodwill (net of deferred tax liability)		(8,549)
Other disallowed intangible assets		(601)
Other		(1,171)
Total common equity tier 1 capital		34,724
Qualifying preferred stock		5,984
Noncontrolling interests eligible for tier 1 capital		36
Other		(3)
Total tier 1 capital		40,741
Eligible portion of allowance for credit losses		1,399
Subordinated debt and noncontrolling interests eligible for tier 2 capital		2,996
Total tier 2 capital		4,395
Total risk-based capital		45,136
Risk-weighted assets		$ 295,002
Common equity tier 1 capital as a percent of risk-weighted assets		11.80%
Tier 1 capital as a percent of risk-weighted assets		13.80%
Total risk-based capital as a percent of risk-weighted assets		15.30%
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure	7.00%	7.20%
U.S. Bank National Association [Member] | Basel III Standardized Approach: [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Common shareholders' equity	$ 48,592	$ 47,728
Less intangible assets
Goodwill (net of deferred tax liability)	(8,806)	(8,566)
Other disallowed intangible assets	(710)	(732)
Other	38	(112)
Total common equity tier 1 capital	39,114	38,318
Noncontrolling interests eligible for tier 1 capital	28	36
Other	(4)	(3)
Total tier 1 capital	39,138	38,351
Eligible portion of allowance for credit losses	4,491	4,441
Subordinated debt and noncontrolling interests eligible for tier 2 capital	3,365	3,168
Total tier 2 capital	7,856	7,609
Total risk-based capital	46,994	45,960
Risk-weighted assets	$ 383,560	$ 374,299
Common equity tier 1 capital as a percent of risk-weighted assets	10.20%	10.20%
Tier 1 capital as a percent of risk-weighted assets	10.20%	10.20%
Total risk-based capital as a percent of risk-weighted assets	12.30%	12.30%
Tier 1 capital as a percent of adjusted quarterly average assets	8.40%	8.60%
U.S. Bank National Association [Member] | Basel III Advanced Approaches: [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Common shareholders' equity		$ 47,728
Less intangible assets
Goodwill (net of deferred tax liability)		(8,566)
Other disallowed intangible assets		(732)
Other		(112)
Total common equity tier 1 capital		38,318
Noncontrolling interests eligible for tier 1 capital		36
Other		(3)
Total tier 1 capital		38,351
Eligible portion of allowance for credit losses		1,364
Subordinated debt and noncontrolling interests eligible for tier 2 capital		3,168
Total tier 2 capital		4,532
Total risk-based capital		42,883
Risk-weighted assets		$ 287,897
Common equity tier 1 capital as a percent of risk-weighted assets		13.30%
Tier 1 capital as a percent of risk-weighted assets		13.30%
Total risk-based capital as a percent of risk-weighted assets		14.90%
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure	6.70%	6.90%

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Stock-Based Compensation - Additional Information (Detail) - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Shares available for grant under Company's stock incentive plan (subject to adjustment for forfeitures)	32
Fair value of shares vested	$ 175	$ 182	$ 180
Stock-based compensation expense	178	174	163
Stock-based compensation expense on an after tax basis	133	$ 130	$ 101
Unrecognized compensation cost related to nonvested share-based arrangements granted under plans	$ 143
Unrecognized compensation cost recognized over a weighted-average period as compensation expense	1 year 8 months 12 days
Minimum [Member]
Date of grant exercisable period	10 years
Stock and unit awards vesting period	3 years
Maximum [Member]
Stock and unit awards vesting period	5 years

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Earnings Per Share

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Earnings Per Share

  NOTE 15   Earnings Per Share

The components of earnings per share were:

Year Ended December 31 (Dollars and Shares in Millions, Except Per Share Data)	2019			2018			2017
Net income attributable to U.S. Bancorp	$	6,914		$	7,096		$	6,218
Preferred dividends		(302	)		(282	)		(267	)
Impact of preferred stock redemption(a)		–			–			(10	)
Earnings allocated to participating stock awards		(29	)		(30	)		(28	)
Net income applicable to U.S. Bancorp common shareholders	$	6,583		$	6,784		$	5,913
Average common shares outstanding		1,581			1,634			1,677
Net effect of the exercise and assumed purchase of stock awards		2			4			6
Average diluted common shares outstanding		1,583			1,638			1,683
Earnings per common share	$	4.16		$	4.15		$	3.53
Diluted earnings per common share	$	4.16		$	4.14		$	3.51

(a) Represents stock issuance costs originally recorded in preferred stock upon the issuance of the Company’s Series G Preferred Stock that were reclassified to retained earnings on the date the Company announced its intent to redeem the outstanding shares.

Options outstanding at December 31, 2019, 2018 and 2017, to purchase 1 million common shares, were not included in the computation of diluted earnings per share for the years ended December 31, 2019, 2018 and 2017, because they were antidilutive.

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Employee Benefits - Summary of Plan Investment Assets Measured at Fair Value (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Level 3 [Member] | Other [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	$ 3	$ 3	$ 2	$ 1
Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	5,838	4,936	5,482
Plan assets measured at fair value, excluding assets not classified in fair hierarchy	2,301	2,109
Pension Plans [Member] | Cash and Cash Equivalents [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	58	54
Pension Plans [Member] | Debt Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	1,800	1,535
Pension Plans [Member] | Real Estate Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value		109
Pension Plans [Member] | Debt Securities Mutual Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	304	295
Pension Plans [Member] | Emerging Markets Equity Mutual Fund Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	136	113
Pension Plans [Member] | Other [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	3	3
Pension Plans [Member] | Collective Investment Funds Domestic Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	1,328	1,183
Pension Plans [Member] | Collective Investment Fund Mid-Small Cap Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	323	340
Pension Plans [Member] | Collective Investment Funds International Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	752	643
Pension Plans [Member] | Real estate securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	547	146
Pension Plans [Member] | Hedge Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	283	290
Pension Plans [Member] | Private Equity Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	304	225
Pension Plans [Member] | Level 1 [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value, excluding assets not classified in fair hierarchy	785	794
Pension Plans [Member] | Level 1 [Member] | Cash and Cash Equivalents [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	58	54
Pension Plans [Member] | Level 1 [Member] | Debt Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	727	631
Pension Plans [Member] | Level 1 [Member] | Real Estate Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value		109
Pension Plans [Member] | Level 2 [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value, excluding assets not classified in fair hierarchy	1,513	1,312
Pension Plans [Member] | Level 2 [Member] | Debt Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	1,073	904
Pension Plans [Member] | Level 2 [Member] | Debt Securities Mutual Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	304	295
Pension Plans [Member] | Level 2 [Member] | Emerging Markets Equity Mutual Fund Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	136	113
Pension Plans [Member] | Level 3 [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value, excluding assets not classified in fair hierarchy	3	3
Pension Plans [Member] | Level 3 [Member] | Other [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	3	3
Postretirement Welfare Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	84	81	$ 87
Postretirement Welfare Plan [Member] | Level 1 [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	84	81
Plan assets measured at fair value, excluding assets not classified in fair hierarchy	40	42
Postretirement Welfare Plan [Member] | Level 1 [Member] | Cash and Cash Equivalents [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	40	42
Postretirement Welfare Plan [Member] | Level 1 [Member] | Collective Investment Funds Domestic Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	27	24
Postretirement Welfare Plan [Member] | Level 1 [Member] | Collective Investment Funds International Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	$ 17	$ 15

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Derivative Instruments

12 Months Ended

Dec. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

  NOTE 19   Derivative Instruments

In the ordinary course of business, the Company enters into derivative transactions to manage various risks and to accommodate the business requirements of its customers. The Company recognizes all derivatives on the Consolidated Balance Sheet at fair value in other assets or in other liabilities. On the date the Company enters into a derivative contract, the derivative is designated as either a fair value hedge, cash flow hedge, net investment hedge, or a designation is not made as it is a customer-related transaction, an economic hedge for asset/liability risk management purposes or another stand-alone derivative created through the Company’s operations (“free-standing derivative”). When a derivative is designated as a fair value, cash flow or net investment hedge, the Company performs an assessment, at inception and, at a minimum, quarterly thereafter, to determine the effectiveness of the derivative in offsetting changes in the value or cash flows of the hedged item(s).

Fair Value Hedges These derivatives are interest rate swaps the Company uses to hedge the change in fair value related to interest rate changes of its underlying fixed-rate debt. Changes in the fair value of derivatives designated as fair value hedges, and changes in the fair value of the hedged items, are recorded in earnings. 

Cash Flow Hedges These derivatives are interest rate swaps the Company uses to hedge the forecasted cash flows from its underlying variable-rate debt. Changes in the fair value of derivatives designated as cash flow hedges are recorded in other comprehensive income (loss) until the cash flows of the hedged items are realized. If a derivative designated as a cash flow hedge is terminated or ceases to be highly effective, the gain or loss in other comprehensive income (loss) is amortized to earnings over the period the forecasted hedged transactions impact earnings. If a hedged forecasted transaction is no longer probable, hedge accounting is ceased and any gain or loss included in other comprehensive income (loss) is reported in earnings immediately, unless the forecasted transaction is at least reasonably possible of occurring, whereby the amounts remain within other comprehensive income (loss). At December 31, 2019, the Company had $51 million (net-of-tax) of realized and unrealized losses on derivatives classified as cash flow hedges recorded in other comprehensive income (loss), compared with $112 million (net-of-tax) of realized and unrealized gains at December 31, 2018. The estimated amount to be reclassified from other

comprehensive income (loss) into earnings during the next 12 months is a loss of $32 million (net-of-tax). All cash flow hedges were highly effective for the year ended December 31, 2019.

Net Investment Hedges The Company uses forward commitments to sell specified amounts of certain foreign currencies, and non-derivative debt instruments, to hedge the volatility of its net investment in foreign operations driven by fluctuations in foreign currency exchange rates. The carrying amount of non-derivative debt instruments designated as net investment hedges was $1.3 billion at December 31, 2019, compared with $1.1 billion at December 31, 2018.

Other Derivative Positions The Company enters into free-standing derivatives to mitigate interest rate risk and for other risk management purposes. These derivatives include forward commitments to sell to-be-announced securities (“TBAs”) and other commitments to sell residential mortgage loans, which are used to economically hedge the interest rate risk related to MLHFS and unfunded mortgage loan commitments. The Company also enters into interest rate swaps, swaptions, forward commitments to buy TBAs, U.S. Treasury and Eurodollar futures and options on U.S. Treasury futures to economically hedge the change in the fair value of the Company’s MSRs. The Company also enters into foreign currency forwards to economically hedge remeasurement gains and losses the Company recognizes on foreign currency denominated assets and liabilities. In addition, the Company acts as a seller and buyer of interest rate derivatives and foreign exchange contracts for its customers. The Company mitigates the market and liquidity risk associated with these customer derivatives by entering into similar offsetting positions with broker-dealers, or on a portfolio basis by entering into other derivative or non-derivative financial instruments that partially or fully offset the exposure from these customer-related positions. The Company’s customer derivatives and related hedges are monitored and reviewed by the Company’s Market Risk Committee, which establishes policies for market risk management, including exposure limits for each portfolio. The Company also has derivative contracts that are created through its operations, including certain unfunded mortgage loan commitments and swap agreements related to the sale of a portion of its Class B common and preferred shares of Visa Inc. Refer to Note 21 for further information on these swap agreements.

The following table summarizes the asset and liability management derivative positions of the Company:

	Asset Derivatives						Liability Derivatives
(Dollars in Millions)	Notional Value		Fair Value		Weighted-Average Remaining Maturity In Years		Notional Value		Fair Value		Weighted-Average Remaining Maturity In Years
December 31, 2019
Fair value hedges
Interest rate contracts
Receive fixed/pay floating swaps	$	18,300	$	–		3.89	$	4,900	$	–		3.49
Cash flow hedges
Interest rate contracts
Pay fixed/receive floating swaps		1,532		–		6.06		7,150		10		2.11
Net investment hedges
Foreign exchange forward contracts		–		–		–		287		3		.04
Other economic hedges
Interest rate contracts
Futures and forwards
Buy		5,409		17		.08		5,477		11		.07
Sell		16,333		13		.81		8,113		25		.03
Options
Purchased		10,180		79		2.97		–		–		–
Written		1,270		30		.08		4,238		81		2.07
Receive fixed/pay floating swaps		4,408		–		5.99		5,316		–		13.04
Pay fixed/receive floating swaps		1,259		–		5.67		4,497		–		6.03
Foreign exchange forward contracts		113		1		.05		467		6		.04
Equity contracts		128		2		.45		20		–		1.06
Other(a)		34		–		.01		1,823		165		2.45
Total	$	58,966	$	142			$	42,288	$	301
December 31, 2018
Cash flow hedges
Interest rate contracts
Pay fixed/receive floating swaps	$	7,422	$	8		3.11	$	4,320	$	–		1.77
Net investment hedges
Foreign exchange forward contracts		209		5		.05		223		1		.05
Other economic hedges
Interest rate contracts
Futures and forwards
Buy		2,839		27		.07		1,140		5		.05
Sell		994		3		.06		13,968		30		.72
Options
Purchased		5,080		88		10.77		–		–		–
Written		584		16		.09		3		–		.09
Receive fixed/pay floating swaps		3,605		–		14.80		4,333		–		6.97
Pay fixed/receive floating swaps		4,333		–		6.97		1,132		–		7.64
Foreign exchange forward contracts		549		7		.03		75		1		.05
Equity contracts		19		1		.82		104		2		.45
Other(a)		1		–		.01		1,458		84		1.50
Total	$	25,635	$	155			$	26,756	$	123

(a) Includes derivative liability swap agreements related to the sale of a portion of the Company’s Class B common and preferred shares of Visa Inc. The Visa swap agreements had a total notional value, fair value and weighted-average remaining maturity of $1.8 billion, $165 million and 2.50 years at December 31, 2019, respectively, compared to $1.5 billion, $84 million and 1.50 years at December 31, 2018, respectively. In addition, includes short-term underwriting purchase and sale commitments with total asset and liability notional values of $34 million at December 31, 2019, and $1 million at December 31, 2018.

The following table summarizes the customer-related derivative positions of the Company:

	Asset Derivatives						Liability Derivatives
(Dollars in Millions)	Notional Value		Fair Value		Weighted-Average Remaining Maturity In Years		Notional Value		Fair Value		Weighted-Average Remaining Maturity In Years
December 31, 2019
Interest rate contracts
Receive fixed/pay floating swaps	$	108,560	$	1,865		4.83	$	31,544	$	88		3.83
Pay fixed/receive floating swaps		28,150		30		3.83		101,078		753		4.55
Other(a)		6,895		1		3.45		6,218		2		2.98
Options
Purchased		46,406		43		2.06		12,804		47		1.25
Written		6,901		49		1.93		49,741		41		1.82
Futures
Buy		894		–		.21		–		–		–
Sell		3,874		1		1.18		1,995		–		1.04
Foreign exchange rate contracts
Forwards, spots and swaps		36,350		748		.97		36,671		729		1.07
Options
Purchased		1,354		17		.54		–		–		–
Written		–		–		–		1,354		17		.54
Credit contracts		2,879		1		3.28		7,488		5		4.33
Total	$	242,263	$	2,755			$	248,893	$	1,682
December 31, 2018
Interest rate contracts
Receive fixed/pay floating swaps	$	42,054	$	754		6.73	$	60,731	$	456		4.32
Pay fixed/receive floating swaps		60,970		288		3.90		40,499		420		6.57
Other(a)		5,777		2		3.77		6,496		2		2.72
Options
Purchased		41,711		51		1.54		1,940		30		1.98
Written		2,060		32		2.07		39,538		51		1.44
Futures
Buy		460		–		1.58		–		–		–
Sell		–		–		–		6,190		1		.59
Foreign exchange rate contracts
Forwards, spots and swaps		26,210		681		.91		25,571		663		.88
Options
Purchased		2,779		47		.75		–		–		–
Written		–		–		–		2,779		47		.75
Credit contracts		2,318		–		3.50		4,923		2		4.04
Total	$	184,339	$	1,855			$	188,667	$	1,672

(a) Primarily represents floating rate interest rate swaps that pay based on differentials between specified interest rate indexes.

The table below shows the effective portion of the gains (losses) recognized in other comprehensive income (loss) and the gains (losses) reclassified from other comprehensive income (loss) into earnings (net-of-tax) for the years ended December 31:

	Gains (Losses) Recognized in Other Comprehensive Income (Loss)								Gains (Losses) Reclassified from Other Comprehensive Income (Loss) into Earnings
(Dollars in Millions)	2019			2018		2017			2019			2018		2017
Asset and Liability Management Positions
Cash flow hedges
Interest rate contracts	$	(171	)	$	29	$	(3	)	$	(8	)	$	3	$	(19	)
Net investment hedges
Foreign exchange forward contracts		3			39		(56	)		–			–		–
Non-derivative debt instruments		13			32		(46	)		–			–		–

Note: The Company does not exclude components from effectiveness testing for cash flow and net investment hedges.

The table below shows the effect of fair value and cash flow hedge accounting on the Consolidated Statement of Income for the years ended December 31:

	Other Noninterest Income							Interest Expense
(Dollars in Millions)	2019		2018		2017			2019			2018			2017
Total amount of income and expense line items presented in the Consolidated Statement of Income in which the effects of fair value or cash flow hedges are recorded	$	926	$	910	$	774		$	4,442		$	3,254		$	1,966
Asset and Liability Management Positions
Fair value hedges
Interest rate contract derivatives		–		–		(28	)		(44	)		5			–
Hedged items		–		–		28			44			(5	)		–
Cash Flow hedges
Interest rate contract derivatives		–		–		–			11			(5	)		30

Note: The Company does not exclude components from effectiveness testing for fair value and cash flow hedges. The Company did not reclassify gains or losses into earnings as a result of the discontinuance of cash flow hedges during the years ended December 31, 2019, 2018 and 2017.

The table below shows cumulative hedging adjustments and the carrying amount of assets (liabilities) designated in fair value hedges:

	Carrying Amount of the Hedged Assets (Liabilities)				Cumulative Hedging Adjustment(a)
At December 31 (Dollars in Millions)	2019		2018		2019		2018
Line Item in the Consolidated Balance Sheet
Long-term Debt	$	23,195	$	–	$	35	$	(27	)

(a) The cumulative hedging adjustment related to discontinued hedging relationships at December 31, 2019 and 2018 was $(7) million and $(27) million, respectively.

The table below shows the gains (losses) recognized in earnings for other economic hedges and the customer-related positions for the years ended December 31:

(Dollars in Millions)	Location of Gains (Losses) Recognized in Earnings		2019			2018			2017
Asset and Liability Management Positions
Other economic hedges
Interest rate contracts
Futures and forwards		Mortgage banking revenue	$	34		$	110		$	24
Purchased and written options		Mortgage banking revenue		432			188			237
Swaps		Mortgage banking revenue		316			(111	)		35
Foreign exchange forward contracts		Other noninterest income		(24	)		39			(69	)
Equity contracts		Compensation expense		–			(4	)		1
Other		Other noninterest income		(140	)		2			(1	)
Customer-Related Positions
Interest rate contracts
Swaps		Commercial products revenue		82			47			67
Purchased and written options		Commercial products revenue		10			2			(24	)
Futures		Commercial products revenue		(5	)		9			(3	)
Foreign exchange rate contracts
Forwards, spots and swaps		Commercial products revenue		82			84			92
Purchased and written options		Commercial products revenue		1			–			2
Credit contracts		Commercial products revenue		(18	)		2			3

Derivatives are subject to credit risk associated with counterparties to the derivative contracts. The Company measures that credit risk using a credit valuation adjustment and includes it within the fair value of the derivative. The Company manages counterparty credit risk through diversification of its derivative positions among various counterparties, by entering into derivative positions that are centrally cleared through clearinghouses, by entering into master netting arrangements and, where possible, by requiring collateral arrangements. A master netting arrangement allows two counterparties, who have multiple derivative contracts with each other, the ability to net settle amounts under all contracts, including any related collateral, through a single payment and in a single currency. Collateral arrangements generally require the counterparty to deliver collateral (typically cash or U.S. Treasury and agency securities) equal to the Company’s net derivative receivable, subject to minimum transfer and credit rating requirements.

The Company’s collateral arrangements are predominately bilateral and, therefore, contain provisions that require collateralization of the Company’s net liability derivative positions. Required collateral coverage is based on net liability thresholds and may be contingent upon the Company’s credit rating from two of the nationally recognized statistical rating organizations. If the Company’s credit rating were to fall below credit ratings thresholds established in the collateral arrangements, the counterparties to the derivatives could request immediate additional collateral coverage up to and including full collateral coverage for derivatives in a net liability position. The aggregate fair value of all derivatives under collateral arrangements that were in a net liability position at December 31, 2019, was $717 million. At December 31, 2019, the Company had $514 million of cash posted as collateral against this net liability position.

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Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Components of Earnings Per Share

The components of earnings per share were:

Year Ended December 31 (Dollars and Shares in Millions, Except Per Share Data)	2019			2018			2017
Net income attributable to U.S. Bancorp	$	6,914		$	7,096		$	6,218
Preferred dividends		(302	)		(282	)		(267	)
Impact of preferred stock redemption(a)		–			–			(10	)
Earnings allocated to participating stock awards		(29	)		(30	)		(28	)
Net income applicable to U.S. Bancorp common shareholders	$	6,583		$	6,784		$	5,913
Average common shares outstanding		1,581			1,634			1,677
Net effect of the exercise and assumed purchase of stock awards		2			4			6
Average diluted common shares outstanding		1,583			1,638			1,683
Earnings per common share	$	4.16		$	4.15		$	3.53
Diluted earnings per common share	$	4.16		$	4.14		$	3.51

(a) Represents stock issuance costs originally recorded in preferred stock upon the issuance of the Company’s Series G Preferred Stock that were reclassified to retained earnings on the date the Company announced its intent to redeem the outstanding shares.

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Derivative Instruments - Effect of Fair Value and Cash Flow Hedge Accounting Included in Interest Expense on Consolidated Statement of Income (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Other Noninterest Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total amount of income line items presented in the Consolidated Statement of Income in which the effects of fair value or cash flow hedges are recorded	$ 926	$ 910	$ 774
Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total amount of expense line items presented in the Consolidated Statement of Income in which the effects of fair value or cash flow hedges are recorded	4,442	3,254	1,966
Asset and Liability Management Positions [Member] | Fair Value Hedges [Member] | Other Noninterest Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gains (Losses) Recognized in Earnings related to fair value hedged item			28
Asset and Liability Management Positions [Member] | Fair Value Hedges [Member] | Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gains (Losses) Recognized in Earnings related to fair value hedged item	44	(5)
Asset and Liability Management Positions [Member] | Fair Value Hedges [Member] | Interest Rate Contracts [Member] | Other Noninterest Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gains (Losses) Recognized in Earnings related to fair value hedge			(28)
Asset and Liability Management Positions [Member] | Fair Value Hedges [Member] | Interest Rate Contracts [Member] | Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gains (Losses) Recognized in Earnings related to fair value hedge	(44)	5
Asset and Liability Management Positions [Member] | Cash Flow Hedges [Member] | Interest Rate Contracts [Member] | Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gains (Losses) Recognized in Earnings related to cash flow hedge	$ 11	$ (5)	$ 30

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Deposits (Tables)

12 Months Ended

Dec. 31, 2019

Banking and Thrift [Abstract]

Composition of Deposits

The composition of deposits at December 31 was as follows:

(Dollars in Millions)	2019		2018
Noninterest-bearing deposits	$	75,590	$	81,811
Interest-bearing deposits
Interest checking		75,949		73,994
Money market savings		120,082		100,396
Savings accounts		47,401		44,720
Time deposits		42,894		44,554
Total interest-bearing deposits		286,326		263,664
Total deposits	$	361,916	$	345,475

Maturities of Time Deposits Outstanding

The maturities of time deposits outstanding at December 31, 2019 were as follows:

(Dollars in Millions)
2020	$	37,731
2021		2,700
2022		1,183
2023		673
2024		602
Thereafter		5
Total	$	42,894

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Netting Arrangements for Certain Financial Instruments and Securities Financing Activities - Additional Information (Detail) $ in Billions	Dec. 31, 2019 USD ($)
Derivative [Line Items]
Notional amount of derivative	$ 592.4
Over the Counter Trades [Member]
Derivative [Line Items]
Notional amount of derivative	299.4
Exchange Cleared [Member]
Derivative [Line Items]
Notional amount of derivative	272.4
Exchange Traded [Member]
Derivative [Line Items]
Notional amount of derivative	$ 20.6

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Business Segments - Additional Information (Detail) - USD ($) $ in Billions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Revenue generated from certain contracts with customers included in non-interest income	$ 7.3	$ 7.4
Payment Services [Member]
Rewards and Rebate Costs and Certain Partner Payments Included in Noninterest Income	$ 2.2	$ 2.2

XML

Long-Term Debt - Summary of Long-term Debt (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Long-term debt	$ 40,167	$ 41,340
Parent Company [Member]
Debt Instrument [Line Items]
Long-term debt	18,602	16,291
Parent Company [Member] | Other Debt Issuance Fees and Unrealized Gains and Losses and Deferred Amounts Relating to Derivative Instruments [Member]
Debt Instrument [Line Items]
Long-term debt	33	(53)
Subsidiaries [Member]
Debt Instrument [Line Items]
Long-term debt	21,565	25,049
Subsidiaries [Member] | Other Consolidated Community Development and Tax-Advantaged Investment Vies, Capitalized Lease Obligations, Debt Issuance Fees, and Unrealized Gains and Losses and Deferred Amounts Relating to Derivative Instruments [Member]
Debt Instrument [Line Items]
Long-term debt	$ 848	1,006
Fixed Rate [Member] | Parent Company [Member] | Subordinated Notes [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	2.95%
Debt Instrument Maturity Year, End	Dec. 31, 2022
Long-term debt	$ 1,300	1,300
Fixed Rate [Member] | Parent Company [Member] | Subordinated Debt One [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	3.60%
Debt Instrument Maturity Year, End	Dec. 31, 2024
Long-term debt	$ 1,000	1,000
Fixed Rate [Member] | Parent Company [Member] | Subordinated Notes Two [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	7.50%
Debt Instrument Maturity Year, End	Dec. 31, 2026
Long-term debt	$ 199	199
Fixed Rate [Member] | Parent Company [Member] | Subordinated Notes Three [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	3.10%
Debt Instrument Maturity Year, End	Dec. 31, 2026
Long-term debt	$ 1,000	1,000
Fixed Rate [Member] | Parent Company [Member] | Medium-term Notes [Member]
Debt Instrument [Line Items]
Debt Instrument Maturity Year, start	Jan. 01, 2021
Debt Instrument Maturity Year, End	Dec. 31, 2028
Long-term debt	$ 13,820	12,345
Fixed Rate [Member] | Parent Company [Member] | Medium-term Notes [Member] | Minimum [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	0.85%
Fixed Rate [Member] | Parent Company [Member] | Medium-term Notes [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.125%
Fixed Rate [Member] | Parent Company [Member] | Subordinated Debt Four [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	3.00%
Debt Instrument Maturity Year, End	Dec. 31, 2029
Long-term debt	$ 1,000
Fixed Rate [Member] | Subsidiaries [Member] | Federal Home Loan Bank Advances [Member]
Debt Instrument [Line Items]
Debt Instrument Maturity Year, start	Jan. 01, 2020
Debt Instrument Maturity Year, End	Dec. 31, 2026
Long-term debt	$ 1,106	307
Fixed Rate [Member] | Subsidiaries [Member] | Federal Home Loan Bank Advances [Member] | Minimum [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	1.25%
Fixed Rate [Member] | Subsidiaries [Member] | Federal Home Loan Bank Advances [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	8.25%
Fixed Rate [Member] | Subsidiaries [Member] | Bank Notes [Member]
Debt Instrument [Line Items]
Debt Instrument Maturity Year, start	Jan. 01, 2020
Debt Instrument Maturity Year, End	Dec. 31, 2025
Long-term debt	$ 9,550	11,600
Fixed Rate [Member] | Subsidiaries [Member] | Bank Notes [Member] | Minimum [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	1.95%
Fixed Rate [Member] | Subsidiaries [Member] | Bank Notes [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	3.45%
Floating Rate [Member] | Parent Company [Member] | Medium-term Notes [Member]
Debt Instrument [Line Items]
Debt Instrument Maturity Year, End	Dec. 31, 2022
Long-term debt	$ 250	500
Floating Rate [Member] | Parent Company [Member] | Medium-term Notes [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	2.576%
Floating Rate [Member] | Subsidiaries [Member] | Federal Home Loan Bank Advances [Member]
Debt Instrument [Line Items]
Debt Instrument Maturity Year, start	Jan. 01, 2022
Debt Instrument Maturity Year, End	Dec. 31, 2026
Long-term debt	$ 3,272	4,272
Floating Rate [Member] | Subsidiaries [Member] | Federal Home Loan Bank Advances [Member] | Minimum [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	2.165%
Floating Rate [Member] | Subsidiaries [Member] | Federal Home Loan Bank Advances [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	2.461%
Floating Rate [Member] | Subsidiaries [Member] | Bank Notes [Member]
Debt Instrument [Line Items]
Debt Instrument Maturity Year, start	Jan. 01, 2020
Debt Instrument Maturity Year, End	Dec. 31, 2059
Long-term debt	$ 6,789	$ 7,864
Floating Rate [Member] | Subsidiaries [Member] | Bank Notes [Member] | Minimum [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	0.60%
Floating Rate [Member] | Subsidiaries [Member] | Bank Notes [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	2.35%

XML

Loans and Allowance for Credit Losses - Summary of Loans by Portfolio Class, Including Delinquency Status of those that Continue to Accrue Interest and are Nonperforming (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 293,596	$ 284,109
Accruing 30-89 Days Past Due	1,209	1,300
Accruing 90 Days or More Past Due	605	584
Nonperforming	692	817
Total loans	296,102	286,810
Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	103,273	101,844
Accruing 30-89 Days Past Due	307	322
Accruing 90 Days or More Past Due	79	69
Nonperforming	204	209
Total loans	103,863	102,444
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	39,627	39,354
Accruing 30-89 Days Past Due	34	70
Accruing 90 Days or More Past Due	3
Nonperforming	82	115
Total loans	39,746	39,539
Residential Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	70,071	64,443
Accruing 30-89 Days Past Due	154	181
Accruing 90 Days or More Past Due	120	114
Nonperforming	241	296
Total loans	70,586	65,034
Other Retail [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	56,463	55,722
Accruing 30-89 Days Past Due	393	403
Accruing 90 Days or More Past Due	97	108
Nonperforming	165	197
Total loans	57,118	56,430
Credit Card [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	24,162	22,746
Accruing 30-89 Days Past Due	321	324
Accruing 90 Days or More Past Due	306	293
Total loans	$ 24,789	$ 23,363

XML

Intangible Assets - Intangible Assets (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 9,655	$ 9,369	$ 9,434	$ 9,344
Mortgage servicing rights	2,546	2,791	$ 2,645	$ 2,591
Total	$ 12,878	12,761
Merchant Processing Contracts [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization Method	SL/AC
Finite-Lived Intangible Assets	$ 225	155
Core Deposit Benefits [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization Method	SL/AC
Finite-Lived Intangible Assets	$ 82	104
Trust Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization Method	SL/AC
Finite-Lived Intangible Assets	$ 27	34
Other Identified Intangibles [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization Method	SL/AC
Finite-Lived Intangible Assets	$ 343	$ 308
Straight line method [Member] | Merchant Processing Contracts [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Life	6 years
Straight line method [Member] | Core Deposit Benefits [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Life	22 years
Straight line method [Member] | Trust Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Life	10 years
Straight line method [Member] | Other Identified Intangibles [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Life	6 years
Accelerated method [Member] | Merchant Processing Contracts [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Life	7 years
Accelerated method [Member] | Core Deposit Benefits [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Life	5 years
Accelerated method [Member] | Trust Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Life	7 years
Accelerated method [Member] | Other Identified Intangibles [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Life	4 years

XML

Investment Securities - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Investments, Debt and Equity Securities [Abstract]
Fair value of securities pledged	$ 8,400	$ 10,900
Fair value of securities pledged as collateral where counterparty has right to repledge or resell	269	$ 2,100
Held-to-maturity investment securities transferred to available-for-sale	43,600
Unrealized gains and losses on held-to-maturity investment securities transferred to available-for-sale	$ 141

XML

Guarantees and Contingent Liabilities - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Securities Lending Indemnifications [Member]
Guarantees And Contingent Liabilities (Textual) [Abstract]
Maximum Potential Future Payments	$ 4,468
Collateral Held	4,564
Tender Option Bond Program Guarantee [Member]
Guarantees And Contingent Liabilities (Textual) [Abstract]
Maximum Potential Future Payments	2,725
Collateral Held	2,994
Minimum Revenue Guarantees [Member]
Guarantees And Contingent Liabilities (Textual) [Abstract]
Maximum Potential Future Payments	3
Standby Letters of Credit [Member]
Guarantees And Contingent Liabilities (Textual) [Abstract]
Maximum Potential Future Payments	$ 10,258
Weighted-average term of standby letter of credit arrangements	21 months
Carrying Amount	$ 48
Third Party Borrowing Arrangements [Member]
Guarantees And Contingent Liabilities (Textual) [Abstract]
Maximum Potential Future Payments	7
Asset Sales [Member]
Guarantees And Contingent Liabilities (Textual) [Abstract]
Maximum Potential Future Payments	5,069
Carrying Amount	68
Merchant Processing [Member]
Guarantees And Contingent Liabilities (Textual) [Abstract]
Maximum Potential Future Payments	108,875
Carrying Amount	61
Collateral Held	589
Airline Processing Arrangements [Member]
Guarantees And Contingent Liabilities (Textual) [Abstract]
Value of airline tickets purchased to deliver at future date through card transactions	8,300
Representation and Warranty [Member]
Guarantees And Contingent Liabilities (Textual) [Abstract]
Carrying Amount	9	$ 10
Unresolved representation and warranty claims from GSEs	10	$ 15
Tax Advantaged Investments Sales [Member]
Guarantees And Contingent Liabilities (Textual) [Abstract]
Carrying Amount	68
Unresolved Merchant Charge-backs [Member]
Guarantees And Contingent Liabilities (Textual) [Abstract]
Carrying Amount	89
Collateral Held	17
Escrow Deposits Letters of Credit Indemnities [Member] | Airline Processing Arrangements [Member]
Guarantees And Contingent Liabilities (Textual) [Abstract]
Collateral Held	496
Merchant Escrow Deposits [Member] | Airline Processing Arrangements [Member]
Guarantees And Contingent Liabilities (Textual) [Abstract]
Collateral Held	44
Wholly Owned Unconsolidated Trust [Member]
Guarantees And Contingent Liabilities (Textual) [Abstract]
Maximum Potential Future Payments	$ 681
Percentage of common equity in wholly owned USB Capital IX	100.00%
Total assets of trust consisting primarily of Series A Preferred Stock	$ 682
Subsidiaries Financial Performance [Member]
Guarantees And Contingent Liabilities (Textual) [Abstract]
Maximum Potential Future Payments	$ 781

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Loans and Allowance for Credit Losses - Composition of Loan Portfolio (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 296,102	$ 286,810
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	98,168	96,849
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	103,863	102,444
Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	39,746	39,539
Residential Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	70,586	65,034
Other Retail [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	57,118	56,430
Lease Financing [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	5,695	5,595
Commercial Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	29,404	28,596
Construction and Development [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	10,342	10,943
Residential Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	59,865	53,034
Home Equity Loans, First Liens [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	10,721	12,000
Credit Card [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	24,789	23,363
Retail Leasing [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	8,490	8,546
Home Equity and Second Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	15,036	16,122
Revolving Credit [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	2,899	3,088
Installment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	11,038	9,676
Automobile [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	19,435	18,719
Student [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 220	$ 279

XML

Fair Values of Assets and Liabilities - Adjusted Carrying Values for Assets Measured at Fair Value on Nonrecurring Basis (Detail) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans	$ 136	$ 40
Other assets	46	57
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans	136	40
Other assets	$ 46	$ 57

XML

Deposits - Composition of Deposits (Detail) - USD ($) $ in Millions		Dec. 31, 2019	Dec. 31, 2018
Banking and Thrift [Abstract]
Noninterest-bearing deposits		$ 75,590	$ 81,811
Interest-bearing deposits
Interest checking		75,949	73,994
Money market savings		120,082	100,396
Savings accounts		47,401	44,720
Time deposits		42,894	44,554
Total interest-bearing deposits	[1]	286,326	263,664
Total deposits		$ 361,916	$ 345,475

[1] lncludes time deposits greater than $250,000 balances of $7.8 billion and $15.3 billion at December 31, 2019 and 2018, respectively.

XML

Shareholders' Equity - Impact to Net Income for Items Reclassified out of Accumulated Other Comprehensive Income and into Earnings (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Realized gains (losses) on sale of investment securities	$ 73	$ 30	$ 57
Amortization of unrealized gains on securities transferred from available-for-sale to held-to-maturity, Interest income	17,494	16,173	14,346
Realized gains (losses) on derivative hedges	(4,442)	(3,254)	(1,966)
Actuarial gains (losses) and prior service cost (credit) amortization	(1,618)	(1,709)	(2,529)
Applicable income taxes	(1,648)	(1,554)	(1,264)
Net income	6,946	7,124	6,253
Reclassification Out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net income	(15)	(69)	(48)
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains (Losses) on Investment Securities Available-For-Sale [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Realized gains (losses) on sale of investment securities	73	30	57
Applicable income taxes	(18)	(7)	(22)
Net income	55	23	35
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains (Losses) on Investment Securities Transferred From Available For Sale to Held To Maturity [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Amortization of unrealized gains on securities transferred from available-for-sale to held-to-maturity, Interest income	7	9	13
Applicable income taxes	(2)	(2)	(5)
Net income	5	7	8
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains (Losses) on Derivative Hedges [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Realized gains (losses) on derivative hedges	(11)	5	(30)
Applicable income taxes	3	(2)	11
Net income	(8)	3	(19)
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains (Losses) on Retirement Plans [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Actuarial gains (losses) and prior service cost (credit) amortization	(89)	(137)	(117)
Applicable income taxes	22	35	45
Net income	$ (67)	$ (102)	$ (72)

XML

Long-Term Debt - Summary of Long-term Debt (Parenthetical) (Detail)	Dec. 31, 2019
Medium-term Notes [Member]
Debt Instrument [Line Items]
Weighted-average interest rate	2.87%
Federal Home Loan Bank Advances [Member]
Debt Instrument [Line Items]
Weighted-average interest rate	2.42%
Bank Notes [Member]
Debt Instrument [Line Items]
Weighted-average interest rate	2.54%

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Shareholders' Equity - Number of Shares Issued and Outstanding and Carrying Amount of Preferred Stock (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Class of Stock [Line Items]
Shares Issued and Outstanding	209,510	209,510
Liquidation Preference	$ 6,176	$ 6,176
Discount	192	192
Carrying Amount	$ 5,984	$ 5,984
Series A [Member]
Class of Stock [Line Items]
Shares Issued and Outstanding	12,510	12,510
Liquidation Preference	$ 1,251	$ 1,251
Discount	145	145
Carrying Amount	$ 1,106	$ 1,106
Series B [Member]
Class of Stock [Line Items]
Shares Issued and Outstanding	40,000	40,000
Liquidation Preference	$ 1,000	$ 1,000
Carrying Amount	$ 1,000	$ 1,000
Series F [Member]
Class of Stock [Line Items]
Shares Issued and Outstanding	44,000	44,000
Liquidation Preference	$ 1,100	$ 1,100
Discount	12	12
Carrying Amount	$ 1,088	$ 1,088
Series H [Member]
Class of Stock [Line Items]
Shares Issued and Outstanding	20,000	20,000
Liquidation Preference	$ 500	$ 500
Discount	13	13
Carrying Amount	$ 487	$ 487
Series I [Member]
Class of Stock [Line Items]
Shares Issued and Outstanding	30,000	30,000
Liquidation Preference	$ 750	$ 750
Discount	5	5
Carrying Amount	$ 745	$ 745
Series J [Member]
Class of Stock [Line Items]
Shares Issued and Outstanding	40,000	40,000
Liquidation Preference	$ 1,000	$ 1,000
Discount	7	7
Carrying Amount	$ 993	$ 993
Series K [Member]
Class of Stock [Line Items]
Shares Issued and Outstanding	23,000	23,000
Liquidation Preference	$ 575	$ 575
Discount	10	10
Carrying Amount	$ 565	$ 565

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Stock-Based Compensation - Summary of Stock Options Outstanding and Exercised Under Prior and Existing Stock Incentive Plans (Detail) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Stock Options/Shares Outstanding, Weighted-Average Exercise Price, and Additional Disclosures [Abstract]
Stock Options/Shares, Outstanding at Beginning of the Period	9,115,010	12,668,467	17,059,241
Stock Options/Shares, Granted			1,066,188
Stock Options/Shares, Exercised	(3,333,467)	(3,443,494)	(5,389,741)
Stock Options/Shares, Cancelled	(63,287)	(109,963)	(67,221)
Stock Options/Shares, Outstanding at End of the Period	5,718,256	9,115,010	12,668,467
Stock Options/Shares, Exercisable at End of Period	4,869,805	7,372,036	9,647,937
Weighted-Average Exercise Price, Outstanding at Beginning of the Period	$ 34.52	$ 32.15	$ 29.95
Weighted-Average Exercise Price, Granted			54.97
Weighted-Average Exercise Price, Exercised	26.36	25.41	29.58
Weighted-Average Exercise Price, Cancelled	36.74	46.72	43.31
Weighted-Average Exercise Price, Outstanding at End of the Period	39.25	34.52	32.15
Weighted-Average Exercise Price, Exercisable at End of Period	$ 37.67	$ 31.61	$ 27.87
Weighted-Average Remaining Contractual Term, Outstanding at the End of the Period	4 years 4 months 24 days	4 years 3 months 18 days	4 years 6 months
Weighted-Average Remaining Contractual Term, Exercisable at End of Period	4 years	3 years 6 months	3 years 3 months 18 days
Aggregate Intrinsic Value, Outstanding at the End of the Period	$ 115	$ 102	$ 272
Aggregate Intrinsic Value, Exercisable at End of Period	$ 105	$ 104	$ 248

XML

Shareholder' Equity

12 Months Ended

Dec. 31, 2019

Federal Home Loan Banks [Abstract]

Shareholders' Equity

  NOTE 14   Shareholders’  Equity

At December 31, 2019 and 2018, the Company had authority to issue 4 billion shares of common stock and 50 million shares of preferred stock. The Company had 1.5 billion and 1.6 billion shares of common stock outstanding at December 31, 2019 and

2018, respectively. The Company had 45 million shares reserved for future issuances, primarily under its stock incentive plans at December 31, 2019.

The number of shares issued and outstanding and the carrying amount of each outstanding series of the Company’s preferred stock were as follows:

	2019								2018
At December 31 (Dollars in Millions)	Shares Issued and Outstanding		Liquidation Preference		Discount		Carrying Amount		Shares Issued and Outstanding		Liquidation Preference		Discount		Carrying Amount
Series A		12,510	$	1,251	$	145	$	1,106		12,510	$	1,251	$	145	$	1,106
Series B		40,000		1,000		–		1,000		40,000		1,000		–		1,000
Series F		44,000		1,100		12		1,088		44,000		1,100		12		1,088
Series H		20,000		500		13		487		20,000		500		13		487
Series I		30,000		750		5		745		30,000		750		5		745
Series J		40,000		1,000		7		993		40,000		1,000		7		993
Series K		23,000		575		10		565		23,000		575		10		565
Total preferred stock(a)		209,510	$	6,176	$	192	$	5,984		209,510	$	6,176	$	192	$	5,984

(a) The par value of all shares issued and outstanding at December 31, 2019 and 2018, was $1.00 per share.

During 2018, the Company issued depositary shares representing an ownership interest in 23,000 shares of Series K Non-Cumulative Perpetual Preferred Stock with a liquidation preference of $25,000 per share (the “Series K Preferred Stock”). The Series K Preferred Stock has no stated maturity and will not be subject to any sinking fund or other obligation of the Company. Dividends, if declared, will accrue and be payable quarterly, in arrears, at a rate per annum equal to 5.50 percent. The Series K Preferred Stock is redeemable at the Company’s option, in whole or in part, on or after October 15, 2023. The Series K Preferred Stock is redeemable at the Company’s option, in whole, but not in part, prior to October 15, 2023 within 90 days following an official administrative or judicial decision, amendment to, or change in the laws or regulations that would not allow the Company to treat the full liquidation value of the Series K Preferred Stock as Tier 1 capital for purposes of the capital adequacy guidelines of the Federal Reserve Board.

During 2017, the Company issued depositary shares representing an ownership interest in 40,000 shares of Series J Non-Cumulative Perpetual Preferred Stock with a liquidation preference of $25,000 per share (the “Series J Preferred Stock”). The Series J Preferred Stock has no stated maturity and will not be subject to any sinking fund or other obligation of the Company. Dividends, if declared, will accrue and be payable semiannually, in arrears, at a rate per annum equal to 5.300 percent from the date of issuance to, but excluding, April 15, 2027, and thereafter will accrue and be payable quarterly at a floating rate per annum equal to the three-month London Interbank Offered Rate (“LIBOR”) plus 2.914 percent. The Series J Preferred Stock is redeemable at the Company’s option, in whole or in part, on or after April 15, 2027. The Series J Preferred Stock is redeemable at the Company’s option, in whole, but not in part, prior to April 15, 2027 within 90 days following an official administrative or judicial decision, amendment to, or change in the laws or regulations that would not allow the

Company to treat the full liquidation value of the Series J Preferred Stock as Tier 1 capital for purposes of the capital adequacy guidelines of the Federal Reserve Board.

During 2015, the Company issued depositary shares representing an ownership interest in 30,000 shares of Series I Non-Cumulative Perpetual Preferred Stock with a liquidation preference of $25,000 per share (the “Series I Preferred Stock”). The Series I Preferred Stock has no stated maturity and will not be subject to any sinking fund or other obligation of the Company. Dividends, if declared, will accrue and be payable semiannually, in arrears, at a rate per annum equal to 5.125 percent from the date of issuance to, but excluding, January 15, 2021, and thereafter will accrue and be payable quarterly at a floating rate per annum equal to three-month LIBOR plus 3.486 percent. The Series I Preferred Stock is redeemable at the Company’s option, in whole or in part, on or after January 15, 2021. The Series I Preferred Stock is redeemable at the Company’s option, in whole, but not in part, prior to January 15, 2021 within 90 days following an official administrative or judicial decision, amendment to, or change in the laws or regulations that would not allow the Company to treat the full liquidation value of the Series I Preferred Stock as Tier 1 capital for purposes of the capital adequacy guidelines of the Federal Reserve Board.

During 2013, the Company issued depositary shares representing an ownership interest in 20,000 shares of Series H Non-Cumulative Perpetual Preferred Stock with a liquidation preference of $25,000 per share (the “Series H Preferred Stock”). The Series H Preferred Stock has no stated maturity and will not be subject to any sinking fund or other obligation of the Company. Dividends, if declared, will accrue and be payable quarterly, in arrears, at a rate per annum equal to 5.15 percent. The Series H Preferred Stock is redeemable at the Company’s option, subject to the prior approval of the Federal Reserve Board.

During 2012, the Company issued depositary shares representing an ownership interest in 44,000 shares of Series F Non-Cumulative Perpetual Preferred Stock with a liquidation preference of $25,000 per share (the “Series F Preferred Stock”). The Series F Preferred Stock has no stated maturity and will not be subject to any sinking fund or other obligation of the Company. Dividends, if declared, will accrue and be payable quarterly, in arrears, at a rate per annum equal to 6.50 percent from the date of issuance to, but excluding, January 15, 2022, and thereafter at a floating rate per annum equal to three-month LIBOR plus 4.468 percent. The Series F Preferred Stock is redeemable at the Company’s option, in whole or in part, on or after January 15, 2022. The Series F Preferred Stock is redeemable at the Company’s option, in whole, but not in part, prior to January 15, 2022 within 90 days following an official administrative or judicial decision, amendment to, or change in the laws or regulations that would not allow the Company to treat the full liquidation value of the Series F Preferred Stock as Tier 1 capital for purposes of the capital adequacy guidelines of the Federal Reserve Board. 

During 2010, the Company issued depositary shares representing an ownership interest in 5,746 shares of Series A Non-Cumulative Perpetual Preferred Stock (the “Series A Preferred Stock”) to investors, in exchange for their portion of USB Capital IX Income Trust Securities. During 2011, the Company issued depositary shares representing an ownership interest in 6,764 shares of Series A Preferred Stock to USB Capital IX, thereby settling the stock purchase contract established between the Company and USB Capital IX as part of the 2006 issuance of USB Capital IX Income Trust Securities. The preferred shares were issued to USB Capital IX for the purchase price specified in the stock forward purchase contract. The Series A Preferred Stock has a liquidation preference of $100,000 per share, no stated maturity and will not be subject to any sinking fund or other obligation of the Company. Dividends, if

declared, will accrue and be payable quarterly, in arrears, at a rate per annum equal to the greater of three-month LIBOR plus 1.02 percent or 3.50 percent. The Series A Preferred Stock is redeemable at the Company’s option, subject to prior approval by the Federal Reserve Board.

During 2006, the Company issued depositary shares representing an ownership interest in 40,000 shares of Series B Non-Cumulative Perpetual Preferred Stock with a liquidation preference of $25,000 per share (the “Series B Preferred Stock”). The Series B Preferred Stock has no stated maturity and will not be subject to any sinking fund or other obligation of the Company. Dividends, if declared, will accrue and be payable quarterly, in arrears, at a rate per annum equal to the greater of three-month LIBOR plus .60 percent, or 3.50 percent. The Series B Preferred Stock is redeemable at the Company’s option, subject to the prior approval of the Federal Reserve Board.

Dividends for certain of the Company’s outstanding series of preferred stock described above are, or will in the future be, calculated by reference to LIBOR. The outstanding series contain fallback provisions in the event that LIBOR is no longer published or quoted, but these fallback provisions have not yet been utilized.

During 2019, 2018 and 2017, the Company repurchased shares of its common stock under various authorizations approved by its Board of Directors. As of December 31, 2019, the approximate dollar value of shares that may yet be purchased by the Company under the current Board of Directors approved authorization was $2.4 billion.

The following table summarizes the Company’s common stock repurchased in each of the last three years:

(Dollars and Shares in Millions)	Shares		Value
2019		81	$	4,515
2018		54		2,844
2017		49		2,622

Shareholders’ equity is affected by transactions and valuations of asset and liability positions that require adjustments to accumulated other comprehensive income (loss). The reconciliation of the transactions affecting accumulated other comprehensive income (loss) included in shareholders’ equity for the years ended December 31, is as follows:

(Dollars in Millions)	Unrealized Gains (Losses) on Investment Securities Available-For-Sale			Unrealized Gains (Losses) on Investment Securities Transferred From Available-For-Sale to Held-To-Maturity			Unrealized Gains (Losses) on Derivative Hedges			Unrealized Gains (Losses) on Retirement Plans			Foreign Currency Translation			Total
2019
Balance at beginning of period	$	(946	)	$	14		$	112		$	(1,418	)	$	(84	)	$	(2,322	)
Changes in unrealized gains and losses		1,693			–			(229	)		(380	)		–			1,084
Unrealized gains and losses on held-to-maturity investment securities transferred to available-for-sale		150			(9	)		–			–			–			141
Foreign currency translation adjustment(a)		–			–			–			–			26			26
Reclassification to earnings of realized gains and losses		(73	)		(7	)		11			89			–			20
Applicable income taxes		(445	)		2			55			73			(7	)		(322	)
Balance at end of period	$	379		$	–		$	(51	)	$	(1,636	)	$	(65	)	$	(1,373	)
2018
Balance at beginning of period	$	(357	)	$	17		$	71		$	(1,066	)	$	(69	)	$	(1,404	)
Revaluation of tax related balances(b)		(77	)		4			15			(229	)		(13	)		(300	)
Changes in unrealized gains and losses		(656	)		–			39			(302	)		–			(919	)
Foreign currency translation adjustment(a)		–			–			–			–			3			3
Reclassification to earnings of realized gains and losses		(30	)		(9	)		(5	)		137			–			93
Applicable income taxes		174			2			(8	)		42			(5	)		205
Balance at end of period	$	(946	)	$	14		$	112		$	(1,418	)	$	(84	)	$	(2,322	)
2017
Balance at beginning of period	$	(431	)	$	25		$	55		$	(1,113	)	$	(71	)	$	(1,535	)
Changes in unrealized gains and losses		178			–			(5	)		(41	)		–			132
Foreign currency translation adjustment(a)		–			–			–			–			(2	)		(2	)
Reclassification to earnings of realized gains and losses		(57	)		(13	)		30			117			–			77
Applicable income taxes		(47	)		5			(9	)		(29	)		4			(76	)
Balance at end of period	$	(357	)	$	17		$	71		$	(1,066	)	$	(69	)	$	(1,404	)

(a) Represents the impact of changes in foreign currency exchange rates on the Company’s investment in foreign operations and related hedges.

(b) Reflects the adoption of new accounting guidance on January 1, 2018 to reclassify the impact of the reduced federal statutory rate for corporations included in 2017 tax reform legislation from accumulated other comprehensive income to retained earnings.

Additional detail about the impact to net income for items reclassified out of accumulated other comprehensive income (loss) and into earnings for the years ended December 31, is as follows:

	Impact to Net Income									Affected Line Item in the Consolidated Statement of Income
(Dollars in Millions)	2019			2018			2017
Unrealized gains (losses) on investment securities available-for-sale
Realized gains (losses) on sale of investment securities	$	73		$	30		$	57		Total securities gains (losses), net
		(18	)		(7	)		(22	)	Applicable income taxes
		55			23			35		Net-of-tax
Unrealized gains (losses) on investment securities transferred from available-for-sale to held-to-maturity
Amortization of unrealized gains		7			9			13		Interest income
		(2	)		(2	)		(5	)	Applicable income taxes
		5			7			8		Net-of-tax
Unrealized gains (losses) on derivative hedges
Realized gains (losses) on derivative hedges		(11	)		5			(30	)	Interest expense
		3			(2	)		11		Applicable income taxes
		(8	)		3			(19	)	Net-of-tax
Unrealized gains (losses) on retirement plans
Actuarial gains (losses) and prior service cost (credit) amortization		(89	)		(137	)		(117	)	Other noninterest expense
		22			35			45		Applicable income taxes
		(67	)		(102	)		(72	)	Net-of-tax
Total impact to net income	$	(15	)	$	(69	)	$	(48	)

Regulatory Capital The Company uses certain measures defined by bank regulatory agencies to assess its capital. The regulatory capital requirements effective for the Company follow Basel III, which includes two comprehensive methodologies for calculating risk-weighted assets: a general standardized approach and more risk-sensitive advanced approaches. Effective December 31, 2019, the Company is no longer subject to calculating its capital adequacy as a percentage of risk-weighted assets under advanced approaches. Prior to December 31, 2019, the Company’s capital adequacy was evaluated against the methodology that was most restrictive.

Tier 1 capital is considered core capital and includes common shareholders’ equity adjusted for the aggregate impact of certain items included in other comprehensive income (loss) (“common equity tier 1 capital”), plus qualifying preferred stock, trust

preferred securities and noncontrolling interests in consolidated subsidiaries subject to certain limitations. Total risk-based capital includes Tier 1 capital and other items such as subordinated debt and the allowance for credit losses. Capital measures are stated as a percentage of risk-weighted assets, which are measured based on their perceived credit and operational risks and include certain off-balance sheet exposures, such as unfunded loan commitments, letters of credit, and derivative contracts. As of December 31, 2019, the Company is subject to leverage ratio requirements under each methodology, which is defined as Tier 1 capital as a percentage of adjusted average assets under the standardized approach and Tier 1 capital as a percentage of total on- and off-balance sheet leverage exposure under the advanced approaches.

The following tables provide a summary of the regulatory capital requirements in effect, along with the actual components and ratios  for the Company and its bank subsidiary, at December 31, 2019 and 2018:

	U.S. Bancorp						U.S. Bank National Association
(Dollars in Millions)	2019			2018			2019			2018
Basel III standardized approach:
Common shareholders’ equity	$	45,869		$	45,045		$	48,592		$	47,728
Less intangible assets
Goodwill (net of deferred tax liability)		(8,788	)		(8,549	)		(8,806	)		(8,566	)
Other disallowed intangible assets		(677	)		(601	)		(710	)		(732	)
Other(a)		(691	)		(1,171	)		38			(112	)
Total common equity tier 1 capital		35,713			34,724			39,114			38,318
Qualifying preferred stock		5,984			5,984			–			–
Noncontrolling interests eligible for tier 1 capital		28			36			28			36
Other(b)		(4	)		(3	)		(4	)		(3	)
Total tier 1 capital		41,721			40,741			39,138			38,351
Eligible portion of allowance for credit losses		4,491			4,441			4,491			4,441
Subordinated debt and noncontrolling interests eligible for tier 2 capital		3,532			2,996			3,365			3,168
Total tier 2 capital		8,023			7,437			7,856			7,609
Total risk-based capital	$	49,744		$	48,178		$	46,994		$	45,960
Risk-weighted assets	$	391,269		$	381,661		$	383,560		$	374,299
Common equity tier 1 capital as a percent of risk-weighted assets		9.1	%		9.1	%		10.2	%		10.2	%
Tier 1 capital as a percent of risk-weighted assets		10.7			10.7			10.2			10.2
Total risk-based capital as a percent of risk-weighted assets		12.7			12.6			12.3			12.3
Tier 1 capital as a percent of adjusted quarterly average assets (leverage ratio)		8.8			9.0			8.4			8.6
Basel III advanced approaches(c):
Common shareholders’ equity				$	45,045					$	47,728
Less intangible assets
Goodwill (net of deferred tax liability)					(8,549	)					(8,566	)
Other disallowed intangible assets					(601	)					(732	)
Other(a)					(1,171	)					(112	)
Total common equity tier 1 capital					34,724						38,318
Qualifying preferred stock					5,984						–
Noncontrolling interests eligible for tier 1 capital					36						36
Other(b)					(3	)					(3	)
Total tier 1 capital					40,741						38,351
Eligible portion of allowance for credit losses					1,399						1,364
Subordinated debt and noncontrolling interests eligible for tier 2 capital					2,996						3,168
Total tier 2 capital					4,395						4,532
Total risk-based capital				$	45,136					$	42,883
Risk-weighted assets				$	295,002					$	287,897
Common equity tier 1 capital as a percent of risk-weighted assets					11.8	%					13.3	%
Tier 1 capital as a percent of risk-weighted assets					13.8						13.3
Total risk-based capital as a percent of risk-weighted assets					15.3						14.9
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure (total leverage exposure ratio)		7.0	%		7.2			6.7	%		6.9

(a) Includes the impact of items included in other comprehensive income (loss), such as unrealized gains (losses) on available-for-sale securities, accumulated net gains on cash flow hedges, pension liability adjustments, etc., and the portion of deferred tax assets related to net operating loss and tax credit carryforwards not eligible for common equity tier 1 capital.

(b) Includes the remaining portion of deferred tax assets not eligible for total tier 1 capital.

(c) Effective December 31, 2019, the Company is no longer subject to calculating its, or its bank subsidiary’s, capital adequacy as a percentage of risk-weighted assets under advanced approaches.

	Minimum(a)			Well- Capitalized
Bank Regulatory Capital Requirements
2019
Common equity tier 1 capital as a percent of risk-weighted assets		7.000	%		6.500	%
Tier 1 capital as a percent of risk-weighted assets		8.500			8.000
Total risk-based capital as a percent of risk-weighted assets		10.500			10.000
Tier 1 capital as a percent of adjusted quarterly average assets (leverage ratio)		4.000			5.000
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure (total leverage exposure ratio)		3.000			3.000
2018
Common equity tier 1 capital as a percent of risk-weighted assets		6.375	%		6.500	%
Tier 1 capital as a percent of risk-weighted assets		7.875			8.000
Total risk-based capital as a percent of risk-weighted assets		9.875			10.000
Tier 1 capital as a percent of adjusted quarterly average assets (leverage ratio)		4.000			5.000
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure (total leverage exposure ratio)		3.000			3.000

(a) The minimum common equity tier 1 capital, tier 1 capital and total risk-based capital ratio requirements reflect a capital conservation buffer requirement of 2.5 percent and 1.875 percent for 2019 and 2018, respectively. Banks and financial services holding companies must maintain minimum capital levels, including a capital conservation buffer requirement, to avoid limitations on capital distributions and certain discretionary compensation payments.

Noncontrolling interests principally represent third-party investors’ interests in consolidated entities, including preferred stock of consolidated subsidiaries. During 2006, the Company’s banking subsidiary formed USB Realty Corp., a real estate investment trust, for the purpose of issuing 5,000 shares of Fixed-to-Floating Rate Exchangeable Non-cumulative Perpetual Series A Preferred Stock with a liquidation preference of $100,000 per share (“Series A Preferred Securities”) to third-party investors. Dividends on the Series A Preferred Securities, if declared, will accrue and be payable quarterly, in arrears, at a rate per annum equal to three-month LIBOR plus 1.147 percent. If USB Realty Corp. has not declared a dividend on the Series A Preferred Securities before the dividend payment date for any 

dividend period, such dividend shall not be cumulative and shall cease to accrue and be payable, and USB Realty Corp. will have no obligation to pay dividends accrued for such dividend period, whether or not dividends on the Series A Preferred Securities are declared for any future dividend period.

The Series A Preferred Securities will be redeemable, in whole or in part, at the option of USB Realty Corp. on each fifth anniversary after the dividend payment date occurring in January 2012. Any redemption will be subject to the approval of the Office of the Comptroller of the Currency. During 2016, the Company purchased 500 shares of the Series A Preferred Securities held by third-party investors. As of December 31, 2019, 4,500 shares of the Series A Preferred Securities remain outstanding.

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Employee Benefits - Summary of Plan Investment Assets Measured at Fair Value (Parenthetical) (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Real Estate Equity Securities [Member] | Level 1 [Member] | Domestic Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value		$ 56
Real Estate Equity Securities [Member] | Level 1 [Member] | International Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value		53
Collective Investment Fund Mid-Small Cap Equity Securities [Member] | Domestic Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets measured at fair value	$ 323	$ 340

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Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

  NOTE 18   Income Taxes

The components of income tax expense were:

Year Ended December 31 (Dollars in Millions)	2019			2018			2017
Federal
Current	$	1,162		$	1,287		$	2,086
Deferred		166			(148	)		(1,180	)
Federal income tax		1,328			1,139			906
State
Current		379			395			201
Deferred		(59	)		20			157
State income tax		320			415			358
Total income tax provision	$	1,648		$	1,554		$	1,264

A reconciliation of expected income tax expense at the federal statutory rate of 21 percent for 2019 and 2018 and 35 percent for 2017 to the Company’s applicable income tax expense follows:

Year Ended December 31 (Dollars in Millions)	2019			2018			2017
Tax at statutory rate	$	1,805		$	1,822		$	2,631
State income tax, at statutory rates, net of federal tax benefit		355			352			281
Tax effect of
Revaluation of tax related assets and liabilities(a)		—			—			(910	)
Tax credits and benefits, net of related expenses		(424	)		(513	)		(774	)
Tax-exempt income		(120	)		(130	)		(200	)
Nondeductible legal and regulatory expenses		23			52			213
Other items(b)		9			(29	)		23
Applicable income taxes	$	1,648		$	1,554		$	1,264

(a) In late 2017, tax legislation was enacted that, among other provisions, reduced the federal statutory rate for corporations from 35 percent to 21 percent effective in 2018. In accordance with generally accepted accounting principles, the Company revalued its deferred tax assets and liabilities at December 31, 2017, resulting in an estimated net tax benefit of $910 million, which the Company recorded in 2017.

(b) Includes excess tax benefits associated with stock-based compensation and adjustments related to deferred tax assets and liabilities.

The tax effects of fair value adjustments on securities available-for-sale, derivative instruments in cash flow hedges, foreign currency translation adjustments, and pension and post-retirement plans are recorded directly to shareholders’ equity as part of other comprehensive income (loss).

In preparing its tax returns, the Company is required to interpret complex tax laws and regulations and utilize income and cost allocation methods to determine its taxable income. On an ongoing basis, the Company is subject to examinations by federal, state, local and foreign taxing authorities that may give rise to differing interpretations of these complex laws, regulations

and methods. Due to the nature of the examination process, it generally takes years before these examinations are completed and matters are resolved. Federal tax examinations for all years ending through December 31, 2010, and years ending December 31, 2013 and December 31, 2014 are completed and resolved. The Company’s tax returns for the years ended December 31, 2011, 2012, 2015 and 2016 are under examination by the Internal Revenue Service. The years open to examination by state and local government authorities vary by jurisdiction.

A reconciliation of the changes in the federal, state and foreign uncertain tax position balances are summarized as follows:

Year Ended December 31 (Dollars in Millions)	2019			2018			2017
Balance at beginning of period	$	335		$	287		$	302
Additions for tax positions taken in prior years		168			93			3
Additions for tax positions taken in the current year		6			10			9
Exam resolutions		(62	)		(51	)		(23	)
Statute expirations		(15	)		(4	)		(4	)
Balance at end of period	$	432		$	335		$	287

The total amount of uncertain tax positions that, if recognized, would impact the effective income tax rate as of December 31, 2019, 2018 and 2017, were $274 million, $273 million and $265 million, respectively. The Company classifies interest and penalties related to uncertain tax positions as a component of income tax expense. At December 31, 2019, the Company’s uncertain tax position balance included $35 million of accrued interest and penalties. During the years ended December 31, 

2019, 2018 and 2017 the Company recorded approximately $7 million, $(25) million and $16 million, respectively, in interest and penalties on uncertain tax positions.

Deferred income tax assets and liabilities reflect the tax effect of estimated temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for the same items for income tax reporting purposes.

The significant components of the Company’s net deferred tax asset (liability) follows:

At December 31 (Dollars in Millions)	2019			2018
Deferred Tax Assets
Federal, state and foreign net operating loss and credit carryforwards	$	2,592		$	2,699
Allowance for credit losses		1,155			1,141
Accrued expenses		485			508
Obligation for operating leases		328			—
Pension and postretirement benefits		193			85
Partnerships and other investment assets		91			69
Stock compensation		78			79
Fixed assets		2			58
Securities available-for-sale and financial instruments		—			278
Other deferred tax assets, net		257			268
Gross deferred tax assets		5,181			5,185
Deferred Tax Liabilities
Leasing activities		(2,700	)		(2,652	)
Goodwill and other intangible assets		(763	)		(703	)
Mortgage servicing rights		(546	)		(642	)
Right of use assets		(282	)		—
Loans		(139	)		(168	)
Securities available-for-sale and financial instruments		(111	)		—
Other deferred tax liabilities, net		(131	)		(102	)
Gross deferred tax liabilities		(4,672	)		(4,267	)
Valuation allowance		(127	)		(109	)
Net Deferred Tax Asset	$	382		$	809

The Company has approximately $2.0 billion of federal, state and foreign net operating loss carryforwards which expire at various times beginning in 2020. A substantial portion of these carryforwards relate to state-only net operating losses, which are subject to a full valuation allowance as they are not expected to be realized within the carryforward period. Management has determined it is more likely than not the other net deferred tax assets could be realized through carry back to taxable income in

prior years, future reversals of existing taxable temporary differences and future taxable income.

In addition, the Company has $2.5 billion of federal credit carryforwards which expire at various times through 2039 which are not subject to a valuation allowance as management believes that it is more likely than not that the credits will be utilized within the carryforward period.

At December 31, 2019, retained earnings included approximately $102 million of base year reserves of acquired thrift institutions, for which no deferred federal income tax liability has been recognized. These base year reserves would be recaptured if certain subsidiaries of the Company cease to qualify as a bank 

for federal income tax purposes. The base year reserves also remain subject to income tax penalty provisions that, in general, require recapture upon certain stock redemptions of, and excess distributions to, stockholders.

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Employee Benefits (Tables)

12 Months Ended

Dec. 31, 2019

Retirement Benefits [Abstract]

Summary of Changes in Projected Benefit Obligation, Plan Assets, Funded Status, Amounts Recognized in Consolidated Balance Sheet and Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in benefit obligations and plan assets for the years ended December 31, and the funded status and amounts recognized in the Consolidated Balance Sheet at December 31 for the retirement plans:

	Pension Plans						Postretirement Welfare Plan
(Dollars in Millions)	2019			2018			2019			2018
Change In Projected Benefit Obligation(a)
Benefit obligation at beginning of measurement period	$	5,507		$	5,720		$	54		$	68
Service cost		192			208			–			–
Interest cost		249			224			2			2
Participants’ contributions		–			–			7			8
Actuarial loss (gain)		1,100			(440	)		(4	)		(7	)
Lump sum settlements		(56	)		(50	)		–			–
Benefit payments		(163	)		(155	)		(13	)		(18	)
Federal subsidy on benefits paid		–			–			1			1
Benefit obligation at end of measurement period(b)	$	6,829		$	5,507		$	47		$	54
Change In Fair Value Of Plan Assets(c)
Fair value at beginning of measurement period	$	4,936		$	5,482		$	81		$	87
Actual return on plan assets		1,095			(365	)		6			–
Employer contributions		26			24			4			5
Participants’ contributions		–			–			6			7
Lump sum settlements		(56	)		(50	)		–			–
Benefit payments		(163	)		(155	)		(13	)		(18	)
Fair value at end of measurement period	$	5,838		$	4,936		$	84		$	81
Funded (Unfunded) Status	$	(991	)	$	(571	)	$	37		$	27
Components Of The Consolidated Balance Sheet
Noncurrent benefit asset	$	–		$	–		$	37		$	27
Current benefit liability		(25	)		(23	)		–			–
Noncurrent benefit liability		(966	)		(548	)		–			–
Recognized amount	$	(991	)	$	(571	)	$	37		$	27
Accumulated Other Comprehensive Income (Loss), Pretax
Net actuarial gain (loss)	$	(2,271	)	$	(1,981	)	$	68		$	66
Net prior service credit (cost)		–			–			14			18
Recognized amount	$	(2,271	)	$	(1,981	)	$	82		$	84

(a) The increase and the decrease in the projected benefit obligation for 2019 and 2018, respectively, were primarily due to discount rate changes.

(b) At December 31, 2019 and 2018, the accumulated benefit obligation for all pension plans was $6.2 billion and $5.0 billion.

(c) The increase and the decrease in the fair value of plan assets for 2019 and 2018, respectively, were primary due to market conditions.

Pension Plans with Benefit Obligations in Excess of Plan Assets

The following table provides information for pension plans with benefit obligations in excess of plan assets at December 31:

(Dollars in Millions)	2019		2018
Pension Plans with Projected Benefit Obligations in Excess of Plan Assets
Projected benefit obligation	$	6,829	$	5,507
Fair value of plan assets		5,838		4,936
Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets
Accumulated benefit obligation	$	553	$	467
Fair value of plan assets		–		–

Components of Net Periodic Benefit Cost and Other Amounts Recognized in Accumulated Other Comprehensive Income (Loss)

The following table sets forth the components of net periodic benefit cost and other amounts recognized in accumulated other comprehensive income (loss) for the years ended December 31 for the retirement plans:

	Pension Plans									Postretirement Welfare Plan
(Dollars in Millions)	2019			2018			2017			2019			2018			2017
Components Of Net Periodic Benefit Cost
Service cost	$	192		$	208		$	187		$	–		$	–		$	–
Interest cost		249			224			220			2			2			2
Expected return on plan assets		(383	)		(379	)		(284	)		(3	)		(3	)		(3	)
Prior service cost (credit) and transition obligation (asset) amortization		–			–			(2	)		(3	)		(3	)		(3	)
Actuarial loss (gain) amortization		98			146			127			(6	)		(6	)		(5	)
Net periodic benefit cost	$	156		$	199		$	248		$	(10	)	$	(10	)	$	(9	)
Other Changes In Plan Assets And Benefit Obligations
Recognized In Other Comprehensive Income (Loss)
Net actuarial gain (loss) arising during the year	$	(388	)	$	(305	)	$	(48	)	$	7		$	3		$	7
Net actuarial loss (gain) amortized during the year		98			146			127			(6	)		(6	)		(5	)
Net prior service cost (credit) and transition obligation (asset) amortized during the year		–			–			(2	)		(3	)		(3	)		(3	)
Total recognized in other comprehensive income (loss)	$	(290	)	$	(159	)	$	77		$	(2	)	$	(6	)	$	(1	)
Total recognized in net periodic benefit cost and other comprehensive income (loss)	$	(446	)	$	(358	)	$	(171	)	$	8		$	4		$	8

Weighted Average Assumptions to Determine Projected Benefit Obligations

The following table sets forth weighted-average assumptions used to determine the projected benefit obligations at December 31:

	Pension Plans						Postretirement Welfare Plan
(Dollars in Millions)	2019			2018			2019			2018
Discount rate(a)		3.40	%		4.45	%		2.80	%		4.05	%
Cash balance interest crediting rate		3.00			3.00			*			*
Rate of compensation increase(b)		3.56			3.52			*			*
Health care cost trend rate(c)
Prior to age 65								6.25	%		6.50	%
After age 65								6.25	%		10.00	%

(a) The discount rates were developed using a cash flow matching bond model with a modified duration for the qualified pension plan, non-qualified pension plan and postretirement welfare plan of 15.8, 12.3, and 6.1 years, respectively, for 2019, and 14.7, 11.5 and 5.9 years, respectively, for 2018.

(b) Determined on an active liability-weighted basis.

(c) The 2019 and 2018 pre-65 and post-65 rates are both assumed to decrease gradually to 5.00 percent by 2025 and remain at this level thereafter.

* Not applicable

Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost

The following table sets forth weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:

	Pension Plans									Postretirement Welfare Plan
(Dollars in Millions)	2019			2018			2017			2019			2018			2017
Discount rate(a)		4.45	%		3.84	%		4.27	%		4.05	%		3.34	%		3.57	%
Cash balance interest crediting rate		3.00			3.00			3.00			*			*			*
Expected return on plan assets(b)		7.25			7.25			7.25			3.50			3.50			3.50
Rate of compensation increase(c)		3.52			3.56			3.58			*			*			*
Health care cost trend rate(d)
Prior to age 65											6.50	%		6.75	%		7.00	%
After age 65											10.00			6.75			7.00

(a) The discount rates were developed using a cash flow matching bond model with a modified duration for the qualified pension plan, non-qualified pension plan and postretirement welfare plan of 14.7, 11.5, and 5.9 years, respectively, for 2019, and 15.8, 12.3 and 6.1 years, respectively, for 2018.

(b) With the help of an independent pension consultant, the Company considers several sources when developing its expected long-term rates of return on plan assets assumptions, including, but not limited to, past returns and estimates of future returns given the plans’ asset allocation, economic conditions, and peer group LTROR information. The Company determines its expected long-term rates of return reflecting current economic conditions and plan assets.

(c) Determined on an active liability weighted basis.

(d) The 2019, 2018 and 2017 pre-65 and post-65 rates are both assumed to decrease gradually to 5.00 percent by 2025 and remain at that level thereafter.

* Not applicable

Summary of Plan Investment Assets Measured at Fair Value

The following table summarizes plan investment assets measured at fair value at December 31:

	Qualified Pension Plan																Postretirement Welfare Plan
	2019								2018								2019		2018
(Dollars in Millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total		Level 1		Level 1
Cash and cash equivalents	$	58	$	–	$	–	$	58	$	54	$	–	$	–	$	54	$	40	$	42
Debt securities		727		1,073		–		1,800		631		904		–		1,535		–		–
Corporate stock
Real estate equity securities(a)		–		–		–		–		109		–		–		109		–		–
Mutual funds
Debt securities		–		304		–		304		–		295		–		295		–		–
Emerging markets equity securities		–		136		–		136		–		113		–		113		–		–
Other		–		–		3		3		–		–		3		3		–		–
	$	785	$	1,513	$	3		2,301	$	794	$	1,312	$	3		2,109		40		42
Plan investment assets not classified in fair value hierarchy(b):
Collective investment funds
Domestic equity securities								1,328								1,183		27		24
Mid-small cap equity securities(c)								323								340		–		–
International equity securities								752								643		17		15
Real estate securities								547								146		–		–
Hedge funds(d)								283								290		–		–
Private equity funds(e)								304								225		–		–
Total plan investment assets at fair value							$	5,838							$	4,936	$	84	$	81

(a) At December 31, 2018, securities included $56 million in domestic equities and $53 million in international equities.

(b) These investments are valued based on net asset value per share as a practical expedient; fair values are provided to reconcile to total investment assets of the plans at fair value.

(c) At December 31, 2019 and 2018, securities included $323 million and $340 million in domestic equities, respectively.

(d) This category consists of several investment strategies diversified across several hedge fund managers.

(e) This category consists of several investment strategies diversified across several private equity fund managers.

Summarizes the Changes for Qualified Pension Plan Assets Measured at Fair Value Using Significant Unobservable Inputs (Level 3)

The following table summarizes the changes in fair value for qualified pension plan investment assets measured at fair value using significant unobservable inputs (Level 3) for the years ended December 31:

	2019		2018		2017
(Dollars in Millions)	Other		Other		Other
Balance at beginning of period	$	3	$	2	$	1
Unrealized gains (losses) relating to assets still held at end of year		–		–		–
Purchases, sales, and settlements, net		–		1		1
Balance at end of period	$	3	$	3	$	2

Expected Future Benefit Payments

The following benefit payments are expected to be paid from the retirement plans for the years ended December 31:

(Dollars in Millions)	Pension Plans		Postretirement Welfare Plan(a)		Medicare Part D Subsidy Receipts
2020	$	233	$	7	$	1
2021		254		6		1
2022		267		6		1
2023		294		6		1
2024		306		5		1
2025-2029		1,811		19		2

(a) Net of expected retiree contributions and before Medicare Part D subsidy.

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Derivative Instruments - Summary of Effective Portion of Gains (Losses) Recognized in Other Comprehensive Income (Loss) and Gains (Losses) Reclassified from Other Comprehensive Income (Loss) into Earnings (Detail) - Asset and Liability Management Positions [Member] - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash Flow Hedges [Member] | Interest Rate Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Losses) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	$ (171)	$ 29	$ (3)
Derivative Instruments, Gains (Losses) Reclassified from Other Comprehensive Income (Loss) into Earnings	(8)	3	(19)
Net Investment Hedges [Member] | Foreign Exchange Forward Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Losses) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	3	39	(56)
Net Investment Hedges [Member] | Non Derivative Debt Instruments [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Losses) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	$ 13	$ 32	$ (46)

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Short-Term Borrowings (Tables)

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Summary of Short-Term Borrowings

The following table is a summary of short-term borrowings for the last three years:

	2019					2018					2017
(Dollars in Millions)	Amount		Rate			Amount		Rate			Amount		Rate
At year-end
Federal funds purchased	$	828		1.45	%	$	458		2.05	%	$	252		.77	%
Securities sold under agreements to repurchase		1,165		1.41			2,582		2.20			803		.61
Commercial paper		7,576		1.07			6,940		1.35			8,303		.68
Other short-term borrowings		14,154		1.94			4,159		2.68			7,293		2.13
Total	$	23,723		1.62	%	$	14,139		1.92	%	$	16,651		1.31	%
Average for the year
Federal funds purchased	$	1,457		1.94	%	$	1,070		1.70	%	$	528		.86	%
Securities sold under agreements to repurchase		1,770		2.00			2,279		1.87			917		.44
Commercial paper		8,186		1.45			6,929		.94			8,236		.49
Other short-term borrowings		6,724		2.78			11,512		2.27			5,341		1.90
Total	$	18,137		2.04	%	$	21,790		1.78	%	$	15,022		1.00	%
Maximum month-end balance
Federal funds purchased	$	3,629				$	4,532				$	600
Securities sold under agreements to repurchase		2,755					3,225					927
Commercial paper		9,431					7,846					9,950
Other short-term borrowings		14,154					16,588					7,293

(a) Interest and rates are presented on a fully taxable-equivalent basis utilizing a tax rate of 21 percent for 2019 and 2018 and 35 percent for 2017.

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Derivative Instruments - Summary of Gains (Losses) Recognized in Earnings for Other Economic Hedges and Customer-Related Positions (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Customer-Related Positions [Member] | Interest Rate Contracts [Member] | Commercial Products Revenue [Member] | Options [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings	$ 10	$ 2	$ (24)
Customer-Related Positions [Member] | Interest Rate Contracts [Member] | Commercial Products Revenue [Member] | Futures [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings	(5)	9	(3)
Customer-Related Positions [Member] | Swaps [Member] | Commercial Products Revenue [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings	82	47	67
Customer-Related Positions [Member] | Credit Contracts [Member] | Commercial Products Revenue [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings	(18)	2	3
Customer-Related Positions [Member] | Foreign Exchange Rate Contracts [Member] | Commercial Products Revenue [Member] | Options [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings	1		2
Customer-Related Positions [Member] | Foreign Exchange Rate Contracts [Member] | Commercial Products Revenue [Member] | Forwards, Spots and Swaps [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings	82	84	92
Asset and Liability Management Positions [Member] | Other Economic Hedges [Member] | Interest Rate Contracts [Member] | Mortgage Banking Revenue [Member] | Futures and Forwards [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings	34	110	24
Asset and Liability Management Positions [Member] | Other Economic Hedges [Member] | Interest Rate Contracts [Member] | Mortgage Banking Revenue [Member] | Options [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings	432	188	237
Asset and Liability Management Positions [Member] | Other Economic Hedges [Member] | Swaps [Member] | Mortgage Banking Revenue [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings	316	(111)	35
Asset and Liability Management Positions [Member] | Other Economic Hedges [Member] | Foreign Exchange Forward Contracts [Member] | Other Noninterest Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings	(24)	39	(69)
Asset and Liability Management Positions [Member] | Other Economic Hedges [Member] | Equity Contracts [Member] | Compensation Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings		(4)	1
Asset and Liability Management Positions [Member] | Other Economic Hedges [Member] | Other Derivatives [Member] | Other Noninterest Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings	$ (140)	$ 2	$ (1)

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Mortgage Servicing Rights - MSRs and Related Characteristics by Portfolio (Detail) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($) BasisPoint Multiple	Dec. 31, 2018 USD ($) Multiple BasisPoint	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Servicing Assets at Fair Value [Line Items]
Fair value	$ 2,546	$ 2,791	$ 2,645	$ 2,591
Mortgage Servicing Rights [Member]
Servicing Assets at Fair Value [Line Items]
Servicing portfolio	223,518	229,284
Fair value	$ 2,546	$ 2,791
Value (bps) | BasisPoint	114	122
Weighted-average servicing fees (bps) | BasisPoint	31	30
Multiple (value/servicing fees) | Multiple	3.67	4.11
Weighted-average note rate	4.17%	4.15%
Weighted-average age (in years)	4 years 7 months 6 days	4 years 3 months 18 days
Weighted-average expected prepayment (constant prepayment rate)	12.40%	9.50%
Weighted-average expected life (in years)	6 years	7 years 2 months 12 days
Weighted-average option adjusted spread	7.30%	7.60%
HFA [Member] | Mortgage Servicing Rights [Member]
Servicing Assets at Fair Value [Line Items]
Servicing portfolio	$ 44,906	$ 44,384
Fair value	$ 486	$ 526
Value (bps) | BasisPoint	108	119
Weighted-average servicing fees (bps) | BasisPoint	34	34
Multiple (value/servicing fees) | Multiple	3.15	3.45
Weighted-average note rate	4.65%	4.59%
Weighted-average age (in years)	3 years 8 months 12 days	3 years 3 months 18 days
Weighted-average expected prepayment (constant prepayment rate)	12.20%	9.80%
Weighted-average expected life (in years)	6 years 6 months	7 years 8 months 12 days
Weighted-average option adjusted spread	8.40%	8.60%
Government Insured [Member] | Mortgage Servicing Rights [Member]
Servicing Assets at Fair Value [Line Items]
Servicing portfolio	$ 35,302	$ 35,990
Fair value	$ 451	$ 465
Value (bps) | BasisPoint	128	129
Weighted-average servicing fees (bps) | BasisPoint	39	36
Multiple (value/servicing fees) | Multiple	3.29	3.63
Weighted-average note rate	3.99%	3.97%
Weighted-average age (in years)	4 years 10 months 24 days	4 years 8 months 12 days
Weighted-average expected prepayment (constant prepayment rate)	13.70%	11.00%
Weighted-average expected life (in years)	5 years 8 months 12 days	6 years 8 months 12 days
Weighted-average option adjusted spread	7.90%	8.30%
Conventional [Member] | Mortgage Servicing Rights [Member]
Servicing Assets at Fair Value [Line Items]
Servicing portfolio	$ 143,310	$ 148,910
Fair value	$ 1,609	$ 1,800
Value (bps) | BasisPoint	112	121
Weighted-average servicing fees (bps) | BasisPoint	28	27
Multiple (value/servicing fees) | Multiple	4.00	4.52
Weighted-average note rate	4.07%	4.06%
Weighted-average age (in years)	4 years 9 months 18 days	4 years 6 months
Weighted-average expected prepayment (constant prepayment rate)	12.20%	9.10%
Weighted-average expected life (in years)	5 years 10 months 24 days	7 years 1 month 6 days
Weighted-average option adjusted spread	6.90%	7.20%

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Investment Securities - Amount of Gross Gains and Losses Realized through Sales of Available-for-Sale Investment Securities (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Debt Securities, Available-for-sale, Realized Gain (Loss), Excluding Other-than-temporary Impairment [Abstract]
Realized gains	$ 99	$ 30	$ 75
Realized losses	(26)		(18)
Net realized gains (losses)	73	30	57
Income tax (benefit) on net realized gains (losses)	$ 18	$ 7	$ 22

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Guarantees and Contingent Liabilities - Contract or Notional Amounts of Unfunded Commitments to Extend Credit (Detail) $ in Millions	Dec. 31, 2019 USD ($)
Commercial and Commercial Real Estate Loans [Member]
Other Commitments [Line Items]
Contract or notional amounts of unfunded commitments to extend credit	$ 139,538
Corporate and Purchasing Card Loans [Member]
Other Commitments [Line Items]
Contract or notional amounts of unfunded commitments to extend credit	29,296
Residential Mortgages [Member]
Other Commitments [Line Items]
Contract or notional amounts of unfunded commitments to extend credit	417
Credit Card [Member]
Other Commitments [Line Items]
Contract or notional amounts of unfunded commitments to extend credit	111,773
Other Retail Loans [Member]
Other Commitments [Line Items]
Contract or notional amounts of unfunded commitments to extend credit	36,797
Other [Member]
Other Commitments [Line Items]
Contract or notional amounts of unfunded commitments to extend credit	6,325
Less Than One Year [Member] | Commercial and Commercial Real Estate Loans [Member]
Other Commitments [Line Items]
Contract or notional amounts of unfunded commitments to extend credit	31,235
Less Than One Year [Member] | Corporate and Purchasing Card Loans [Member]
Other Commitments [Line Items]
Contract or notional amounts of unfunded commitments to extend credit	29,296
Less Than One Year [Member] | Residential Mortgages [Member]
Other Commitments [Line Items]
Contract or notional amounts of unfunded commitments to extend credit	416
Less Than One Year [Member] | Credit Card [Member]
Other Commitments [Line Items]
Contract or notional amounts of unfunded commitments to extend credit	111,773
Less Than One Year [Member] | Other Retail Loans [Member]
Other Commitments [Line Items]
Contract or notional amounts of unfunded commitments to extend credit	12,614
Less Than One Year [Member] | Other [Member]
Other Commitments [Line Items]
Contract or notional amounts of unfunded commitments to extend credit	6,325
Greater Than One Year [Member] | Commercial and Commercial Real Estate Loans [Member]
Other Commitments [Line Items]
Contract or notional amounts of unfunded commitments to extend credit	108,303
Greater Than One Year [Member] | Residential Mortgages [Member]
Other Commitments [Line Items]
Contract or notional amounts of unfunded commitments to extend credit	1
Greater Than One Year [Member] | Other Retail Loans [Member]
Other Commitments [Line Items]
Contract or notional amounts of unfunded commitments to extend credit	$ 24,183

XML

Investment Securities - Amortized Cost, Fair Value and Yield by Maturity Date (Parenthetical) (Detail)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Contractual Maturities of Investment Securities [Abstract]
Federal statutory rate	21.00%	21.00%	35.00%
Available for sale and held to maturity securities weighted average maturities		5 years 3 months 18 days
Debt securities available for sale and held to maturity weighted average yield		2.52%

XML

Fair Values of Assets and Liabilities - Losses Recognized Related to Nonrecurring Fair Value Measurements of Individual Assets or Portfolios (Detail) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Loans Receivable [Member]
Fair Value Assets Measured On Nonrecurring Basis Losses Recognized [Line Items]
Losses recognized related to nonrecurring fair value measurements	$ 122	$ 83	$ 171
Other Assets [Member]
Fair Value Assets Measured On Nonrecurring Basis Losses Recognized [Line Items]
Losses recognized related to nonrecurring fair value measurements	$ 17	$ 26	$ 20

XML

Intangible Assets - Changes in Carrying Value of Goodwill (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Goodwill [Line Items]
Goodwill, Beginning Balance	$ 9,369	$ 9,434	$ 9,344
Goodwill acquired	285	105	62
Disposal		(155)
Foreign exchange translation and other	1	(15)	28
Goodwill, Ending Balance	9,655	9,369	9,434
Corporate and Commercial Banking [Member]
Goodwill [Line Items]
Goodwill, Beginning Balance	1,647	1,647	1,647
Goodwill, Ending Balance	1,647	1,647	1,647
Consumer and Business Banking [Member]
Goodwill [Line Items]
Goodwill, Beginning Balance	3,475	3,681	3,681
Disposal		(155)
Foreign exchange translation and other		(51)
Goodwill, Ending Balance	3,475	3,475	3,681
Wealth Management and Investment Services [Member]
Goodwill [Line Items]
Goodwill, Beginning Balance	1,618	1,569	1,566
Foreign exchange translation and other	(1)	49	3
Goodwill, Ending Balance	1,617	1,618	1,569
Payment Services [Member]
Goodwill [Line Items]
Goodwill, Beginning Balance	2,629	2,537	2,450
Goodwill acquired	285	105	62
Foreign exchange translation and other	2	(13)	25
Goodwill, Ending Balance	$ 2,916	$ 2,629	$ 2,537

XML

Business Segments - Business Segment Results (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Segment Reporting Information [Line Items]
Securities gains (losses), net	$ 73	$ 30	$ 57
Other intangibles	168	161	175
Total noninterest expense	12,785	12,464	12,790
Provision for credit losses	1,504	1,379	1,390
Net income	6,946	7,124	6,253
Net (income) loss attributable to noncontrolling interests	32	28	35
Net income attributable to U.S. Bancorp	6,914	7,096	$ 6,218
Corporate and Commercial Banking [Member]
Segment Reporting Information [Line Items]
Net interest income (taxable-equivalent basis)	2,871	2,936
Noninterest income	867	843
Total net revenue	3,738	3,779
Noninterest expense	1,607	1,591
Other intangibles	4	4
Total noninterest expense	1,611	1,595
Income before provision and income taxes	2,127	2,184
Provision for credit losses	78	65
Income before income taxes	2,049	2,119
Income taxes and taxable-equivalent adjustment	513	531
Net income	1,536	1,588
Net income attributable to U.S. Bancorp	1,536	1,588
Loans	96,608	93,854
Other earning assets	3,751	3,072
Goodwill	1,647	1,647
Other intangible assets	8	11
Assets	106,716	102,801
Noninterest-bearing deposits	29,152	32,938
Interest-bearing Deposits	72,780	69,913
Total deposits	101,932	102,851
Total U.S. Bancorp shareholders' equity	10,399	10,463
Consumer and Business Banking [Member]
Segment Reporting Information [Line Items]
Net interest income (taxable-equivalent basis)	6,261	6,156
Noninterest income	2,387	2,316
Total net revenue	8,648	8,472
Noninterest expense	5,285	5,232
Other intangibles	20	27
Total noninterest expense	5,305	5,259
Income before provision and income taxes	3,343	3,213
Provision for credit losses	310	232
Income before income taxes	3,033	2,981
Income taxes and taxable-equivalent adjustment	759	745
Net income	2,274	2,236
Net income attributable to U.S. Bancorp	2,274	2,236
Loans	144,595	140,875
Other earning assets	3,989	3,501
Goodwill	3,475	3,604
Other intangible assets	2,617	2,953
Assets	158,884	155,267
Noninterest-bearing deposits	27,876	27,691
Interest-bearing Deposits	129,289	124,934
Total deposits	157,165	152,625
Total U.S. Bancorp shareholders' equity	11,713	11,812
Wealth Management and Investment Services [Member]
Segment Reporting Information [Line Items]
Net interest income (taxable-equivalent basis)	1,157	1,131
Noninterest income	1,799	1,748
Total net revenue	2,956	2,879
Noninterest expense	1,752	1,778
Other intangibles	13	16
Total noninterest expense	1,765	1,794
Income before provision and income taxes	1,191	1,085
Provision for credit losses	(3)	(2)
Income before income taxes	1,194	1,087
Income taxes and taxable-equivalent adjustment	299	273
Net income	895	814
Net income attributable to U.S. Bancorp	895	814
Loans	10,080	9,364
Other earning assets	282	184
Goodwill	1,617	1,618
Other intangible assets	49	63
Assets	13,330	12,437
Noninterest-bearing deposits	13,195	14,006
Interest-bearing Deposits	62,031	56,000
Total deposits	75,226	70,006
Total U.S. Bancorp shareholders' equity	2,525	2,476
Payments Services [Member]
Segment Reporting Information [Line Items]
Net interest income (taxable-equivalent basis)	2,493	2,443
Noninterest income	3,707	3,599
Total net revenue	6,200	6,042
Noninterest expense	2,940	2,859
Other intangibles	131	114
Total noninterest expense	3,071	2,973
Income before provision and income taxes	3,129	3,069
Provision for credit losses	1,108	1,081
Income before income taxes	2,021	1,988
Income taxes and taxable-equivalent adjustment	505	497
Net income	1,516	1,491
Net income attributable to U.S. Bancorp	1,516	1,491
Loans	33,566	31,102
Other earning assets	348	291
Goodwill	2,839	2,570
Other intangible assets	538	406
Assets	39,743	36,912
Noninterest-bearing deposits	1,205	1,099
Interest-bearing Deposits	115	110
Total deposits	1,320	1,209
Total U.S. Bancorp shareholders' equity	7,084	6,629
Treasury and Corporate Support [Member]
Segment Reporting Information [Line Items]
Net interest income (taxable-equivalent basis)	373	369
Noninterest income	998	1,066
Securities gains (losses), net	73	30
Total net revenue	1,444	1,465
Noninterest expense	1,033	843
Total noninterest expense	1,033	843
Income before provision and income taxes	411	622
Provision for credit losses	11	3
Income before income taxes	400	619
Income taxes and taxable-equivalent adjustment	(325)	(376)
Net income	725	995
Net (income) loss attributable to noncontrolling interests	(32)	(28)
Net income attributable to U.S. Bancorp	693	967
Loans	5,837	5,506
Other earning assets	131,481	127,318
Assets	156,980	149,597
Noninterest-bearing deposits	2,435	2,462
Interest-bearing Deposits	8,734	4,309
Total deposits	11,169	6,771
Total U.S. Bancorp shareholders' equity	20,902	18,383
Consolidated Company [Member]
Segment Reporting Information [Line Items]
Net interest income (taxable-equivalent basis)	13,155	13,035
Noninterest income	9,758	9,572
Securities gains (losses), net	73	30
Total net revenue	22,986	22,637
Noninterest expense	12,617	12,303
Other intangibles	168	161
Total noninterest expense	12,785	12,464
Income before provision and income taxes	10,201	10,173
Provision for credit losses	1,504	1,379
Income before income taxes	8,697	8,794
Income taxes and taxable-equivalent adjustment	1,751	1,670
Net income	6,946	7,124
Net (income) loss attributable to noncontrolling interests	(32)	(28)
Net income attributable to U.S. Bancorp	6,914	7,096
Loans	290,686	280,701
Other earning assets	139,851	134,366
Goodwill	9,578	9,439
Other intangible assets	3,212	3,433
Assets	475,653	457,014
Noninterest-bearing deposits	73,863	78,196
Interest-bearing Deposits	272,949	255,266
Total deposits	346,812	333,462
Total U.S. Bancorp shareholders' equity	$ 52,623	$ 49,763

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Short-Term Borrowings - Summary of Short-Term Borrowings (Parenthetical) (Detail)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Short-term Debt [Abstract]
Federal statutory rate	21.00%	21.00%	35.00%

XML

Loans and Allowance for Credit Losses - Additional Detail of Allowance for Credit Losses and Related Loan Balances by Portfolio Class (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Allowance Balance at End of Period
Loans individually evaluated for impairment	$ 19	$ 24
TDRs collectively evaluated for impairment	223	225
Other loans collectively evaluated for impairment	4,234	4,176
Loans acquired with deteriorated credit quality	15	16
Total allowance for credit losses	4,491	4,441	$ 4,417	$ 4,357
Loan Balance at End of Period
Loans individually evaluated for impairment	314	348
TDRs collectively evaluated for impairment	3,793	3,960
Other loans collectively evaluated for impairment	291,734	282,158
Loans acquired with deteriorated credit quality	261	344
Total loans	296,102	286,810
Commercial [Member]
Allowance Balance at End of Period
Loans individually evaluated for impairment	16	16
TDRs collectively evaluated for impairment	20	15
Other loans collectively evaluated for impairment	1,448	1,423
Total allowance for credit losses	1,484	1,454	1,372	1,450
Loan Balance at End of Period
Loans individually evaluated for impairment	253	262
TDRs collectively evaluated for impairment	163	151
Other loans collectively evaluated for impairment	103,447	102,031
Total loans	103,863	102,444
Commercial Real Estate [Member]
Allowance Balance at End of Period
Loans individually evaluated for impairment	3	8
TDRs collectively evaluated for impairment	3	3
Other loans collectively evaluated for impairment	793	788
Loans acquired with deteriorated credit quality		1
Total allowance for credit losses	799	800	831	812
Loan Balance at End of Period
Loans individually evaluated for impairment	61	86
TDRs collectively evaluated for impairment	138	129
Other loans collectively evaluated for impairment	39,513	39,297
Loans acquired with deteriorated credit quality	34	27
Total loans	39,746	39,539
Residential Mortgages [Member]
Allowance Balance at End of Period
TDRs collectively evaluated for impairment	109	126
Other loans collectively evaluated for impairment	309	314
Loans acquired with deteriorated credit quality	15	15
Total allowance for credit losses	433	455	449	510
Loan Balance at End of Period
TDRs collectively evaluated for impairment	3,044	3,252
Other loans collectively evaluated for impairment	67,315	61,465
Loans acquired with deteriorated credit quality	227	317
Total loans	70,586	65,034
Other Retail [Member]
Allowance Balance at End of Period
TDRs collectively evaluated for impairment	10	12
Other loans collectively evaluated for impairment	637	618
Total allowance for credit losses	647	630	678	617
Loan Balance at End of Period
TDRs collectively evaluated for impairment	185	183
Other loans collectively evaluated for impairment	56,933	56,247
Total loans	57,118	56,430
Credit Card [Member]
Allowance Balance at End of Period
TDRs collectively evaluated for impairment	81	69
Other loans collectively evaluated for impairment	1,047	1,033
Total allowance for credit losses	1,128	1,102	$ 1,056	$ 934
Loan Balance at End of Period
TDRs collectively evaluated for impairment	263	245
Other loans collectively evaluated for impairment	24,526	23,118
Total loans	$ 24,789	$ 23,363

XML

Consolidated Statement of Income - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Interest Income
Loans	$ 14,099	$ 13,120	$ 11,788
Loans held for sale	162	165	144
Investment securities	2,893	2,616	2,232
Other interest income	340	272	182
Total interest income	17,494	16,173	14,346
Interest Expense
Deposits	2,855	1,869	1,041
Short-term borrowings	360	378	141
Long-term debt	1,227	1,007	784
Total interest expense	4,442	3,254	1,966
Net interest income	13,052	12,919	12,380
Provision for credit losses	1,504	1,379	1,390
Net interest income after provision for credit losses	11,548	11,540	10,990
Noninterest Income
Credit and debit card revenue	1,413	1,401	1,289
Corporate payment products revenue	664	644	575
Merchant processing services	1,601	1,531	1,486
Trust and investment management fees	1,673	1,619	1,522
Deposit service charges	909	1,070	1,035
Treasury management fees	578	594	618
Commercial products revenue	934	895	954
Mortgage banking revenue	874	720	834
Investment products fees	186	188	173
Realized securities gains (losses), net	73	30	57
Other	926	910	774
Total noninterest income	9,831	9,602	9,317
Noninterest Expense
Compensation	6,325	6,162	5,746
Employee benefits	1,286	1,231	1,134
Net occupancy and equipment	1,123	1,063	1,019
Professional services	454	407	419
Marketing and business development	426	429	542
Technology and communications	1,095	978	903
Postage, printing and supplies	290	324	323
Other intangibles	168	161	175
Other	1,618	1,709	2,529
Total noninterest expense	12,785	12,464	12,790
Income before income taxes	8,594	8,678	7,517
Applicable income taxes	1,648	1,554	1,264
Net income	6,946	7,124	6,253
Net (income) loss attributable to noncontrolling interests	(32)	(28)	(35)
Net income attributable to U.S. Bancorp	6,914	7,096	6,218
Net income applicable to U.S. Bancorp common shareholders	$ 6,583	$ 6,784	$ 5,913
Earnings per common share	$ 4.16	$ 4.15	$ 3.53
Diluted earnings per common share	$ 4.16	$ 4.14	$ 3.51
Average common shares outstanding	1,581	1,634	1,677
Average diluted common shares outstanding	1,583	1,638	1,683

XML

Consolidated Statement of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Operating Activities
Net income attributable to U.S. Bancorp	$ 6,914	$ 7,096	$ 6,218
Adjustments to reconcile net income to net cash provided by operating activities
Provision for credit losses	1,504	1,379	1,390
Depreciation and amortization of premises and equipment	334	306	293
Amortization of intangibles	168	161	175
(Gain) loss on sale of loans held for sale	(762)	(394)	(772)
(Gain) loss on sale of securities and other assets	(469)	(510)	(502)
Loans originated for sale in the secondary market, net of repayments	(36,561)	(29,214)	(35,743)
Proceeds from sales of loans held for sale	33,303	30,730	37,462
Other, net	458	1,010	(2,049)
Net cash provided by operating activities	4,889	10,564	6,472
Investing Activities
Proceeds from sales of available-for-sale investment securities	11,252	1,400	3,084
Proceeds from maturities of held-to-maturity investment securities	9,137	6,619	8,306
Proceeds from maturities of available-for-sale investment securities	11,454	11,411	13,042
Purchases of held-to-maturity investment securities	(6,701)	(9,793)	(9,712)
Purchases of available-for-sale investment securities	(33,814)	(10,077)	(17,860)
Net increase in loans outstanding	(9,871)	(9,234)	(8,054)
Proceeds from sales of loans	2,899	4,862	2,458
Purchases of loans	(3,805)	(3,694)	(3,040)
Net increase (decrease) in securities purchased under agreements to resell	(816)	(182)	54
Other, net	(1,295)	(289)	(404)
Net cash used in investing activities	(21,560)	(8,977)	(12,126)
Financing Activities
Net increase (decrease) in deposits	16,441	(1,740)	12,625
Net increase (decrease) in short-term borrowings	9,584	(2,512)	2,688
Proceeds from issuance of long-term debt	9,899	12,078	9,434
Principal payments or redemption of long-term debt	(11,119)	(2,928)	(10,517)
Proceeds from issuance of preferred stock		565	993
Proceeds from issuance of common stock	88	86	159
Repurchase of preferred stock			(1,085)
Repurchase of common stock	(4,525)	(2,822)	(2,631)
Cash dividends paid on preferred stock	(302)	(274)	(284)
Cash dividends paid on common stock	(2,443)	(2,092)	(1,928)
Net cash used in financing activities	17,623	361	9,454
Change in cash and due from banks	952	1,948	3,800
Cash and due from banks at beginning of period	21,453	19,505	15,705
Cash and due from banks at end of period	22,405	21,453	19,505
Supplemental Cash Flow Disclosures
Cash paid for income taxes	941	365	555
Cash paid for interest	4,404	3,056	2,086
Noncash transfer of held-to-maturity investment securities to available-for-sale	43,596
Net noncash transfers to foreclosed property	$ 60	$ 115	$ 163

XML

Fair Values of Assets and Liabilities - Balances of Assets and Liabilities Measured at Fair Value on Recurring Basis (Parenthetical) (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Fair Value Disclosures [Abstract]
Equity investments without readily determinable fair values	$ 91	$ 86

XML

Fair Values of Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Valuation Assumption Ranges for MSRs

The following table shows the significant valuation assumption ranges for MSRs at December 31, 2019:

	Minimum			Maximum			Weighted Average(a)
Expected prepayment		9	%		22	%		12	%
Option adjusted spread		6			10			7

(a) Determined based on the relative fair value of the related mortgage loans serviced.

Valuation Assumption Ranges for Derivative Commitments

The following table shows the significant valuation assumption ranges for the Company’s derivative commitments to purchase and originate mortgage loans at December 31, 2019:

	Minimum			Maximum			Weighted Average(a)
Expected loan close rate		12	%		100	%		78	%
Inherent MSR value (basis points per loan)		56			221			130

(a) Determined based on the relative fair value of the related mortgage loans.

Balances of Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes the balances of assets and liabilities measured at fair value on a recurring basis:

(Dollars in Millions)	Level 1		Level 2		Level 3		Netting			Total
December 31, 2019
Available-for-sale securities
U.S. Treasury and agencies	$	18,986	$	853	$	–	$	–		$	19,839
Mortgage-backed securities
Residential agency		–		94,111		–		–			94,111
Commercial agency		–		1,453		–		–			1,453
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations		–		–		1		–			1
Other		–		375		7		–			382
Obligations of state and political subdivisions		–		6,813		1		–			6,814
Obligations of foreign governments		–		9		–		–			9
Corporate debt securities		–		4		–		–			4
Total available-for-sale		18,986		103,618		9		–			122,613
Mortgage loans held for sale		–		5,533		–		–			5,533
Mortgage servicing rights		–		–		2,546		–			2,546
Derivative assets		9		1,707		1,181		(982	)		1,915
Other assets		312		1,563		–		–			1,875
Total	$	19,307	$	112,421	$	3,736	$	(982	)	$	134,482
Derivative liabilities	$	–	$	1,612	$	371	$	(1,067	)	$	916
Short-term borrowings and other liabilities(a)		50		1,578		–		–			1,628
Total	$	50	$	3,190	$	371	$	(1,067	)	$	2,544
December 31, 2018
Available-for-sale securities
U.S. Treasury and agencies	$	18,585	$	672	$	–	$	–		$	19,257
Mortgage-backed securities
Residential agency		–		39,752		–		–			39,752
Commercial agency		–		2		–		–			2
Other asset-backed securities		–		403		–		–			403
Obligations of state and political subdivisions		–		6,701		–		–			6,701
Total available-for-sale		18,585		47,530		–		–			66,115
Mortgage loans held for sale		–		2,035		–		–			2,035
Mortgage servicing rights		–		–		2,791		–			2,791
Derivative assets		–		1,427		583		(942	)		1,068
Other assets		392		1,273		–		–			1,665
Total	$	18,977	$	52,265	$	3,374	$	(942	)	$	73,674
Derivative liabilities	$	1	$	1,291	$	503	$	(946	)	$	849
Short-term borrowings and other liabilities(a)		199		1,019		–		–			1,218
Total	$	200	$	2,310	$	503	$	(946	)	$	2,067

Note: Excluded from the table above are equity investments without readily determinable fair values. The Company has elected to carry these investments at historical cost, adjusted for impairment and any changes resulting from observable price changes for identical or similar investments of the issuer. The aggregate carrying amount of these equity investments was $91 million and $86 million at December 31, 2019 and 2018, respectively. The Company has not recorded impairments or adjustments for observable price changes on these equity investments during 2019 or on a cumulative basis.

(a) Primarily represents the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.

Changes in Fair Value for All Assets and Liabilities Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)

The following table presents the changes in fair value for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31:

(Dollars in Millions)	Beginning of Period Balance		Net Gains (Losses) Included in Net Income			Net Gains (Losses) Included in Other Comprehensive Income (Loss)			Purchases		Sales			Principal Payments			Issuances			Settlements			Transfers into Level 3		End of Period Balance		Net Change in Unrealized Gains (Losses) Relating to Assets and Liabilities Held at End of Period
2019
Available-for-sale securities
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations	$	–	$	–		$	–		$	–	$	–		$	–		$	–		$	–		$	1	$	1	$	–
Other		–		–			–			–		–			–			–			–			7		7		–
Obligations of state and political subdivisions		–		–			–			–		–			–			–			–			1		1		–
Total available-for-sale		–		–			–			–		–			–			–			–			9		9		–
Mortgage servicing rights		2,791		(829	)(c)		–			20		5			–			559	(e)		–			–		2,546		(829	)(c)
Net derivative assets and liabilities		80		769	(d)		–			142		(9	)		–			–			(172	)		–		810		782	(f)
2018
Mortgage servicing rights	$	2,645	$	(232	)(c)	$	–		$	8	$	(27	)	$	–		$	397	(e)	$	–		$	–	$	2,791	$	(232	)(c)
Net derivative assets and liabilities		107		21	(g)		–			13		(41	)		–			–			(20	)		–		80		34	(h)
2017
Available-for-sale securities
Residential non-agency mortgage-backed securities
Prime(a)	$	242	$	–		$	(2	)	$	–	$	(234	)	$	(6	)	$	–		$	–		$	–	$	–	$	–
Non-prime(b)		195		–			(17	)		–		(175	)		(3	)		–			–			–		–		–
Other asset-backed securities		2		–			–			–		(2	)		–			–			–			–		–		–
Corporate debt securities		9		–			2			–		(11	)		–			–			–			–		–		–
Total available-for-sale		448		–			(17	)(i)		–		(422	)		(9	)		–			–			–		–		–
Mortgage servicing rights		2,591		(404	)(c)		–			13		–			–			445	(e)		–			–		2,645		(404	)(c)
Net derivative assets and liabilities		171		317	(j)		–			1		(10	)		–			–			(372	)		–		107		(52	)(k)

(a) Prime securities are those designated as such by the issuer at origination. When an issuer designation is unavailable, the Company determines at acquisition date the categorization based on asset pool characteristics (such as weighted-average credit score, loan-to-value, loan type, prevalence of low documentation loans) and deal performance (such as pool delinquencies and security market spreads).

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

(c) Included in mortgage banking revenue.

(d) Approximately $287 million included in other noninterest income and $482 million included in mortgage banking revenue.

(e) Represents MSRs capitalized during the period.

(f) Approximately $747 million included in other noninterest income and $35 million included in mortgage banking revenue.

(g) Approximately $(139) million included in other noninterest income and $160 million included in mortgage banking revenue.

(h) Approximately $14 million included in other noninterest income and $20 million included in mortgage banking revenue.

(i) Included in changes in unrealized gains and losses on investment securities available-for-sale.

(j) Approximately $21 million included in other noninterest income and $296 million included in mortgage banking revenue.

(k) Approximately $(77) million included in other noninterest income and $25 million included in mortgage banking revenue.

Adjusted Carrying Values for Assets Measured at Fair Value on Nonrecurring Basis

The following table summarizes the balances as of the measurement date of assets measured at fair value on a nonrecurring basis, and still held as of December 31:

	2019								2018
(Dollars in Millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Loans(a)	$	–	$	–	$	136	$	136	$	–	$	–	$	40	$	40
Other assets(b)		–		–		46		46		–		–		57		57

(a) Represents the carrying value of loans for which adjustments were based on the fair value of the collateral, excluding loans fully charged-off.

(b) Primarily represents the fair value of foreclosed properties that were measured at fair value based on an appraisal or broker price opinion of the collateral subsequent to their initial acquisition.

Losses Recognized Related to Nonrecurring Fair Value Measurements of Individual Assets or Portfolios

The following table summarizes losses recognized related to nonrecurring fair value measurements of individual assets or portfolios for the years ended December 31:

(Dollars in Millions)	2019		2018		2017
Loans(a)	$	122	$	83	$	171
Other assets(b)		17		26		20

(a) Represents write-downs of loans which were based on the fair value of the collateral, excluding loans fully charged-off.

(b) Primarily represents related losses of foreclosed properties that were measured at fair value subsequent to their initial acquisition.

Differences Between Aggregate Fair Value Carrying Amount of MLHFS for which Fair Value Option has been Elected and Aggregate Unpaid Principal Amount Contractually Obligated to Receive at Maturity

The following table summarizes the differences between the aggregate fair value carrying amount of MLHFS for which the fair value option has been elected and the aggregate unpaid principal amount that the Company is contractually obligated to receive at maturity as of December 31:

	2019						2018
(Dollars in Millions)	Fair Value Carrying Amount		Aggregate Unpaid Principal		Carrying Amount Over (Under) Unpaid Principal		Fair Value Carrying Amount		Aggregate Unpaid Principal		Carrying Amount Over (Under) Unpaid Principal
Total loans	$	5,533	$	5,366	$	167	$	2,035	$	1,972	$	63
Nonaccrual loans		1		1		–		2		2		–
Loans 90 days or more past due		1		1		–		–		–		–

Estimated Fair Values of Financial Instruments

The estimated fair values of the Company’s financial instruments as of December 31, are shown in the table below:

	2019										2018
	Carrying Amount		Fair Value								Carrying Amount		Fair Value
(Dollars in Millions)			Level 1		Level 2		Level 3		Total				Level 1		Level 2		Level 3		Total
Financial Assets
Cash and due from banks	$	22,405	$	22,405	$	–	$	–	$	22,405	$	21,453	$	21,453	$	–	$	–	$	21,453
Federal funds sold and securities purchased under resale agreements		1,036		–		1,036		–		1,036		306		–		306		–		306
Investment securities held-to-maturity		–		–		–		–		–		46,050		4,594		40,359		11		44,964
Loans held for sale(a)		45		–		–		43		43		21		–		–		21		21
Loans		292,082		–		–		297,241		297,241		282,837		–		–		284,790		284,790
Other		1,923		–		929		994		1,923		2,412		–		1,241		1,171		2,412
Financial Liabilities
Time deposits		42,894		–		42,831		–		42,831		44,554		–		44,140		–		44,140
Short-term borrowings(b)		22,095		–		21,461		–		21,461		12,921		–		12,678		–		12,678
Long-term debt		40,167		–		41,077		–		41,077		41,340		–		41,003		–		41,003
Other		3,678		–		1,342		2,336		3,678		1,726		–		–		1,726		1,726

(a) Excludes mortgages held for sale for which the fair value option under applicable accounting guidance was elected.

(b) Excludes the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.

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Fair Values of Assets and Liabilities - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Fair Value Disclosures [Abstract]
Carrying value of unfunded commitments, deferred non-yield related loan fees and standby letters of credit	$ 528	$ 532
Other guarantees carrying value	200	263
Changes to fair value of these MLHFS	$ 73	$ (60)	$ 84
Minimum [Member]
Fair Value Disclosures [Abstract]
Assumed credit valuation adjustment as percentage of derivative contract fair value	0.00%
Maximum [Member]
Fair Value Disclosures [Abstract]
Assumed credit valuation adjustment as percentage of derivative contract fair value	671.00%
Weighted Average [Member]
Fair Value Disclosures [Abstract]
Assumed credit valuation adjustment as percentage of derivative contract fair value	1.00%

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Accounting Changes - Additional Information (Detail) - USD ($) $ in Billions	Jan. 01, 2020	Dec. 31, 2019
Increase in lease assets related to adoption of accounting guidance		$ 1.3
Increase in lease related liabilities related to adoption of accounting guidance		$ 1.3
Accounting Standards Update 2016-13 [Member] | Forecast [Member] | Retained Earnings [Member]
Increase in allowance for credit losses	$ 1.5

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Leases - Components of Net Investment in Sales - Type and Direct Financing Leases (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Net Investment in Leases [Abstract]
Lease receivables	$ 12,324	$ 12,207
Unguaranteed residual values accruing to the lessor's benefit	1,834	1,877
Total net investment in sales-type and direct financing leases	$ 14,158	$ 14,084

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Mortgage Servicing Rights - Sensitivity to Changes in Interest Rates of the Fair Value of MSR Portfolio and Related Derivative Instruments (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Down Scenario [Member] | Mortgage Servicing Rights [Member]
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Net fair value 100 basis points	$ (663)	$ (501)
Net fair value 50 basis points	(316)	(223)
Net fair value 25 basis points	(153)	(105)
Down Scenario [Member] | Derivative [Member]
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Net fair value 100 basis points	613	455
Net fair value 50 basis points	306	215
Net fair value 25 basis points	152	104
Down Scenario [Member] | Net Sensitivity [Member]
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Net fair value 100 basis points	(50)	(46)
Net fair value 50 basis points	(10)	(8)
Net fair value 25 basis points	(1)	(1)
Up Scenario [Member] | Mortgage Servicing Rights [Member]
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Net fair value 100 basis points	485	295
Net fair value 50 basis points	269	171
Net fair value 25 basis points	141	92
Up Scenario [Member] | Derivative [Member]
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Net fair value 100 basis points	(550)	(321)
Net fair value 50 basis points	(279)	(177)
Net fair value 25 basis points	(143)	(94)
Up Scenario [Member] | Net Sensitivity [Member]
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Net fair value 100 basis points	(65)	(26)
Net fair value 50 basis points	(10)	(6)
Net fair value 25 basis points	$ (2)	$ (2)

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Accounting for Transfers and Servicing of Financial Assets and Variable Interest Entities - Summary of Investments in Community Development and Tax-advantaged VIEs (Detail) - Community Development and Tax Advantaged Investments [Member] - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Variable Interest Entity [Line Items]
Investment carrying amount	$ 6,148	$ 5,823
Unfunded capital and other commitments	2,938	2,778
Maximum exposure to loss	$ 12,118	$ 12,360

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U.S. Bancorp (Parent Company) - Additional Information (Detail)	Dec. 31, 2019
Receivables
Loan Limits to the company or individual affiliate	10.00%
Maximum limit of loans to the Company and all affiliates	20.00%

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Loans and Allowance for Credit Losses - Impaired Loans Average Recorded Investment and Interest Income Recognized (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	$ 4,608	$ 4,797	$ 5,316
Interest Income Recognized	194	164	204
Commercial [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	520	497	683
Interest Income Recognized	9	8	7
Commercial Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	248	273	273
Interest Income Recognized	11	13	11
Residential Mortgages [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	1,622	1,817	2,135
Interest Income Recognized	92	76	103
Other Retail [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	323	309	287
Interest Income Recognized	12	16	14
Credit Card [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	257	236	229
Interest Income Recognized		3	3
Covered Loans [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment		25	37
Interest Income Recognized		1	1
Total Loans, Excluding Loans Purchased from GNMA Mortgage Pools [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	2,970	3,157	3,644
Interest Income Recognized	124	117	139
Government National Mortgage Association [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	1,638	1,640	1,672
Interest Income Recognized	$ 70	$ 47	$ 65

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Loans and Allowance for Credit Losses - Summary of Loans by Portfolio Class and Company's Internal Credit Quality Rating (Detail) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 296,102	$ 286,810
Total outstanding commitments	624,548	606,656
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	292,204	282,228
Total outstanding commitments	619,224	600,407
Special Mention Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	1,643	1,740
Total outstanding commitments	2,451	2,801
Classified Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	2,255	2,842
Total outstanding commitments	2,873	3,448
Total Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	3,898	4,582
Total outstanding commitments	5,324	6,249
Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	103,863	102,444
Commercial [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	101,850	100,014
Commercial [Member] | Special Mention Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	1,147	1,149
Commercial [Member] | Classified Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	866	1,281
Commercial [Member] | Total Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	2,013	2,430
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	39,746	39,539
Commercial Real Estate [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	38,872	38,473
Commercial Real Estate [Member] | Special Mention Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	484	584
Commercial Real Estate [Member] | Classified Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	390	482
Commercial Real Estate [Member] | Total Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	874	1,066
Residential Mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	70,586	65,034
Residential Mortgages [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	70,174	64,570
Residential Mortgages [Member] | Special Mention Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	2	1
Residential Mortgages [Member] | Classified Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	410	463
Residential Mortgages [Member] | Total Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	412	464
Other Retail [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	57,118	56,430
Other Retail [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	56,825	56,101
Other Retail [Member] | Special Mention Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	10	6
Other Retail [Member] | Classified Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	283	323
Other Retail [Member] | Total Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	293	329
Credit Card [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	24,789	23,363
Credit Card [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	24,483	23,070
Credit Card [Member] | Classified Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	306	293
Credit Card [Member] | Total Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 306	$ 293

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Leases - Summary of Amounts Relevant to Company's Assets Leased for Use in its Operations (Detail) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$ 302
Operating cash flows from finance leases	7
Financing cash flows from finance leases	10
Right of use assets obtained in exchange for new operating lease liabilities	134
Right of use assets obtained in exchange for new finance lease liabilities	$ 10

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Accounting Changes

12 Months Ended

Dec. 31, 2019

Accounting Changes and Error Corrections [Abstract]

Accounting Changes

  NOTE 2   Accounting Changes

Accounting for Leases Effective January 1, 2019, the Company adopted accounting guidance, issued by the Financial Accounting

Standards Board (“FASB”) in February 2016, related to the accounting for leases. This guidance requires lessees to recognize all leases on the Consolidated Balance Sheet as lease assets and lease liabilities based primarily on the present value of future lease payments. The Company recognized approximately $1.3 billion of lease assets and related liabilities on its Consolidated Balance Sheet at the adoption date. In addition, lessors are now required to consider lease residual exposures of sales-type and direct financing leases when determining the allowance for credit losses. The adoption of this guidance was not material to the Company’s Consolidated Statement of Income.

Financial Instruments—Credit Losses Effective January 1, 2020, the Company adopted accounting guidance, issued by the FASB in June 2016, related to the impairment of financial instruments. This guidance changes impairment recognition to a model that is based on expected losses rather than incurred losses, which is intended to result in more timely recognition of credit losses. This guidance is also intended to reduce the complexity of accounting guidance by decreasing the number of credit impairment models that entities use to account for debt instruments. In addition, the guidance requires additional credit quality disclosures for loans. Upon adoption, the Company increased its allowance for credit losses by approximately $1.5 billion and reduced retained earnings net of deferred tax balances.

When determining expected losses, the Company uses multiple economic scenarios and a three-year reasonable and supportable forecast period, which incorporates historical loss experience in years two and three. After the forecast period, the Company fully reverts to long-term historical loss experience, adjusted for prepayments, to estimate losses over the remaining life.

The increase in the allowance was primarily related to the commercial, credit card, installment and other retail loan portfolios where the allowance for loan losses had not previously considered the full term of the loans.

The adoption of this guidance did not have a material impact on the Company’s available-for-sale securities as most of this portfolio consists of U.S. Treasury and residential agency mortgage-backed securities that inherently have an immaterial risk of loss.

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Employee Benefits - Summary of Changes in Projected Benefit Obligation, Plan Assets, Funded Status, Amounts Recognized in Consolidated Balance Sheet and Accumulated Other Comprehensive Income (Loss) (Parenthetical) (Detail) - USD ($) $ in Billions	Dec. 31, 2019	Dec. 31, 2018
Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Accumulated benefit obligation for all pension plans	$ 6.2	$ 5.0

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Leases

12 Months Ended

Dec. 31, 2019

Text Block [Abstract]

Leases

  NOTE 6   Leases

The Company, as a lessor, originates retail and commercial leases either directly to the consumer or indirectly through dealer networks. Retail leases consist primarily of automobiles, whilecommercial leases may include high dollar assets such as aircraft or lower cost items such as office equipment.

The components of the net investment in sales-type and direct financing leases, at December 31, were as follows:

(Dollars in Millions)	2019		2018
Lease receivables	$	12,324	$	12,207
Unguaranteed residual values accruing to the lessor’s benefit		1,834		1,877
Total net investment in sales-type and direct financing leases	$	14,158	$	14,084

The Company, as a lessor, recorded $996 million of revenue on its Consolidated Statement of Income for the year ended December 31, 2019, primarily consisting of interest income on sales-type and direct financing leases.

The contractual future lease payments to be received by the Company, at December 31, 2019, were as follows:

(Dollars in Millions)	Sales-type and direct financing leases			Operating leases
2020	$	4,755		$	176
2021		3,729			142
2022		2,766			103
2023		1,248			69
2024		382			50
Thereafter		483			52
Total lease payments		13,363		$	592
Amounts representing interest		(1,039	)
Lease receivables	$	12,324

The Company, as lessee, leases certain assets for use in its operations. Leased assets primarily include retail branches, operations centers and other corporate locations, and, to a lesser extent, office and computer equipment. For each lease with an original term greater than 12 months, the Company records a lease liability and a corresponding right of use (“ROU”) asset. At December 31, 2019, the Company’s ROU assets included in premises and equipment and lease liabilities included in long-term

debt and other liabilities, were $1.3 billion and $1.4 billion, respectively.

Total costs incurred by the Company, as a lessee, were $394 million for the year ended December 31, 2019, and principally related to contractual lease payments on operating leases. The Company’s leases do not impose significant covenants or other restrictions on the Company.

The following table presents amounts relevant to the Company’s assets leased for use in its operations for the year ended December 31, 2019:

(Dollars in Millions)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	302
Operating cash flows from finance leases		7
Financing cash flows from finance leases		10
Right of use assets obtained in exchange for new operating lease liabilities		134
Right of use assets obtained in exchange for new finance lease liabilities		10

The following table presents the weighted-average remaining lease terms and discount rates of the Company’s assets leased for use in its operations at December 31, 2019:

Weighted-average remaining lease term of operating leases (in years)	7.4
Weighted-average remaining lease term of finance leases (in years)	10.7
Weighted-average discount rate of operating leases	3.2	%
Weighted-average discount rate of finance leases	14.3	%

The contractual future lease obligations of the Company at December 31, 2019, were as follows:

(Dollars in Millions)	Operating leases			Finance leases
2020	$	296		$	17
2021		267			15
2022		226			13
2023		180			12
2024		132			10
Thereafter		391			38
Total lease payments		1,492			105
Amounts representing interest		(150	)		(31	)
Lease liabilities	$	1,342		$	74

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Earnings Per Share - Components of Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2019		Dec. 31, 2018		Dec. 31, 2017
Earnings Per Share [Abstract]
Net income attributable to U.S. Bancorp	$ 6,914		$ 7,096		$ 6,218
Preferred dividends	(302)	[1]	(282)	[2]	(267)	[3]
Impact of preferred stock redemption					(10)
Earnings allocated to participating stock awards	(29)		(30)		(28)
Net income applicable to U.S. Bancorp common shareholders	$ 6,583		$ 6,784		$ 5,913
Average common shares outstanding	1,581		1,634		1,677
Net effect of the exercise and assumed purchase of stock awards	2		4		6
Average diluted common shares outstanding	1,583		1,638		1,683
Earnings per common share	$ 4.16		$ 4.15		$ 3.53
Diluted earnings per common share	$ 4.16		$ 4.14		$ 3.51

[1] Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series H, Series I, Series J and Series K Non-Cumulative Perpetual Preferred Stock of $3,654.95, $887.15, $1,625.00, $1,287.52, $1,281.25, $1,325.00 and $1,375.00, respectively.

[2] Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series H, Series I, Series J and Series K Non-Cumulative Perpetual Preferred Stock of $3,548.61, $887.15, $1,625.00, $1,287.52, $1,281.25, $1,325.00 and $576.74, respectively.

[3] Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series G, Series H, Series I and Series J Non-Cumulative Perpetual Preferred Stock of $3,548.61, $887.15, $1,625.00, $375.00, $1,287.52, $1,281.25 and $890.69, respectively.

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Employee Benefits - Weighted Average Assumptions to Determine Projected Benefit Obligations (Parenthetical) (Detail)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Projected Benefit Obligation Assumptions [Member] | Prior to age 65 [Member]
Defined Benefit Plan Disclosure [Line Items]
Assumed rate decrease	5.00%	5.00%
Health care cost trend rate to decrease Period	2025	2025
Projected Benefit Obligation Assumptions [Member] | After age 65 [Member]
Defined Benefit Plan Disclosure [Line Items]
Assumed rate decrease	5.00%	5.00%
Health care cost trend rate to decrease Period	2025	2025
Postretirement Welfare Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Assumed plan duration	6 years 1 month 6 days	5 years 10 months 24 days
Qualified Plan [Member] | Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Assumed plan duration	15 years 9 months 18 days	14 years 8 months 12 days
Nonqualified Plan [Member] | Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Assumed plan duration	12 years 3 months 18 days	11 years 6 months

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Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

  NOTE 10   Intangible Assets

Intangible assets consisted of the following:

At December 31 (Dollars in Millions)	Estimated Life(a)	Amortization Method(b)		Balance
				2019		2018
Goodwill			(c)	$	9,655	$	9,369
Merchant processing contracts	6 years/7 years		SL/AC		225		155
Core deposit benefits	22 years/5 years		SL/AC		82		104
Mortgage servicing rights			(c)		2,546		2,791
Trust relationships	10 years/7 years		SL/AC		27		34
Other identified intangibles	6 years/4 years		SL/AC		343		308
Total				$	12,878	$	12,761

(a) Estimated life represents the amortization period for assets subject to the straight line method and the weighted-average or life of the underlying cash flows amortization period for intangibles subject to accelerated methods. If more than one amortization method is used for a category, the estimated life for each method is calculated and reported separately.

(b) Amortization methods:         SL = straight line method

                                                      AC = accelerated methods generally based on cash flows

(c) Goodwill is evaluated for impairment, but not amortized. Mortgage servicing rights are recorded at fair value, and are not amortized.

Aggregate amortization expense consisted of the following:

Year Ended December 31 (Dollars in Millions)	2019		2018		2017
Merchant processing contracts	$	45	$	24	$	24
Core deposit benefits		22		26		30
Trust relationships		10		11		14
Other identified intangibles		91		100		107
Total	$	168	$	161	$	175

The estimated amortization expense for the next five years is as follows:

(Dollars in Millions)
2020	$	155
2021		130
2022		109
2023		76
2024		60

The following table reflects the changes in the carrying value of goodwill for the years ended December 31, 2019, 2018 and 2017: 

(Dollars in Millions)	Corporate and Commercial Banking		Consumer and Business Banking			Wealth Management and Investment Services			Payment Services			Treasury and Corporate Support		Consolidated Company
Balance at December 31, 2016	$	1,647	$	3,681		$	1,566		$	2,450		$	–	$	9,344
Goodwill acquired		–		–			–			62			–		62
Foreign exchange translation and other		–		–			3			25			–		28
Balance at December 31, 2017	$	1,647	$	3,681		$	1,569		$	2,537		$	–	$	9,434
Goodwill acquired		–		–			–			105			–		105
Disposal		–		(155	)		–			–			–		(155	)
Foreign exchange translation and other		–		(51	)		49			(13	)		–		(15	)
Balance at December 31, 2018	$	1,647	$	3,475		$	1,618		$	2,629		$	–	$	9,369
Goodwill acquired		–		–			–			285			–		285
Foreign exchange translation and other		–		–			(1	)		2			–		1
Balance at December 31, 2019	$	1,647	$	3,475		$	1,617		$	2,916		$	–	$	9,655

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Leases (Tables)

12 Months Ended

Dec. 31, 2019

Text Block [Abstract]

Components of Net Investment in Sales-Type and Direct Financing Leases

The components of the net investment in sales-type and direct financing leases, at December 31, were as follows:

(Dollars in Millions)	2019		2018
Lease receivables	$	12,324	$	12,207
Unguaranteed residual values accruing to the lessor’s benefit		1,834		1,877
Total net investment in sales-type and direct financing leases	$	14,158	$	14,084

Contractual Future Lease Payments to be Received

The contractual future lease payments to be received by the Company, at December 31, 2019, were as follows:

(Dollars in Millions)	Sales-type and direct financing leases			Operating leases
2020	$	4,755		$	176
2021		3,729			142
2022		2,766			103
2023		1,248			69
2024		382			50
Thereafter		483			52
Total lease payments		13,363		$	592
Amounts representing interest		(1,039	)
Lease receivables	$	12,324

Summary of Amounts Relevant to Company's Assets Leased for Use in its Operations

The following table presents amounts relevant to the Company’s assets leased for use in its operations for the year ended December 31, 2019:

(Dollars in Millions)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	302
Operating cash flows from finance leases		7
Financing cash flows from finance leases		10
Right of use assets obtained in exchange for new operating lease liabilities		134
Right of use assets obtained in exchange for new finance lease liabilities		10

Summary of Weighted-Average Remaining Lease Terms and Discount Rates

The following table presents the weighted-average remaining lease terms and discount rates of the Company’s assets leased for use in its operations at December 31, 2019:

Weighted-average remaining lease term of operating leases (in years)	7.4
Weighted-average remaining lease term of finance leases (in years)	10.7
Weighted-average discount rate of operating leases	3.2	%
Weighted-average discount rate of finance leases	14.3	%

Schedule of Contractual Future Lease Obligations

The contractual future lease obligations of the Company at December 31, 2019, were as follows:

(Dollars in Millions)	Operating leases			Finance leases
2020	$	296		$	17
2021		267			15
2022		226			13
2023		180			12
2024		132			10
Thereafter		391			38
Total lease payments		1,492			105
Amounts representing interest		(150	)		(31	)
Lease liabilities	$	1,342		$	74

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Income Taxes - Components of Income Tax Expense (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Federal
Current	$ 1,162	$ 1,287	$ 2,086
Deferred	166	(148)	(1,180)
Federal income tax	1,328	1,139	906
State
Current	379	395	201
Deferred	(59)	20	157
State income tax	320	415	358
Applicable income taxes	$ 1,648	$ 1,554	$ 1,264

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Subsequent Events

12 Months Ended

Dec. 31, 2019

Subsequent Events [Abstract]

Subsequent Events

  NOTE 25   Subsequent Events

The Company has evaluated the impact of events that have occurred subsequent to December 31, 2019 through the date the consolidated financial statements were filed with the United States Securities and Exchange Commission. Based on thisevaluation, the Company has determined none of these events were required to be recognized or disclosed in the consolidated financial statements and related notes.

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Income Taxes - Reconciliation of Changes in Federal, State and Foreign Unrecognized Tax Position Balances (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Tax Uncertainties [Abstract]
Balance at beginning of period	$ 335	$ 287	$ 302
Additions for tax positions taken in prior years	168	93	3
Additions for tax positions taken in the current year	6	10	9
Exam resolutions	(62)	(51)	(23)
Statute expirations	(15)	(4)	(4)
Balance at end of period	$ 432	$ 335	$ 287