U.S. BANCORP 2012 Annual Report A Rich Heritage | A Strong Future 1863-2013 A Rich Heritage On July 13, 2013, U.S. Bank will celebrate its 150th anniversary. Our rich history has shaped our present and positioned us for a strong future. Since 1863, our company has expanded through organic We trace our earliest roots to 1853 when Farmers and growth and through numerous acquisitions. We have Millers Bank in Milwaukee opened its doors with $50,000 managed through times of prosperity and times of hardship. in capitalization — eventually becoming First Wisconsin We have focused our efforts externally on growth and and ultimately Firstar. State Savings Institution, with just development and, when necessary, we have focused inter- $8,500 in capital and one $800-a-year teller, opened in nally to right the course. St. Louis in 1855, later to become part of the Mercantile Trust Company founded by Festus J. Wade in 1899 — We are always mindful of the responsibility we hold to help the forerunner of Mercantile Bancorporation. our customers achieve their financial goals; to support and strengthen the communities, and this country, that we serve; and to increase the value of our shareholders’ investment. Rising above the skyline of downtown Minneapolis is This plaque marks the original the former headquarters location of the San Miguel Valley building of First Bank Bank in Colorado, later the Bank System, the name of of Telluride, which subsequently U.S. Bancorp until 1997. became part of the U.S. Bank family. Its merger with Firstar in San Miguel Valley Bank’s claim to 2001 created the “new” Donald Macleay fame (or infamy) is in being the U.S. Bancorp. (August 1834 – July 1897) first bank that Butch Cassidy ever immigrated from Scotland robbed (June 4, 1889). In 1933, banks were reeling. To avoid a panic, the Cincinnati at the age of 16. Later he Clearing House authorized banks to limit withdrawals to five established a wholesale percent of a customer’s account. Only The First National Bank and shipping business in of Cincinnati paid out in full to any customers who asked. Portland. He invested in For decades, the bank and its employees used that tale to Oregon railroads and is indicate First National’s strength and soundness. generally credited with founding the U.S. National Bank of Portland, a predecessor of U.S. Bancorp. In 1929, Mercantile Bancorporation ancestor, Mississippi Valley Trust Company, loaned $15,000 to help finance Charles Lindbergh’s historic transatlantic flight. Mercantile merged with Firstar Corporation in 1999 and later became U.S. Bancorp. The photos above and top left show two views of long-ago stages in the evolution of bank technology. Today U.S. Bancorp processes tens of millions of transactions a month. At left is one of the original ornate lamps that lighted the Colorado National Bank lobby and today is First National Bank of Minneapolis received its charter in on display in the Denver Processing Center. Above, right, are Colorado 1865 — before that it had been a private banking house National Bank stock certificates issued in 1893. Colorado National called Sidel, Wolford & Co. These two First Nationals Bank changed its name to U.S. Bank after the $8.4 billion merger of formed a holding company in early 1929, which then CNB’s Minneapolis parent, First Bank System Inc., with Portland, OR-based became known as First Bank Stock Corporation until it U.S. Bancorp in 1997. took the name First Bank System in 1968. Meanwhile, across the Great Plains and the Rocky The action moves to The First National Bank of Cincinnati, Mountains, The United States National Bank of Portland, which opened for business in 1863 while the Civil War raged in Oregon, was chartered in 1891 by several prominent just across the Ohio River. In 1988, The First National individuals in the local business community. Bank of Cincinnati grew into Star Banc Corporation. These banks thrived as independent entities and were The First National Bank of Cincinnati was established often the largest commercial bank in their respective under National Charter #24, signed by Abraham Lincoln’s marketplaces. Through the years, some benefitted from Comptroller of the Currency, Hugh McCullough. It’s the in-market mergers and acquisitions during the early charter our company still operates under today and is one decades of the 20th century and wider-spread expansions of the oldest active national bank charters in the nation. during the 1980s and 1990s. One such transaction brought Colorado National Bank into the First Bank About this same time, The First National Bank of System family in 1993 and West One Bancorp into St. Paul was chartered in 1864 after doing business for U.S. Bancorp in 1995. some 11 years as Parker Paine & Co. A year later, The Of particular note, in 1902, the U.S. National Bank of Transformational mergers occurred during the 1990s, Portland was merged into the Ainsworth National Bank of as Star, Firstar and Mercantile merged to become the new Portland, but the decision was made to keep the U.S. National Firstar, and First Bank System and U.S. Bancorp combined Bank name. This choice turned out to be auspicious when, under the U.S. Bancorp name. And on February 27, 2001, 11 years later, a federal law prohibited other banks from Firstar and U.S. Bancorp became the new U.S. Bancorp, using United States in their names from that time forward. building a strong and forward-looking foundation on U.S. National was among the first banks to form a one-bank which to continue our growth. holding company — called U.S. Bancorp. It’s a great heritage we enjoy — and we work hard to Through the past 150 years, hundreds of fine banks, preserve the legacy. whose customers, branches, expertise and assets combined with these ancestor banks, helped to make us a strong, sound company. On February 26, 1863, President Abraham Lincoln signed one of the two National Bank Acts that established a system of national banks, established the Office of the Comptroller of the Currency and authorized the Comptroller to examine and regulate nationally chartered banks. On July 13, 1863, The First National Bank of Cincinnati was formed under national Charter #24, signed by Lincoln’s Comptroller of the Currency, Hugh McCullough. U.S. Bancorp still operates under the same charter, one of the oldest active charters in the industry today. A Strong Future We are always mindful of how much we owe to history and the pioneers of the American banking system, countless courageous souls who first made banking available in villages, small towns and growing cities across the heart of this nation in the 19th century. But today we focus on the future — a strong future — as an innovative company with a well-diversified business model, prudent risk management and an ability to produce consistent, predictable, repeatable results. At year-end 2012, the company Corporate Profile operated 3,084 banking offices and 5,065 ATMs in 25 states. U.S. Bancorp (NYSE: USB) is a diversified financial services U.S. Bank was founded in 1863 under national Charter #24 and holding company and parent company of U.S. Bank is one of the nation’s oldest banks operating under its original National Association, the nation’s fifth-largest commercial charter. The company will celebrate its sesquicentennial bank with $354 billion in assets at December 31, 2012. in 2013. U.S. Bancorp has U.S. Bancorp was named Fortune magazine’s 2012 Most approximately 66,000 employees. Admired Superregional Bank. Headquartered in Minneapolis, U.S. Bancorp is recognized Enhanced Content for strong financial performance, prudent risk management, To see or experience enhanced content, download the Digimarc Discover App from the iTunes App Store or Android Market. capital generation, product quality, customer service and Look for the smartphone symbol. community support. U.S. Bancorp provides a wide range Hold your iPhone or Android about 3–5 inches parallel to the page with your phone’s of financial services for consumers, businesses, government screen facing you. Slowly move your phone toward the page, allowing your camera to focus on the image. entities and other financial institutions. Among its primary The Digimarc Discover App will automatically launch the enhanced content. As a test, services are regional consumer and business banking and scan the photo above to launch usbank.com. wealth management services; national wholesale banking, If you are viewing this page on screen, the Digimarc links may not activate properly. commercial real estate and trust services; and global payments services to more than 17.6 million customers. Please see explanation on Page 19 regarding the risks and uncertainties that may affect the accuracy of forward-looking statements. U.S. BANCORP 1 Selected Financial Highlights Net Income Diluted Earnings Dividends Declared (Dollars in Millions) Per Common Share Per Common Share (In Dollars) (In Dollars) 6,000 3.00 2.00 2.84 5,647 1.70 2.46 4,872 3,000 1.50 1.00 1.73 1.61 3,317 2,946 .78 .97 2,205 .50 .20 .20 0 0 0 08 09 10 11 12 08 09 10 11 12 08 09 10 11 12 Return on Return on Average Dividend Payout Ratio Average Assets Common Equity (In Percents) (In Percents) (In Percents) 2.0 20 100 104.9 1.65 16.2 15.8 1.53 13.9 1.0 10 12.7 50 1.21 1.16 .82 8.2 11.5 27.4 20.6 20.2 0 0 0 08 09 10 11 12 08 09 10 11 12 08 09 10 11 12 Net Interest Margin Efficiency Ratio(a) Tier 1 Capital (taxable-equivalent basis) (In Percents) (In Percents) (In Percents) 4.00 60 12 3.88 3.67 3.66 3.65 10.8 10.8 3.58 10.6 10.5 51.8 51.5 51.5 9.6 48.4 46.9 2.00 30 6 0 0 0 08 09 10 11 12 08 09 10 11 12 08 09 10 11 12 Average Assets Average Shareholders’ Total Risk-based (Dollars in Millions) Equity Capital (Dollars in Millions) (In Percents) 350,000 40,000 15 14.3 13.3 13.3 13.1 12.9 37,611 342,849 318,264 32,200 285,861 268,360 175,000 20,000 28,049 7.5 26,307 244,400 22,570 0 0 0 08 09 10 11 12 08 09 10 11 12 08 09 10 11 12 (a) Computed as noninterest expense divided by the sum of net interest income on a taxable-equivalent basis and noninterest income excluding net securities gains (losses).