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U.S. Bancorp Reports Record Net Income of $1 Billion for the First Quarter 2004

EARNINGS SUMMARY Table 1

    ($ in millions, except per-share data)                Percent  Percent
                                                            Change   Change
                                1Q        4Q        1Q     1Q04 vs  1Q04 vs
                               2004      2003      2003      4Q03     1Q03

     Income from continuing
      operations, net       $1,008.4    $970.3    $884.1      3.9     14.1
     Net income              1,008.4     977.0     884.8      3.2     14.0

     Earnings per share from
      continuing operations
      (diluted)                 0.52      0.50      0.46      4.0     13.0
     Earnings per share
      (diluted)                 0.52      0.50      0.46      4.0     13.0

     Return on average
      assets (%)                2.14      2.05      1.95
     Return on average
      equity(%)                 20.7      19.4      19.1
     Efficiency ratio (%)       47.0      43.1      48.5

     Dividends declared per
      share                    $0.24     $0.24    $0.205       --     17.1
     Book value per share
      (period-end)             10.23     10.01      9.83      2.2      4.1
     Net interest margin (%)    4.29      4.42      4.59


MINNEAPOLIS, April 20 /PRNewswire-FirstCall/ -- U.S. Bancorp (NYSE: USB) today reported net income of $1,008.4 million for the first quarter of 2004, compared with $884.8 million for the first quarter of 2003. Net income of $.52 per diluted share in the first quarter of 2004 was higher than the same period of 2003 by $.06 (13.0 percent). Return on average assets and return on average equity were 2.14 percent and 20.7 percent, respectively, for the first quarter of 2004, compared with returns of 1.95 percent and 19.1 percent, respectively, for the first quarter of 2003.

U.S. Bancorp Chairman, President and Chief Executive Officer Jerry A. Grundhofer said, "Our Company's first quarter results, highlighted by achieving record net income of $1 billion, demonstrate that we are well on our way toward reaching our financial goals for 2004. We expect our industry- leading return on average assets and return on average equity of 2.14 percent and 20.7 percent, respectively, to show modest improvement as the year progresses. We had continued improvement in our credit quality, growth in our fee based businesses and improvement in our overall operating efficiency. During the first quarter, we continued to benefit from growth in both consumer deposit accounts and loans, and we began to see signs of growth in commercial loans. As the economy improves, we are optimistic that this segment will become even stronger.

"With all integration activity completed and credit quality issues abating, we are now focused on generating revenue growth. We remain committed to growing revenue faster than expense, achieving industry leading performance metrics, reaching the top quartile in credit quality, sustaining industry leading capital generation, and returning 80% of our earnings to shareholders; all while providing exceptional customer service. We have the people, the products and services, the advanced technology, the low-cost provider leadership position and the commitment to customer service we need to continue to build and grow this franchise. I am looking forward to the rest of 2004 and what our Company can, and will, accomplish."

The Company's results for the first quarter of 2004 improved over the same period of 2003, primarily due to growth in fee based products and services, as well as controlled operating expense and lower credit costs. Included in the current quarter was a $90.0 million reduction in income tax expense related to the resolution of federal tax examinations covering substantially all of the Company's legal entities for the years 1995 through 1999. The first quarter of 2004 also included the recognition of $109.3 million ($71.7 million on an after-tax basis) of mortgage servicing rights ("MSR") impairment, driven by lower interest rates and related prepayments, and a $35.4 million expense ($23.2 million on an after-tax basis) associated with the prepayment of a portion of the Company's long term debt. The Company took no securities gains in the quarter to offset MSR impairment.

Total net revenue on a taxable-equivalent basis for the first quarter of 2004 was $45.5 million (1.4 percent) lower than the first quarter of 2003, primarily reflecting a $140.7 million reduction in gains on the sale of securities. Favorable revenue growth in the majority of fee based products and services categories partially offset the reduction in securities gains.

Total noninterest expense in the first quarter of 2004 was essentially flat to the first quarter of 2003, primarily reflecting a $17.6 million reduction in merger and restructuring-related charges, an $11.6 million favorable change in the recognition of MSR impairment and cost savings from completed integration activities. These positive variances were partially offset by expense increases in employee benefits, professional services, marketing and business development and other expense, the latter of which included a $35.4 million charge related to the debt prepayment.

Provision for credit losses for the first quarter of 2004 was $235.0 million, a decrease of $100.0 million (29.9 percent) from the first quarter of 2003. Net charge-offs in the first quarter of 2004 were $233.9 million, compared with the fourth quarter of 2003 net charge-offs of $285.1 million and the first quarter of 2003 net charge-offs of $333.8 million. The decline in losses from a year ago was primarily the result of an improving credit risk profile and collection efforts. Total nonperforming assets declined to $1,046.6 million at March 31, 2004, from $1,148.1 million at December 31, 2003 (8.8 percent), and $1,362.6 million at March 31, 2003 (23.2 percent). The ratio of the allowance for credit losses to nonperforming loans was 258 percent at March 31, 2004, compared with 232 percent at December 31, 2003, and 194 percent at March 31, 2003.

On December 31, 2003, the Company completed the spin-off of Piper Jaffray Companies (NYSE: PJC). In connection with the spin-off, accounting rules require that the financial statements be restated for all prior periods. As such, historical financial results related to Piper Jaffray Companies have been segregated and accounted for in the Company's financial statements as discontinued operations. Net income in the first quarter of 2003 and fourth quarter of 2003 included after-tax income from the discontinued operations of Piper Jaffray Companies of $.7 million and $6.7 million, respectively, which had an immaterial impact on diluted earnings per share.

     INCOME STATEMENT HIGHLIGHTS                                    Table 2
     (Taxable-equivalent basis,
      $ in millions,                                      Percent   Percent
      except per-share data)                               Change    Change
                           1Q         4Q         1Q       1Q04 vs   1Q04 vs
                          2004       2003       2003       4Q03      1Q03

     Net interest
      income            $1,779.0   $1,816.7   $1,776.7      (2.1)      0.1
     Noninterest income  1,318.3    1,296.6    1,366.1       1.7      (3.5)
         Total net
          revenue        3,097.3    3,113.3    3,142.8      (0.5)     (1.4)
     Noninterest
      expense            1,454.9    1,342.4    1,454.6       8.4        --
     Provision for
      credit losses        235.0      286.0      335.0     (17.8)    (29.9)
     Income from
      continuing
      operations before
      income taxes       1,407.4    1,484.9    1,353.2      (5.2)      4.0
     Taxable-equivalent
      adjustment             7.2        7.2        7.3        --      (1.4)
     Applicable income
      taxes                391.8      507.4      461.8     (22.8)    (15.2)
     Income from
      continuing
      operations         1,008.4      970.3      884.1       3.9      14.1
     Income from
      discontinued
      operations
      (after-tax)             --        6.7        0.7        nm        nm
     Net income         $1,008.4     $977.0     $884.8       3.2      14.0

     Diluted earnings
      per share:
       Income from
        continuing
        operations         $0.52      $0.50      $0.46       4.0      13.0
       Discontinued
        operations            --         --         --        --        --
         Net income        $0.52      $0.50      $0.46       4.0      13.0


    Net Interest Income

First quarter net interest income on a taxable-equivalent basis was $1,779.0 million, compared with $1,776.7 million recorded in the first quarter of 2003. Average earning assets for the period increased over the first quarter of 2003 by $10.2 billion (6.6 percent), primarily driven by increases in investment securities, residential mortgages, and retail loans, partially offset by a decline in commercial loans and loans held for sale related to mortgage banking activities. The net interest margin in the first quarter of 2004 was 4.29 percent, compared with 4.42 percent in the fourth quarter of 2003 and 4.59 percent in the first quarter of 2003. The decline in the net interest margin in the first quarter of 2004 from the first quarter of 2003 primarily reflected growth in lower-yielding investment securities as a percent of total earning assets, a change in loan mix, and a decline in the margin benefit from net free funds due to lower interest rates. In addition, the net interest margin declined year-over-year as a result of consolidating high credit quality, low margin loans from Stellar Funding Group, Inc., a commercial loan conduit, onto the Company's balance sheet during the third quarter of 2003. The decline in the net interest margin in the first quarter of 2004 from the fourth quarter of 2003 reflected a similar change in earning asset mix.

     NET INTEREST INCOME                                            Table 3
     (Taxable-equivalent basis; $ in millions)
                                                          Change    Change
                           1Q         4Q         1Q      1Q04 vs   1Q04 vs
                          2004       2003       2003       4Q03      1Q03
     Components of net
      interest income
       Income on
        earning assets  $2,265.3   $2,294.9   $2,338.5    $(29.6)   $(73.2)
       Expense on
        interest-bearing
        liabilities        486.3      478.2      561.8       8.1     (75.5)
     Net interest
      income            $1,779.0   $1,816.7   $1,776.7    $(37.7)     $2.3

     Average yields
      and rates paid
       Earning assets
        yield               5.47%      5.58%      6.05%    (0.11)%   (0.58)%
       Rate paid on
        interest-bearing
        liabilities         1.45       1.44       1.82      0.01     (0.37)
     Gross interest
      margin                4.02%      4.14%      4.23%    (0.12)%   (0.21)%
     Net interest margin    4.29%      4.42%      4.59%    (0.13)%   (0.30)%

     Average balances
       Investment
        securities       $44,744    $40,774    $34,220    $3,970   $10,524
       Loans             118,810    119,300    116,311      (490)    2,499
       Earning assets    166,359    163,705    156,126     2,654    10,233
       Interest-bearing
        liabilities      134,966    131,990    124,669     2,976    10,297
       Net free funds*    31,393     31,715     31,457      (322)      (64)

     * Represents noninterest-bearing deposits, allowance for loan losses,
       unrealized gain (loss) on available-for-sale securities, non-earning
       assets, other non-interest bearing liabilities and equity


     AVERAGE LOANS                                                  Table 4
     ($ in millions)
                                                          Percent   Percent
                                                           Change    Change
                           1Q         4Q         1Q       1Q04 vs   1Q04 vs
                          2004       2003       2003       4Q03      1Q03

     Commercial         $33,629    $35,080    $36,339      (4.1)     (7.5)
     Lease financing      4,902      4,959      5,251      (1.1)     (6.6)
       Total commercial  38,531     40,039     41,590      (3.8)     (7.4)

     Commercial
      mortgages          20,554     20,230     20,241       1.6       1.5
     Construction and
      development         6,556      7,060      6,542      (7.1)      0.2
       Total commercial
        real estate      27,110     27,290     26,783      (0.7)      1.2

     Residential
      mortgages          13,610     13,374     10,124       1.8      34.4

     Credit card          5,878      5,713      5,389       2.9       9.1
     Retail leasing       6,192      5,895      5,750       5.0       7.7
     Home equity and
      second mortgages   13,376     13,084     13,470       2.2      (0.7)
     Other retail        14,113     13,905     13,205       1.5       6.9
       Total retail      39,559     38,597     37,814       2.5       4.6

     Total loans       $118,810   $119,300   $116,311      (0.4)      2.1


Average loans for the first quarter of 2004 were $2.5 billion (2.1 percent) higher than the first quarter of 2003, primarily due to growth in average residential mortgages of $3.5 billion (34.4 percent) and retail loans of $1.7 billion (4.6 percent) year-over-year. Total commercial loans declined by $3.1 billion (7.4 percent), while total commercial real estate loans increased by $327 million (1.2 percent). Although the consolidation of loans from the Stellar commercial loan conduit had a positive impact on average loan balances year-over-year, soft economic conditions throughout much of 2003 led to the overall decrease in total commercial loans. Average loans for the first quarter of 2004 were lower than the fourth quarter of 2003 by $490 million (.4 percent), reflecting reductions in commercial and commercial real estate loans, partially offset by growth in both residential mortgages and retail loans. While average commercial loans declined for the quarter, the Company's ending commercial loan balances increased by $480 million from December 31, 2003.

Average investment securities in the first quarter of 2004 were $10.5 billion (30.8 percent) higher than the first quarter of 2003, reflecting the reinvestment of proceeds from declining commercial loan balances and deposit growth from a year ago. Investment securities at March 31, 2004, were $15.0 billion higher than at March 31, 2003, and $2.1 billion higher than the balance at December 31, 2003. During the first quarter of 2004, the Company continued to acquire floating-rate securities and shorter-term fixed-rate securities as part of its asset/liability management activities.

     AVERAGE DEPOSITS                                               Table 5
     ($ in millions)
                                                          Percent   Percent
                                                           Change    Change
                           1Q         4Q         1Q       1Q04 vs   1Q04 vs
                          2004       2003       2003       4Q03      1Q03

     Noninterest-bearing
      deposits           $29,025    $29,647    $32,824      (2.1)    (11.6)
     Interest-bearing
      deposits
       Interest checking  20,948     20,595     17,536       1.7      19.5
       Money market
        accounts          34,397     35,351     28,683      (2.7)     19.9
       Savings accounts    5,898      5,708      5,272       3.3      11.9
         Savings
          products        61,243     61,654     51,491      (0.7)     18.9
       Time certificates
        of deposit less
        than $100,000     13,618     14,182     17,218      (4.0)    (20.9)
       Time deposits
        greater than
        $100,000          12,133     10,786     14,282      12.5     (15.0)
         Total interest-
          bearing
          deposits        86,994     86,622     82,991       0.4       4.8
     Total deposits     $116,019   $116,269   $115,815      (0.2)      0.2


Average noninterest-bearing deposits for the first quarter of 2004 were lower than the first quarter of 2003 by $3.8 billion (11.6 percent). The change was primarily due to lower deposits associated with mortgage banking activities and a decline in Federal government deposits related to their decision in the third quarter of 2003 to pay for treasury management services rather than maintain compensating balances. Average interest-bearing deposits increased by $4.0 billion (4.8 percent) over the first quarter of 2003, driven by increases in savings products balances, partially offset by decreases in time certificates of deposit less than $100,000 and time deposits greater than $100,000.

Average noninterest-bearing deposits for the first quarter of 2004 were $622 million (2.1 percent) lower than the fourth quarter of 2003 due to lower deposits associated with mortgage banking activities and corporate banking. Average interest-bearing deposits were slightly higher than the fourth quarter of 2003 (.4 percent), primarily due to increases in time deposits greater than $100,000, interest checking and savings accounts, partially offset by decreases in money market accounts and time certificates of deposit less than $100,000. Noninterest-bearing deposits at March 31, 2004, were lower than at March 31, 2003, by $3.4 billion (9.8 percent) and were $1.4 billion (4.3 percent) lower than at December 31, 2003.

     NONINTEREST INCOME                                             Table 6
     ($ in millions)
                                                          Percent   Percent
                                                           Change    Change
                            1Q         4Q         1Q      1Q04 vs   1Q04 vs
                           2004       2003       2003       4Q03      1Q03

     Credit and debit
      card revenue        $141.8     $153.4     $127.4      (7.6)     11.3
     Corporate payment
      products revenue      94.8       88.7       86.0       6.9      10.2
     ATM processing
      services              42.2       40.3       42.4       4.7      (0.5)
     Merchant processing
      services             141.1      146.0      127.3      (3.4)     10.8
     Trust and investment
      management fees      248.6      246.6      228.6       0.8       8.7
     Deposit service
      charges              185.2      186.6      163.2      (0.8)     13.5
     Treasury management
      fees                 117.5      116.3      112.0       1.0       4.9
     Commercial products
      revenue              110.4       98.5      104.2      12.1       6.0
     Mortgage banking
      revenue               94.2       91.9       95.4       2.5      (1.3)
     Investment products
      fees and
      commissions           39.3       36.2       35.1       8.6      12.0
     Securities gains
      (losses), net           --       (0.1)     140.7        nm        nm
     Other                 103.2       92.2      103.8      11.9      (0.6)

     Total noninterest
      income            $1,318.3   $1,296.6   $1,366.1       1.7      (3.5)


    Noninterest Income

First quarter noninterest income was $1,318.3 million, a decrease of $47.8 million (3.5 percent) from the same quarter of 2003, and a $21.7 million (1.7 percent) increase over the fourth quarter of 2003. The decline in noninterest income in the first quarter of 2004 from the first quarter of 2003 was driven by a $140.7 million reduction in gains on the sale of securities, partially offset by increases in most other categories of noninterest income. Credit and debit card revenue and corporate payment products revenue were higher in the first quarter of 2004 than the first quarter of 2003 by $14.4 million (11.3 percent) and $8.8 million (10.2 percent), respectively. Although credit and debit card revenue grew year-over-year, the growth was somewhat muted due to the impact of the settlement of the antitrust litigation brought against VISA USA and Mastercard by Wal-Mart Stores, Inc., Sears Roebuck & Co. and other retailers, which lowered the interchange rate on signature debit transactions beginning in August 2003. The year-over-year impact of the VISA settlement on credit and debit card revenue was approximately $8.2 million. This change in the interchange rate, in addition to higher customer loyalty rewards expenses, however, were more than offset by increases in transaction volumes and other rate adjustments. The corporate payment products revenue growth reflected growth in sales and card usage. Merchant processing services revenue was higher in the first quarter of 2004 than the same quarter of 2003 by $13.8 million (10.8 percent), reflecting an increase in transaction volume, partially offset by lower processing spreads due to a change in the mix of merchants. The favorable variance in trust and investment management fees of $20.0 million (8.7 percent) in the first quarter of 2004 over the same period of 2003 was principally driven by higher equity market valuations year-over-year. Deposit service charges were higher year- over-year by $22.0 million (13.5 percent) due to account growth and revenue enhancement initiatives. Treasury management fees grew by $5.5 million (4.9 percent) in the first quarter of 2004 over the same period of 2003. The increase in treasury management fees year-over-year was partially driven by a change during the third quarter of 2003 in the Federal government's payment methodology for treasury management services from compensating balances, reflected in net interest income, to fees. Commercial products revenue increased by $6.2 million (6.0 percent) over the first quarter of 2003 due to higher letter of credit, foreign exchange, syndication, and leasing fees, partially offset by a reduction in conduit servicing revenue. The $4.2 million (12.0 percent) increase in investment products fees and commissions reflected higher sales activity in the Consumer Banking business line. Offsetting these favorable variances were slight declines in mortgage banking revenue and other income year-over-year.

Noninterest income increased in the first quarter of 2004 by $21.7 million (1.7 percent) over the fourth quarter of 2003, the net result of favorable variances in corporate payment products revenue, ATM processing services, trust and investment management fees, treasury management fees, commercial products revenue, mortgage banking revenue, investment products fees and commissions and other income, partially offset by seasonally lower credit and debit card revenue and merchant processing services. Corporate payment products revenue, ATM processing services, commercial products revenue, and investment products fees and commissions rose due to higher processing volumes and product sales. Mortgage banking revenue increased due to higher servicing fee income, partially offset by lower fees from originations and loan sales. Other income was higher by $11.0 million (11.9 percent), the net result of lower end of term lease residual losses partially offset by a decrease in revenue from equity investments relative to the fourth quarter of 2003.

     NONINTEREST EXPENSE                                            Table 7
     ($ in millions)
                                                           Percent   Percent
                                                            Change    Change
                            1Q         4Q         1Q      1Q04 vs   1Q04 vs
                           2004       2003       2003       4Q03      1Q03

     Compensation         $535.8     $539.4     $546.0      (0.7)     (1.9)
     Employee benefits     100.2       81.3       91.7      23.2       9.3
     Net occupancy and
      equipment            155.7      161.6      161.3      (3.7)     (3.5)
     Professional
      services              32.4       44.2       26.4     (26.7)     22.7
     Marketing and
      business
      development           35.3       50.8       29.8     (30.5)     18.5
     Technology and
      communications       101.7      106.3      104.9      (4.3)     (3.1)
     Postage, printing
      and supplies          61.6       61.8       60.4      (0.3)      2.0
     Other intangibles     226.1      124.2      235.1      82.0      (3.8)
     Merger and
      restructuring-related
      charges                 --        7.6       17.6        nm        nm
     Other                 206.1      165.2      181.4      24.8      13.6

     Total noninterest
      expense           $1,454.9   $1,342.4   $1,454.6       8.4        --


    Noninterest Expense

First quarter noninterest expense totaled $1,454.9 million, essentially flat to noninterest expense for the first quarter of 2003. Favorable variances in merger and restructuring-related charges of $17.6 million and other intangibles of $9.0 million (3.8 percent), along with general cost savings from completed integration activities were offset by increases in employee benefits, professional services, marketing and business development, postage, printing and supplies and other expense. Other expense in the first quarter of 2004 included a $35.4 million charge related to the prepayment of a portion of the Company's debt.

Noninterest expense in the first quarter of 2004 was higher than the fourth quarter of 2003 by $112.5 million (8.4 percent). The unfavorable variance from the fourth quarter of 2003 was primarily due to the recognition of $109.3 million of MSR impairment and a $35.4 million charge in other expense related to the prepayment of a portion of the Company's debt in the first quarter of 2004. The fourth quarter of 2003 did not include expense related to changes in MSR valuations. In addition, seasonally high payroll taxes contributed to the unfavorable variance in employee benefits quarter- over-quarter. Partially offsetting these variances were reductions in all other expense categories, reflecting on-going expense management activities.

     ALLOWANCE FOR CREDIT LOSSES                                   Table 8
     ($ in millions)
                            1Q         4Q         3Q        2Q        1Q
                           2004       2003       2003      2003      2003

     Balance, beginning
      of period         $2,368.6   $2,367.7   $2,367.6  $2,408.5  $2,422.0

     Net charge-offs
       Commercial           53.6      100.9      123.9     122.9     137.9
       Lease financing      21.3       14.9       19.2      26.9      23.0
         Total commercial   74.9      115.8      143.1     149.8     160.9
       Commercial
        mortgages            4.6       10.0        5.9       9.3       2.9
       Construction and
        development          4.7        2.9        4.6       2.5       1.0
         Total commercial
          real estate        9.3       12.9       10.5      11.8       3.9

       Residential
        mortgages            7.3        7.2        7.3       6.5       5.9

       Credit card          63.4       62.3       59.3      64.5      68.7
       Retail leasing       11.0       11.3       12.2      12.6      13.9
       Home equity and
        second mortgages    19.5       20.4       23.2      23.9      25.4
       Other retail         48.5       55.2       54.3      53.8      55.1
         Total retail      142.4      149.2      149.0     154.8     163.1
           Total net
            charge-offs    233.9      285.1      309.9     322.9     333.8

     Provision for
      credit losses        235.0      286.0      310.0     323.0     335.0
     Acquisitions and
      other changes           --         --         --     (41.0)    (14.7)

     Balance, end of
      period            $2,369.7   $2,368.6   $2,367.7  $2,367.6  $2,408.5

     Components
       Allowance for
        loan losses     $2,238.3   $2,235.0   $2,241.2  $2,266.2  $2,295.0
       Liability for
        unfunded credit
        commitments *      131.4      133.6      126.5     101.4     113.5
         Total allowance
          for credit
          losses        $2,369.7   $2,368.6   $2,367.7  $2,367.6  $2,408.5

     Net charge-offs
      to average
      loans (%)             0.79       0.95       1.02      1.10      1.16

     Allowance for credit
      losses as a
      percentage of:
       Period-end loans     1.98       2.00       1.98      1.98      2.06
       Nonperforming
        loans                258        232        202       194       194
       Nonperforming
        assets               226        206        180       174       177

     * During the first quarter of 2004, the Company reclassified the portion
       of its allowance for credit losses related to commercial off-balance
       sheet loan commitments and letters of credit to a separate liability
       account.


    Credit Quality

The allowance for credit losses was $2,369.7 million at March 31, 2004, compared with the allowance for credit losses of $2,368.6 million at December 31, 2003, and $2,408.5 million at March 31, 2003. The ratio of the allowance for credit losses to period-end loans was 1.98 percent at March 31, 2004, compared with 2.00 percent at December 31, 2003, and 2.06 percent at March 31, 2003. The ratio of the allowance for credit losses to nonperforming loans was 258 percent at March 31, 2004, compared with 232 percent at December 31, 2003, and 194 percent at March 31, 2003. Total net charge-offs in the first quarter of 2004 were $233.9 million, compared with the fourth quarter of 2003 net charge-offs of $285.1 million and the first quarter of 2003 net charge-offs of $333.8 million.

Commercial and commercial real estate loan net charge-offs were $84.2 million for the first quarter of 2004, or .52 percent of average loans outstanding, compared with $128.7 million, or .76 percent of average loans outstanding, in the fourth quarter of 2003 and $164.8 million, or .98 percent of average loans outstanding, in the first quarter of 2003. The decline in net charge-offs was broad-based across most industries within the commercial loan portfolio.

Retail loan net charge-offs of $142.4 million in the first quarter of 2004 were $6.8 million (4.6 percent) lower than the fourth quarter of 2003 and $20.7 million (12.7 percent) lower than the first quarter of 2003. Retail loan net charge-offs as a percent of average loans outstanding were 1.45 percent in the first quarter of 2004, compared with 1.53 percent and 1.75 percent in the fourth quarter of 2003 and first quarter of 2003, respectively. Lower levels of retail loan net charges-offs principally reflected the Company's improvement in ongoing collection efforts and risk management.

     CREDIT RATIOS                                                  Table 9
     (Percent)
                             1Q         4Q         3Q        2Q        1Q
                            2004       2003       2003      2003      2003
     Net charge-offs ratios*
       Commercial           0.64       1.14       1.33      1.35      1.54
       Lease financing      1.75       1.19       1.52      2.11      1.78
         Total commercial   0.78       1.15       1.35      1.44      1.57

       Commercial
        mortgages           0.09       0.20       0.12      0.19      0.06
       Construction and
        development         0.29       0.16       0.25      0.14      0.06
         Total commercial
          real estate       0.14       0.19       0.15      0.17      0.06

       Residential
        mortgages           0.22       0.21       0.24      0.24      0.24

       Credit card          4.34       4.33       4.20      4.80      5.17
       Retail leasing       0.71       0.76       0.83      0.88      0.98
       Home equity and
        second mortgages    0.59       0.62       0.70      0.72      0.76
       Other retail         1.38       1.57       1.55      1.59      1.69
         Total retail       1.45       1.53       1.54      1.63      1.75

     Total net charge-offs  0.79       0.95       1.02      1.10      1.16

     Delinquent loan ratios - 90 days or more past due excluding
      nonperforming loans**
       Commercial           0.06       0.06       0.11      0.09      0.10
       Commercial real
        estate              0.01       0.02       0.01      0.02      0.03
       Residential
        mortgages           0.56       0.61       0.63      0.65      0.82
       Retail               0.54       0.56       0.57      0.63      0.71
     Total loans            0.27       0.28       0.29      0.30      0.34

     Delinquent loan ratios - 90 days or more past due including
      nonperforming loans**
       Commercial           1.67       1.97       2.31      2.27      2.33
       Commercial real
        estate              0.85       0.82       0.75      0.82      0.85
       Residential
        mortgages           0.87       0.91       0.98      1.13      1.37
       Retail               0.59       0.62       0.63      0.70      0.77
     Total loans            1.03       1.14       1.27      1.32      1.40

     *  annualized and calculated on average loan balances
     ** ratios are expressed as a percent of ending loan balances

The overall level of net charge-offs in the first quarter of 2004 reflected the Company's ongoing efforts to reduce the overall risk profile of the organization. Net charge-offs are expected to continue to trend modestly lower.

     ASSET QUALITY                                                Table 10
     ($ in millions)
                          Mar 31     Dec 31     Sep 30    Jun 30    Mar 31
                           2004       2003       2003      2003      2003
     Nonperforming loans
       Commercial         $510.7     $623.5     $793.9    $795.2    $808.4
       Lease financing     115.6      113.3      111.6     126.6     129.4
         Total commercial  626.3      736.8      905.5     921.8     937.8
       Commercial
        mortgages          184.9      177.6      161.5     182.0     174.6
       Construction and
        development         43.6       39.9       40.2      35.3      46.1
         Commercial real
          estate           228.5      217.5      201.7     217.3     220.7
       Residential
        mortgages           42.1       40.5       46.1      56.0      57.4
       Retail               20.4       25.2       21.6      24.2      23.9
     Total nonperforming
      loans                917.3    1,020.0    1,174.9   1,219.3   1,239.8

     Other real estate      76.0       72.6       70.4      71.5      66.2
     Other nonperforming
      assets                53.3       55.5       73.0      68.9      56.6

     Total nonperforming
      assets*           $1,046.6   $1,148.1   $1,318.3  $1,359.7  $1,362.6

     Accruing loans 90
      days or more past
      due                 $319.2     $329.4     $352.4    $360.7    $403.5

     Nonperforming assets
      to loans plus ORE
      (%)                   0.87       0.97       1.10      1.14      1.16

     * does not include accruing loans 90 days or more past due


Nonperforming assets at March 31, 2004, totaled $1,046.6 million, compared with $1,148.1 million at December 31, 2003, and $1,362.6 million at March 31, 2003. The ratio of nonperforming assets to loans and other real estate was .87 percent at March 31, 2004, compared with .97 percent at December 31, 2003, and 1.16 percent at March 31, 2003. Given the Company's ongoing efforts to reduce the overall risk profile of the organization, nonperforming assets are expected to continue to trend lower.

     CAPITAL POSITION                                             Table 11
     ($ in millions)
                          Mar 31    Dec 31     Sep 30    Jun 30     Mar 31
                           2004      2003       2003      2003       2003

     Total shareholders'
      equity             $19,452    $19,242    $19,771   $19,521   $18,862
     Tier 1 capital       14,499     14,623     14,589    13,950    13,215
     Total risk-based
      capital             21,559     21,710     21,859    21,392    20,242

     Common equity to
      assets                10.1%      10.2%      10.5%     10.0%     10.4%
     Tangible common
      equity to assets       6.4        6.5        6.6       6.0       6.0
     Tier 1 capital ratio    8.9        9.1        9.0       8.5       8.2
     Total risk-based
      capital ratio         13.3       13.6       13.5      13.0      12.6
     Leverage ratio          8.0        8.0        8.0       7.8       7.6


Total shareholders' equity was $19.5 billion at March 31, 2004, compared with $18.9 billion at March 31, 2003. The increase was the result of corporate earnings offset primarily by dividends, including the special dividend of $685 million related to the spin-off of Piper Jaffray Companies, and share buybacks.

Tangible common equity to assets was 6.4 percent at March 31, 2004, compared with 6.5 percent at December 31, 2003, and 6.0 percent at March 31, 2003. The Tier 1 capital ratio was 8.9 percent at March 31, 2004, compared with 9.1 percent at December 31, 2003, and 8.2 percent at March 31, 2003. The total risk-based capital ratio was 13.3 percent at March 31, 2004, compared with 13.6 percent at December 31, 2003, and 12.6 percent at March 31, 2003. The leverage ratio was 8.0 percent at March 31, 2004, compared with 8.0 percent at December 31, 2003, and 7.6 percent at March 31, 2003. All regulatory ratios continue to be in excess of stated "well capitalized" requirements.

     COMMON SHARES                                                 Table 12
     (Millions)
                            1Q         4Q         3Q        2Q        1Q
                           2004       2003       2003      2003      2003

     Beginning shares
      outstanding        1,922.9    1,927.4    1,924.5   1,919.0   1,917.0

     Shares issued for
      stock option and
      stock purchase
      plans, acquisitions
      and other corporate
      purposes              12.1       10.5        2.9       5.5       2.0
     Shares repurchased    (33.8)     (15.0)        --        --        --
     Ending shares
      outstanding        1,901.2    1,922.9    1,927.4   1,924.5   1,919.0


On December 16, 2003, the board of directors of U.S. Bancorp approved an authorization to repurchase 150 million shares of outstanding common stock during the following 24 months. During the first quarter of 2004, the Company repurchased 33.8 million shares of common stock in both open market and privately negotiated transactions. As of March 31, 2004, there were approximately 108 million shares remaining to be repurchased under the current authorization.

     LINE OF BUSINESS FINANCIAL PERFORMANCE*                       Table 13
     ($ in millions)
                        Net Operating Earnings**   Percent Change   1Q 2004
                        1Q        4Q      1Q    1Q04 vs   1Q04 vs  Earnings
     Business Line     2004      2003    2003     4Q03      1Q03  Composition

     Wholesale
      Banking         $264.7   $234.8   $226.0     12.7     17.1       26%
     Consumer
      Banking***       321.2    367.7    349.5    (12.6)    (8.1)      32
     Private Client,
      Trust and Asset
      Management       123.8    117.6     98.0      5.3     26.3       12
     Payment Services  160.5    163.3    132.9     (1.7)    20.8       16
     Treasury and
      Corporate
      Support          138.2     91.9     89.2     50.4     54.9       14

     Consolidated
      Company       $1,008.4   $975.3   $895.6      3.4     12.6      100%

     *   preliminary data
     **  earnings before merger and restructuring-related items and
         discontinued operations
     *** In 1Q04 Consumer Banking's retail banking business grew net operating
         earnings by 8.5 percent and 18.6 percent over 4Q03 and 1Q03,
         respectively.  The Consumer Bank's mortgage banking business
         profitability declined in 1Q04 due to MSR impairment of
         $109.3 million that was not offset by realizing securities gains in
         the quarter.


    Lines of Business

Within the Company, financial performance is measured by major lines of business which include Wholesale Banking, Consumer Banking, Private Client, Trust and Asset Management, Payment Services, and Treasury and Corporate Support. These operating segments are components of the Company about which financial information is available and is evaluated regularly in deciding how to allocate resources and assess performance. Designations, assignments and allocations may 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 our diverse customer base. During 2004, a methodology change was made to allocate operational expenses incurred by Treasury and Corporate Support on behalf of the other major lines of business back to the appropriate operating segment. These allocations are identified as net shared services expense on the business lines' income statements. Accordingly, results for 2003 have been restated and presented on a comparable basis.

Wholesale Banking offers lending, depository, treasury management and other financial services to middle market, large corporate and public sector clients. Wholesale Banking contributed $264.7 million of the Company's operating earnings in the first quarter of 2004, a 17.1 percent increase over the same period of 2003 and a 12.7 percent increase over the fourth quarter of 2003. The increase in Wholesale Banking's first quarter 2004 contribution over the first quarter of 2003 was the result of favorable variances in total noninterest expense (5.5 percent) and the provision for credit losses (70.4 percent), partially offset by a decrease in total net revenue (4.6 percent). Total net revenue in the first quarter of 2004 was lower than in the first quarter of 2003, reflecting unfavorable variances in both net interest income (5.3 percent) and noninterest income (3.4 percent). The decrease in net interest income was primarily due to declines in average total loans outstanding (6.2 percent), partially offset by higher average total deposits (4.6 percent). Although treasury management fees were higher (9.7 percent) year-over-year, the growth was more than offset by unfavorable variances in commercial products revenue (5.9 percent), primarily conduit servicing fees, and other revenue. The increase in treasury management fees was principally driven by a change during the third quarter of 2003 in the Federal government's payment methodology for treasury management services from compensating balances to fees. Wholesale Banking's favorable variance in total noninterest expense year-over-year was driven by a decrease in other expense, the result of lower loan workout-related expense relative to the first quarter of 2003, partially offset by an increase in net shared services expense, which is primarily driven by customer transaction volume and account activities. The decrease in the provision for credit losses year-over-year was the result of a reduction in net charge-offs. The increase in Wholesale Banking's contribution to operating earnings in the first quarter of 2004 over the fourth quarter of 2003 was the net result of favorable variances in total noninterest expense (4.4 percent) and the provision for credit losses, partially offset by slightly lower total net revenue (.2 percent). Total net revenue in the first quarter of 2004 was lower than the previous quarter due to lower net interest income (2.8 percent) partially offset by growth in noninterest income (5.6 percent). The change in net interest income reflected reductions from the prior quarter in the business line's average loans outstanding and average deposits. The growth quarter-to-quarter in noninterest income was attributed to higher commercial products revenue, primarily syndication revenue, lease residual gains and letter of credit fees. The decrease in noninterest expense was principally due to lower loan-related expense. Lower net charge-offs from improving credit quality drove the favorable variance in provision for credit losses.

Consumer Banking delivers products and services to the broad consumer market and small businesses through banking offices, telemarketing, on-line services, direct mail and automated teller machines ("ATMs"). It encompasses community banking, metropolitan banking, small business banking, including lending guaranteed by the Small Business Administration, small-ticket leasing, consumer lending, mortgage banking, workplace banking, student banking, 24- hour banking, and investment product and insurance sales. Consumer Banking contributed $321.2 million of the Company's operating earnings in the first quarter of 2004, an 8.1 percent decrease from the same period of 2003 and a 12.6 percent decline from the fourth quarter of 2003. While the retail banking business segment grew net operating earnings by 18.6 percent and 8.5 percent over the first quarter of 2003 and the fourth quarter of 2003, respectively, the contribution of the mortgage banking business declined. The decrease in the mortgage banking business from the first quarter of 2003 was primarily the result of a reduction in gains on the sale of securities of $105.8 million that, generally, are utilized by the Company to offset impairment of mortgage servicing rights. In the first quarter of 2004, the Company elected not to sell higher yielding securities to offset MSR impairment within the mortgage banking business segment.

For the Consumer Banking business, as a whole, the unfavorable variance in gains on the sale of securities was partially offset with favorable variances in net interest income (.4 percent), noninterest income (9.7 percent), total noninterest expense (2.2 percent) and the provision for credit losses (3.9 percent). Net interest income improved year-over-year (.4 percent), the result of increases in average loans and average core deposits, partially offset by a decline in the business line's net interest margin. Noninterest income also improved in the first quarter of 2004 over the same period of 2003, primarily due to growth in deposit service charges, investment products fees and commissions and other revenue. Other revenue was higher due to lower lease residual losses relative to the first quarter of 2003. Total noninterest expense in the first quarter of 2004 was lower than the first quarter of 2003 (2.2 percent), mainly due to favorable changes in net shared services expense and lower MSR impairment relative to 2003. A reduction in net charge-offs year-over-year drove the positive variance in the business line's provision for credit losses. The decline in Consumer Banking's contribution in the first quarter of 2004 from the fourth quarter of 2003 was primarily the result of the recognition of $109.3 million of MSR impairment in 2004. Offsetting this unfavorable variance were positive changes in total net revenue (1.0 percent), noninterest expense (3.8 percent) and the provision for credit losses (1.2 percent).

Private Client, Trust and Asset Management provides trust, private banking, financial advisory, investment management and mutual fund and alternative investment product services through five businesses: Private Client Group, Corporate Trust, Asset Management, Institutional Trust, and Custody and Fund Services, LLC. Private Client, Trust and Asset Management contributed $123.8 million of the Company's operating earnings in the first quarter of 2004, 26.3 percent higher than the same period of 2003 and 5.3 percent higher than the fourth quarter of 2003. The favorable variance in the business line's contribution in the first quarter of 2004 over the first quarter of 2003 was the result of favorable variances in total net revenue (12.0 percent) and total noninterest expense (2.1 percent). Higher average total deposit balances (45.5 percent) favorably impacted net interest income year-over-year, while noninterest income benefited from higher asset management revenue due to improving equity market valuations. The favorable variance in expense was primarily due to business line cost savings year-over- year and slightly lower intangible amortization. The increase in the business line's contribution (5.3 percent) in the first quarter of 2004 over the fourth quarter of 2003 was the result of higher total net revenue (2.0 percent), lower total noninterest expense (1.4 percent) and a decrease in the provision for credit losses. The increase in net interest income from the fourth quarter of 2003 to the first quarter of 2004 was primarily driven by an increase in average total deposits (8.2 percent), while noninterest income benefited from higher equity market valuations.

Payment Services includes consumer and business credit cards, corporate and purchasing card services, consumer lines of credit, ATM processing, merchant processing, and debit cards. Payment Services contributed $160.5 million of the Company's operating earnings in the first quarter of 2004, a 20.8 percent increase over the same period of 2003, but a 1.7 percent decrease over the fourth quarter of 2003. The increase in Payment Services' contribution in the first quarter of 2004 from the same period of 2003 was the result of higher total net revenue (5.2 percent) and a lower provision for credit losses (14.6 percent). The increase in total net revenue year-over- year was primarily due to growth in noninterest income (10.5 percent), partially offset by lower net interest income (7.1 percent), which reflected lower spreads on retail credit cards and a reduction in late fees relative to the prior year's quarter. The increase in noninterest income was principally the result of growth in credit and debit card revenue (11.1 percent), corporate payment products revenue (10.2 percent) and merchant processing services revenue (10.8 percent). Although credit and debit card revenue was negatively impacted in the first quarter of 2004 by the VISA debit card settlement and higher customer loyalty rewards expense, increases in transaction volumes and other rate adjustments more than offset these detrimental changes. The decrease in Payment Services' contribution in the first quarter of 2004 from the fourth quarter of 2003 was primarily due to seasonally lower total net revenue (2.1 percent), offset by a reduction in the provision for credit losses, the result of a favorable change in net charge- offs.

Treasury and Corporate Support includes the Company's investment portfolios, funding, capital management and asset securitization activities, interest rate risk management, the net effect of transfer pricing related to average balances and business activities managed on a corporate basis, including enterprise-wide operations and administrative support functions. Operational expenses incurred by Treasury and Corporate Support on behalf of the other business lines are allocated back primarily based on customer transaction volume and account activities to the appropriate business unit and are identified as net shared services expense. Treasury and Corporate Support recorded operating earnings of $138.2 million in the first quarter of 2004, compared with operating earnings of $89.2 million in the first quarter of 2003 and $91.9 million in the fourth quarter of 2003. The increase in operating earnings in the current quarter over the first quarter of 2003 was largely the net result of a $90.0 million reduction in income tax expense related to the resolution of federal tax examinations for the years 1995 through 1999 and a $35.4 million charge associated with the prepayment of a portion of the Company's debt in the first quarter of 2004. In addition, revenue declined year-over-year due to a $35.8 million decrease in gains on the sale of securities. The favorable variance in operating earnings in the first quarter of 2004 over the fourth quarter of 2003 was principally the net result of the reduction in income tax expense and the charge associated with the prepayment of debt, as well as lower revenue from equity investments relative to the fourth quarter of 2003.

Additional schedules containing more detailed information about the Company's business line results are available on the web at usbank.com or by calling Investor Relations at 612-303-0781.

CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, JERRY A. GRUNDHOFER, AND VICE CHAIRMAN AND CHIEF FINANCIAL OFFICER, DAVID M. MOFFETT, WILL HOST A CONFERENCE CALL TO REVIEW THE FINANCIAL RESULTS ON TUESDAY, April 20, 2004, AT 3:00 p.m. (CDT). To access the conference call, please dial 800-540-0559 and ask for the U.S. Bancorp earnings conference call. Participants calling from outside the United States, please call 785-832-1508. For those unable to participate during the live call, a recording of the call will be available approximately one hour after the conference call ends on Tuesday, April 20, 2004, and will run through Tuesday, April 27, 2004, at 11:00 p.m. (CDT). To access the recorded message dial 888-276-5315. If calling from outside the United States, please dial 402-220-2332.

Minneapolis-based U.S. Bancorp ("USB"), with $192 billion in assets, is the 7th largest financial services holding company in the United States. The company operates 2,275 banking offices and 4,472 ATMs, and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. U.S. Bancorp is the parent company of U.S. Bank. Visit U.S. Bancorp on the web at usbank.com.

Forward-Looking Statements

This press release contains forward-looking statements. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements. These statements often include the words "may," "could," "would," "should," "believes," "expects," "anticipates," "estimates," "intends," "plans," "targets," "potentially," "probably," "projects," "outlook" or similar expressions. These forward- looking statements cover, among other things, anticipated future revenue and expenses, and the future prospects of the Company. Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated, including the following, in addition to those contained in the Company's reports on file with the SEC: (i) general economic or industry conditions could be less favorable than expected, resulting in a deterioration in credit quality, a change in the allowance for credit losses, or a reduced demand for credit or fee-based products and services; (ii) changes in the domestic interest rate environment could reduce net interest income and could increase credit losses; (iii) inflation, changes in securities market conditions and monetary fluctuations could adversely affect the value or credit quality of the Company's assets, or the availability and terms of funding necessary to meet the Company's liquidity needs; (iv) changes in the extensive laws, regulations and policies governing financial services companies could alter the Company's business environment or affect operations; (v) the potential need to adapt to industry changes in information technology systems, on which the Company is highly dependent, could present operational issues or require significant capital spending; (vi) competitive pressures could intensify and affect the Company's profitability, including as a result of continued industry consolidation, the increased availability of financial services from non- banks, technological developments, or bank regulatory reform; (vii) changes in consumer spending and savings habits could adversely affect the Company's results of operations; (viii) changes in the financial performance and condition of the Company's borrowers could negatively affect repayment of such borrowers' loans; (ix) acquisitions may not produce revenue enhancements or cost savings at levels or within time frames originally anticipated, or may result in unforeseen integration difficulties; (x) capital investments in the Company's businesses may not produce expected growth in earnings anticipated at the time of the expenditure; and (xi) acts or threats of terrorism, and/or political and military actions taken by the U.S. or other governments in response to acts or threats of terrorism or otherwise could adversely affect general economic or industry conditions. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update them in light of new information or future events.

    U.S. Bancorp
    Consolidated Statement Of Income

    (Dollars and Shares in Millions,                   Three Months Ended
     Except Per Share Data)                                 March 31,
    (Unaudited)                                      2004              2003

    Interest Income
    Loans                                         $1,747.0          $1,836.7
    Loans held for sale                               19.9              59.6
    Investment securities
         Taxable                                     464.0             396.1
         Non-taxable                                   5.3               8.9
    Other interest income                             21.9              29.9
           Total interest income                   2,258.1           2,331.2

    Interest Expense
    Deposits                                         227.0             306.6
    Short-term borrowings                             49.9              39.5
    Long-term debt                                   185.9             184.3
    Company-obligated mandatorily redeemable
     preferred securities of subsidiary trusts
     holding solely the junior subordinated
     debentures of the parent company                 23.5              31.4
           Total interest expense                    486.3             561.8
    Net interest income                            1,771.8           1,769.4
    Provision for credit losses                      235.0             335.0
    Net interest income after provision for
     credit losses                                 1,536.8           1,434.4

    Noninterest Income
    Credit and debit card revenue                    141.8             127.4
    Corporate payment products revenue                94.8              86.0
    ATM processing services                           42.2              42.4
    Merchant processing services                     141.1             127.3
    Trust and investment management fees             248.6             228.6
    Deposit service charges                          185.2             163.2
    Treasury management fees                         117.5             112.0
    Commercial products revenue                      110.4             104.2
    Mortgage banking revenue                          94.2              95.4
    Investment products fees and commissions          39.3              35.1
    Securities gains, net                               --             140.7
    Other                                            103.2             103.8
           Total noninterest income                1,318.3           1,366.1

    Noninterest Expense
    Compensation                                     535.8             546.0
    Employee benefits                                100.2              91.7
    Net occupancy and equipment                      155.7             161.3
    Professional services                             32.4              26.4
    Marketing and business development                35.3              29.8
    Technology and communications                    101.7             104.9
    Postage, printing and supplies                    61.6              60.4
    Other intangibles                                226.1             235.1
    Merger and restructuring-related charges            --              17.6
    Other                                            206.1             181.4
           Total noninterest expense               1,454.9           1,454.6

    Income from continuing operations before
     income taxes                                  1,400.2           1,345.9
    Applicable income taxes                          391.8             461.8

    Income from continuing operations              1,008.4             884.1
    Income (loss) from discontinued operations
     (after-tax)                                        --                .7
    Net income                                    $1,008.4            $884.8

    Earnings Per Share
         Income from continuing operations            $.53              $.46
         Discontinued operations                        --                --
         Net income                                   $.53              $.46

    Diluted Earnings Per Share
         Income from continuing operations            $.52              $.46
         Discontinued operations                        --                --
         Net income                                   $.52              $.46

    Dividends declared per share                     $.240             $.205
    Average common shares                          1,915.4           1,919.0
    Average diluted common shares                  1,941.1           1,925.6


    U.S. Bancorp
    Consolidated Ending Balance Sheet

                                              March      December     March
                                                31,         31,         31,
    (Dollars in Millions)                      2004        2003        2003
    Assets                                 (Unaudited)             (Unaudited)
    Cash and due from banks                   $7,177      $8,630      $8,910
    Investment securities
       Held-to-maturity                          137         152         220
       Available-for-sale                     45,268      43,182      30,231
    Loans held for sale                        1,644       1,433       3,102
    Loans
       Commercial                             39,006      38,526      42,011
       Commercial real estate                 27,215      27,242      26,893
       Residential mortgages                  13,717      13,457      10,329
       Retail                                 39,945      39,010      37,939
         Total loans                         119,883     118,235     117,172
           Less allowance for loan losses     (2,238)     (2,369)     (2,409)
           Net loans                         117,645     115,866     114,763
    Premises and equipment                     1,924       1,957       1,655
    Customers' liability on acceptances          148         121         140
    Goodwill                                   6,095       6,025       6,332
    Other intangible assets                    2,025       2,124       2,181
    Other assets                              10,030       9,796      14,697
           Total assets                     $192,093    $189,286    $182,231

    Liabilities and Shareholders' Equity
    Deposits
       Noninterest-bearing                   $31,086     $32,470     $34,459
       Interest-bearing                       74,262      74,749      68,909
       Time deposits greater than $100,000    13,616      11,833      11,853
           Total deposits                    118,964     119,052     115,221
    Short-term borrowings                     13,431      10,850       6,576
    Long-term debt                            30,851      31,215      32,068
    Junior subordinated debentures issued
     to unconsolidated subsidiary trusts *     2,717       2,601       2,983
    Acceptances outstanding                      148         121         140
    Other liabilities                          6,530       6,205       6,381
           Total liabilities                 172,641     170,044     163,369
    Shareholders' equity
       Common stock                               20          20          20
       Capital surplus                         5,832       5,851       5,823
       Retained earnings                      15,059      14,508      13,596
       Less treasury stock                    (1,853)     (1,205)     (1,222)
       Other comprehensive income                394          68         645
           Total shareholders' equity         19,452      19,242      18,862
           Total liabilities and
            shareholders' equity            $192,093    $189,286    $182,231

    * Amounts prior to 2004 represented Company-obligated mandatorily
      redeemable preferred securities.  The subsidiary grantor trusts, which
      issue mandatorily redeemable preferred securities, were de-consolidated
      under the provisions of FIN 46 on March 31, 2004.

SOURCE U.S. Bancorp

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding U.S. Bancorp's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.



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