US BANCORP /OR/, 10-K405, 1995-03-13

US BANCORP /OR/
10-K405, 1995-03-13
NATIONAL COMMERCIAL BANKS

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K
/X/ Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
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For the fiscal year ended
December 31, 1994

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Commission File Number
0-3505
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U. S. BANCORP
(Exact name of registrant as specified in its charter)

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Oregon 93-0571730
(State or other jurisdiction of (I.R.S.
incorporation or organization) Employer
Identification
No.)
111 S.W. Fifth Avenue, 97204
Portland, Oregon (Zip
(Address of principal executive offices) Code)
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Registrant's telephone number, including area code: (503) 275-6111

Securities registered pursuant to Section 12(b) of the Act:
None

Securities registered pursuant to Section 12(g) of the Act:
8 1/8% Cumulative Preferred Stock, Series A
(Title of class)

Common Stock, Par Value Five Dollars Per Share
(Title of class)

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 X No _
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/

State the aggregate market value of the voting stock held by non-affiliates
of the registrant.
$2,191,543,196 at February 16, 1995

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

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Class Outstanding at February 16, 1995
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Common Stock, Par Value Five Dollars Per Share 98,120,077 Shares
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DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the
Part of the Form 10-K into which the document is incorporated: Portions of the
U. S. Bancorp Definitive Proxy Statement dated March 13, 1995, are incorporated
by reference into Part III of Form 10-K.

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INDEX

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Page
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PART I
Item 1. BUSINESS.................................................... 1
General..................................................... 1
Commercial Banking.......................................... 2
U. S. Bank of Oregon and U. S. Bank of Washington........... 2
Commercial Activities....................................... 2
Consumer Activities......................................... 2
International Banking Activities............................ 2
Trust Activities............................................ 3
Competition................................................. 3
Other Banking Subsidiaries.................................. 3
Nonbank Subsidiaries........................................ 4
Employees................................................... 4
Monetary Policies........................................... 4
Supervision and Regulation.................................. 4
U. S. Bancorp............................................... 4
Banking Subsidiaries........................................ 6
Other Subsidiaries.......................................... 7
Item 2. PROPERTIES.................................................. 7
Item 3. LEGAL PROCEEDINGS........................................... 8
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS......... 8
EXECUTIVE OFFICERS OF THE REGISTRANT........................ 8
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS......................................... 11
Item 6. SELECTED FINANCIAL DATA..................................... 12
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS................................... 13
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA................. 36
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.................................... 70
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(See Part I for Executive Officers of the Registrant)....... 71
Item 11. EXECUTIVE COMPENSATION...................................... 71
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.................................................. 71
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.............. 71
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
8-K......................................................... 72
SIGNATURES............................................................ 73
EXHIBIT INDEX......................................................... 75
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PART I

ITEM 1. BUSINESS

GENERAL

U. S. Bancorp is a regional multi-bank holding company incorporated in the
state of Oregon in 1968 and headquartered in Portland, Oregon. At December 31,
1994, U. S. Bancorp had consolidated assets of $21.8 billion and shareholders'
equity of $1.8 billion. U.S. Bancorp is among the 35 largest bank holding
companies in the United States in terms of total assets.

The principal subsidiaries of U. S. Bancorp at December 31, 1994, were
United States National Bank of Oregon ("U. S. Bank of Oregon"), also
headquartered in Portland, Oregon, and U. S. Bank of Washington, National
Association ("U. S. Bank of Washington"), headquartered in Seattle, Washington.
U. S. Bank of Oregon and U. S. Bank of Washington are engaged in a general
retail and commercial banking business. In terms of deposits, at June 30, 1994,
U. S. Bank of Oregon was the largest bank in Oregon and the 52nd largest
commercial bank in the United States. Also at that date, U. S. Bank of
Washington was, in terms of deposits, the third largest commercial bank in the
state of Washington and the 99th largest commercial bank in the United States.

Other subsidiaries of U. S. Bancorp provide financial services related to
banking, including mortgage banking, lease financing, consumer and commercial
finance including credit cards, discount brokerage, investment advisory
services, and insurance agency and credit life insurance services. In addition,
in 1994, the investment advisor subsidiary of U. S. Bank of Oregon, Qualivest
Capital Management, Inc., commenced advising a new group of mutual funds, the
Qualivest Funds. U. S. Bancorp's principal activities are located in the Pacific
Northwest, but it has operations throughout the Far West and, to a lesser
extent, the rest of the United States. U. S. Bancorp also actively reviews
proposals for various acquisition opportunities with which it is regularly
presented.

In 1994, U. S. Bancorp commenced a major cost reduction and revenue
enhancement program to improve productivity and to achieve an overhead ratio
(noninterest expenses as a percentage of tax-equivalent net interest income and
noninterest revenue) of 59 percent within three years of the start of the
program. In connection with this program, U. S. Bancorp is consolidating certain
operations and facilities for efficiency and has divested or closed facilities
or activities that no longer fit U. S. Bancorp's corporate objectives or the
needs of regional customers.

U. S. Bancorp's ongoing program has resulted in the sale of a significant
portion of the assets of U. S. Bancorp Mortgage Company in the third quarter of
1994, including $3.6 billion of the $4.3 billion residential mortgage loan
servicing portfolio and 50 loan origination offices in various states. Since the
sale, mortgage banking services are being provided through the branches of the
bank subsidiaries and a loan by phone program. Additionally, U. S. Bancorp
closed Agent Financial Services Corporation, a loan securitization business. In
early January 1995, U. S. Bancorp sold its credit reporting subsidiary, CREDCO,
Inc., and is currently winding down operations of its import/export financing
subsidiary, U. S. World Trade Corporation, and U. S. Bank (Canada).

Additionally, the program included staff reductions of the number of
full-time equivalent employees through attrition, a special retirement
opportunity for certain employees, other severance programs, and the
consolidation of certain operations and facilities. An eighteen percent
reduction in full-time equivalent employees was accomplished during 1994 as a
result of these actions.

U. S. Bancorp's program to increase efficiency and reduce overhead is
continuing into 1995. In January 1995, U. S. Bancorp announced that operations
and objectives for U. S. Bank of Idaho, National Association would be refocused
on retail and small business banking, resulting in centralization and further
staff reductions. Further, U. S. Bank of Oregon recently announced that it has
signed a letter of intent to outsource U. S. Bank of Oregon's merchant bank
services, resulting in enhanced service capabilities along with further cost
containment. Other consolidations involving Heart Federal Savings and Loan
Association and U. S. Bank of Southwest Washington are described below in "Other
Banking Subsidiaries."

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COMMERCIAL BANKING

U. S. Bank of Oregon and U. S. Bank of Washington

U. S. Bank of Oregon and U. S. Bank of Washington provide full-service
commercial and consumer banking and a wide range of trust services to
individuals, businesses and governmental entities throughout their respective
states of operation and, to a lesser extent, in other areas of the United States
and abroad. At December 31, 1994, U. S. Bank of Oregon had banking locations
throughout the state of Oregon, including 172 full-service branches and other
banking facilities, and several consumer service centers and commercial banking
centers. Also at that date, U. S. Bank of Oregon had total consolidated assets
of $11.3 billion, total deposits of $7.4 billion and total loans of $8.1
billion. U. S. Bank of Washington had, at December 31, 1994, banking locations
in 84 cities and towns throughout the state of Washington, including 164
full-service branches and other banking facilities. At December 31, 1994, U. S.
Bank of Washington had total consolidated assets of $6.6 billion, total deposits
of $4.9 billion and total loans of $5.0 billion.

COMMERCIAL ACTIVITIES. U. S. Bank of Oregon and U. S. Bank of Washington
provide banking services to commercial customers in business and industry,
including customers in forest products, aerospace, electronic manufacturing, and
agriculture (four of the Pacific Northwest's major industries), wholesale and
retail trade, finance, fishing, transportation, general construction, and a wide
range of other personal and business service industries. The services provided
include loans; mortgage and interim construction financing on residential,
industrial and commercial properties; inventory financing; equipment leasing;
acceptance financing; commodity loans and other specialized types of credit; and
cash management services, including computerized balance and deposit reporting.
U. S. Bank of Oregon and U. S. Bank of Washington also purchase installment
obligations from retailers with or without recourse. Additionally, U. S. Bank of
Oregon and U. S. Bank of Washington maintain financial relationships with
numerous companies based outside the Pacific Northwest, providing lines of
credit and other financial services.

CONSUMER ACTIVITIES. U. S. Bank of Oregon and U. S. Bank of Washington
provide financial services to individual customers throughout Oregon and
Washington as well as, to a more limited extent, in certain other western
states. These services include accepting checking, savings, and other time
deposits, and the making of loans. The loan services offered by U. S. Bank of
Oregon and U. S. Bank of Washington include real property loans (including for
home improvements), extensions of credit for purchases of automobiles and other
consumer goods and services, and individual lines of credit, both unsecured and
secured. In addition, U. S. Bank of Oregon and U. S. Bank of Washington
customers may have access to U. S. Bancorp's automated teller machine ("ATM")
system ("U-BANK-Registered Trademark-"), which is the tenth largest in the
United States, with 1,200 ATMs located throughout U. S. Bancorp's banking
region. U. S. Bancorp banks have issued approximately 1.1 million
U-BANK-Registered Trademark- cards, including 600,000 debit cards for customers
with checking accounts. A major purchase revolving line of credit secured by
real estate is also available from either bank.

INTERNATIONAL BANKING ACTIVITIES. U. S. Bank of Oregon international
operations include import-export transaction financing, letters of credit,
collections, remittance services, and foreign exchange services.

U. S. Bank of Oregon's International Banking Division finances trade
transactions, primarily through Oregon ports, and maintains correspondent
accounts with 52 banks in 23 foreign countries. Fifty-three (53) banks in 21
foreign countries maintain accounts with the International Banking Division.
These correspondent relationships facilitate loans, letters of credit,
acceptances, collections and exchange services abroad. U. S. Bank of Oregon's
Investment Division engages in money market loans to United States offices of
foreign banks, with terms not normally exceeding 90 days.

At December 31, 1994, foreign loans outstanding with respect to U. S. Bank
of Oregon totaled approximately $20.3 million. In addition, there were
outstanding banker's acceptances in Mexico totaling $30.1 million, representing
in part a participation in a syndicated accommodation to PEMEX, the Mexican
national oil company, which matures in May 1996.

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U. S. Bank of Washington provides international services through its
International Banking Division primarily for the benefit of existing customers.
Such services include import-export transaction financing, letters of credit,
collections, and remittance services. Foreign exchange services also are offered
through U. S. Bank of Washington.

U. S. Bank of Washington does not have direct overseas representation,
either through representatives or foreign branch offices. However, numerous
correspondent and agency arrangements are maintained with banks throughout the
world with special emphasis on banks located in Pacific Rim countries. At
December 31, 1994, U. S. Bank of Washington maintained correspondent accounts
with 28 banks in 17 foreign countries, while 21 banks in 10 foreign countries
maintained accounts with the International Banking Division. Foreign loans
outstanding at December 31, 1994, totaled approximately $29.5 million.

TRUST ACTIVITIES. U. S. Bank of Oregon and U. S. Bank of Washington offer a
wide range of fiduciary services for individuals and corporations. Each bank
acts as executor under wills, as trustee under trusts and pension and profit
sharing plans, as conservator for estates of minors and incompetents and as
investment adviser to individuals, businesses and others. Trust assets managed
at December 31, 1994, by U. S. Bank of Oregon totaled over $2.98 billion and by
U. S. Bank of Washington totaled approximately $2.18 billion.

COMPETITION. U. S. Bank of Oregon and U. S. Bank of Washington compete for
deposits, loans, trust accounts, and in providing other financial services with
independent, locally controlled banks, branches of foreign banks, and banks
which are subsidiaries of bank holding companies based outside the Pacific
Northwest. U. S. Bank of Oregon and U. S. Bank of Washington also compete
actively with savings and loan associations, savings banks, credit unions, small
local and national personal loan companies, local and national insurance
companies, local and national finance companies and other institutions such as
brokerage houses and financial units of out-of-state bank holding companies. All
of these entities are actively engaged in marketing various types of loans and
other financial services. Quality of service to customers, price of products,
range of products and services and ease of accessibility to facilities are among
the principal methods of meeting competition in the banking and financial
service industries. U. S. Bancorp emphasizes responsive service of high quality
and value throughout the organization.

Other Banking Subsidiaries

U. S. Bancorp's other banking subsidiaries (including its savings
association subsidiary) at December 31, 1994, were U. S. Bank of California, U.
S. Bank of Idaho, National Association, U. S. Bank of Nevada, First State Bank
of Oregon, Heart Federal Savings and Loan Association, U. S. Bank of Southwest
Washington, U. S. Savings Bank of Washington, U. S. Bank, National Association,
and U. S. Bank (Canada), which had aggregate deposits of $2.9 billion and
aggregate loans of $2.5 billion at that date. The activity of each of these
subsidiaries was not material to U. S. Bancorp's operations as a whole during
1994. The largest of the banking subsidiaries listed above in terms of total
assets and deposits are U. S. Bank of California and U. S. Bank of Nevada.

U. S. Bank of California is headquartered in Sacramento, California and
provides full-service commercial, consumer and trust banking services to
individuals, businesses and governmental entities in its 30-county market area
of northern California. At December 31, 1994, U. S. Bank of California had 65
full-service banking offices located in 51 California communities, a commercial
banking center located in Sacramento, a real estate loan center located near
Sacramento, and other banking facilities. Also at that date, the state-chartered
bank had total assets of $2.0 billion, total deposits of $1.6 billion, and total
loans of $1.2 billion. U. S. Bank of California was the eleventh largest
commercial bank in California in terms of deposits at June 30, 1994.

U. S. Bank of Nevada also provides full-service commercial, consumer and
trust banking services. At December 31, 1994, U. S. Bank of Nevada had banking
locations in 11 communities, including 29 full-service branches. Also at that
date, the state-chartered bank had total assets of $.9 billion, total deposits
of $.8 billion, and total loans of $.4 billion. The bank was the third largest
full-service commercial bank in Nevada at December 31, 1994.

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In February 1995, U. S. Bancorp received regulatory approval to merge Heart
Federal Savings and Loan Association into U. S. Bank of California, and the
merger was consummated in late February 1995. In addition, U. S. Bancorp has
recently received approval from Canadian banking regulators to proceed towards
closure of U. S. Bank (Canada).

U. S. Bancorp has recently received state and federal regulatory approval to
merge U. S. Bank of Southwest Washington with and into First State Bank of
Oregon. The merger is anticipated to be completed by March 31, 1995.

NONBANK SUBSIDIARIES

U. S. Bancorp's nonbank subsidiaries, including subsidiaries of banks,
totaled 38 companies at December 31, 1994. These subsidiaries operate in the
fields of commercial and consumer lending, insurance services, equipment
leasing, investment advisory services and discount brokerage, among others.
Among U. S. Bancorp's nonbank subsidiaries are the following:

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Company Office Locations
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Qualivest Capital Management, Inc. California, Oregon, Washington
U. S. Bancorp Securities California, Idaho, Nevada, Oregon, Washington
U. S. Bancorp Insurance Agency, Inc. Oregon
U. S. Bancorp Leasing and Financial 52 offices in 26 states
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EMPLOYEES

As of December 31, 1994, U. S. Bancorp and its subsidiaries had
approximately 10,610 full-time equivalent employees.

A number of benefit programs are provided to all eligible employees,
including officers, of U. S. Bancorp and its majority-owned subsidiaries,
including: retirement and 401(k) plans, medical, dental and long-term disability
plans, life insurance, accidental death and dismemberment insurance, a travel
accident plan, paid vacations and a sick leave program.

MONETARY POLICIES

The growth of U. S. Bancorp and its subsidiaries is affected by both the
prevailing economic environment and the fiscal and monetary policies of branches
and agencies of the U. S. Government. The Board of Governors of the Federal
Reserve System (the "Federal Reserve Board") directly influences corporate
performance through management of such factors as the reserves required of
financial institutions, the growth and contraction of the nation's money supply,
and interest rates paid by banks in their borrowings from and through the
Federal Reserve System. The Federal Reserve Board carries additional regulatory
authority over member banks and holding company activities. These powers allow
federal authorities substantial control of financial activity in general and
also of the operations of financial institutions. Monetary policies of the
Federal Reserve Board have had and will continue to have a significant effect on
the operating results of financial institutions.

SUPERVISION AND REGULATION

U. S. BANCORP. U. S. Bancorp, as a bank holding company, is subject to
regulation under the Bank Holding Company Act of 1956, as amended (the "Act"),
and is registered with the Federal Reserve Board. U. S. Bancorp is required by
the Act to file reports of its operations with the Federal Reserve Board and is
subject to inspection by the Federal Reserve Board. The Federal Reserve Board
has authority to issue cease and desist orders against holding companies and
their nonbank subsidiaries where the action of either of them constitutes a
serious threat to the safety, soundness or stability of a subsidiary bank and to
pursue criminal penalties for willful violations and civil penalties for
violations under the Act.

The Act and the Federal Reserve Board's regulations pursuant thereto require
every bank holding company to obtain the prior approval of the Federal Reserve
Board before merging with any bank holding company or acquiring substantially
all the assets of any bank, or direct or indirect ownership or control of more

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than 5 percent of the voting shares of any bank or bank holding company. The Act
provides that the Federal Reserve Board shall not approve any acquisition or
merger which would result in a monopoly, or which would be in furtherance of any
attempt to monopolize the business of banking in any part of the United States,
or any other proposed acquisition or merger, the effect of which may be
substantially to lessen competition or to tend to create a monopoly in any
section of the country or which in any other manner would be in restraint of
trade, unless the anti-competitive effects of the proposed transaction are
clearly outweighed in the public interest by the probable effect of the
transaction in meeting the convenience and needs of the community to be served.
In reviewing applications, the Federal Reserve Board analyzes the financial and
managerial resources and future prospects of the companies and banks involved
and the convenience and needs of the community to be served.

The Act also prohibits a bank holding company, with certain exceptions, from
engaging in or acquiring direct or indirect control of more than 5 percent of
the voting shares of any company engaged in nonbanking activities. The Federal
Reserve Board is authorized to approve, among other things, the ownership of
shares by a bank holding company in any company the activities of which the
Federal Reserve Board has determined to be so closely related to banking or
managing or controlling banks as to be a proper incident thereto. In making such
determination, the Federal Reserve Board is required to weigh the expected
benefits to the public, such as greater convenience, increased competition or
gains in efficiency, against the risks of possible adverse effects, such as
undue concentration of resources, decreased or unfair competition, conflicts of
interest, or unsound banking practices.

With a limited exception for acquisitions of financially troubled banks, the
Act prohibits the acquisition by a bank holding company of substantially all the
assets or more than 5 percent of the voting shares of a bank located outside the
state in which the operations of its banking subsidiaries were principally
conducted at the time it became a bank holding company, unless such an
acquisition is specifically authorized by a statute of the state in which the
bank to be acquired is located. Numerous states, including California, Oregon,
and Washington, have enacted legislation that authorizes bank holding companies
located in all or designated states to acquire banks in the enacting states.

In 1994, Congress enacted the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 (the "Interstate Banking Act"), which allows adequately
capitalized and managed bank holding companies to acquire and operate banks
across state lines beginning in 1997. Pursuant to the Interstate Banking Act,
commencing in September 1995, bank holding companies which meet specified
capital and management adequacy standards will be eligible to acquire banks in
other than their home states, but will need to retain a separate bank charter in
each state where subsidiaries conduct banking business. Various restrictions on
interstate acquisitions will continue to apply, including (1) federal and state
antitrust laws, as currently in effect; (2) prohibitions on a single holding
company system accounting for more than 10% of all deposits nationwide or,
subject to various opt-in and opt-out provisions for individual states on a
nondiscriminatory basis, accounting for 30% or more of deposits in any state;
(3) state-imposed prohibitions on acquiring banks within up to five years after
they commence operations; and (4) compliance by the acquirer with the Community
Reinvestment Act of 1977, as amended (the "CRA") and fair lending laws.

Commencing on June 1, 1997, banks will be permitted to cross state lines to
merge with other banks, subject to individual states' adoption of various
nondiscriminatory opt-in and opt-out provisions. Antitrust and anticoncentration
restrictions will apply as described above. It will not be necessary to keep
multiple state charters in effect or to have a holding company system.
Generally, all banks that are parties to a proposed post-1997 merger must
satisfy applicable CRA, management quality and capital adequacy standards.

U. S. Bancorp's management is considering the alternatives available for
operation of its banking subsidiaries under the Interstate Banking Act.
Theoretically, if none of the states in which U. S. Bancorp's banking
subsidiaries are located opt out, U. S. Bancorp's domestic banking subsidiaries
could all be organized and operated as a single banking institution.

U. S. Bancorp, its banking subsidiaries, and its nonbanking subsidiaries are
affiliates of U. S. Bank of Oregon, U. S. Bank of Washington and U. S. Bancorp's
other national banking subsidiaries within the meaning of the Federal Reserve
Act. The Federal Reserve Act, the Federal Deposit Insurance Act, and the Home
Owners' Loan Act impose certain restrictions on loans by U. S. Bancorp's banking
subsidiaries to U. S. Bancorp

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or certain nonbank affiliates, on purchases of certain assets by U. S. Bancorp's
banking subsidiaries from U. S. Bancorp or certain nonbank affiliates, on
investments by U. S. Bancorp's banking subsidiaries in their stock or securities
and on U. S. Bancorp's banking subsidiaries taking such stock and securities as
collateral for loans. U. S. Bancorp and its subsidiaries, as affiliates of U. S.
Bancorp's national banking subsidiaries, are also subject to certain
restrictions with respect to engaging in the issue, flotation, underwriting,
public sale and distribution of securities. Under Section 106 of the 1970
amendments to the Act and the regulations of the Federal Reserve Board, a bank
holding company and its subsidiaries are prohibited from engaging in certain
tie-in arrangements in connection with any extension of credit or provision of
any property or service.

BANKING SUBSIDIARIES. There are various requirements and restrictions
affecting U. S. Bank of Oregon, U. S. Bank of Washington and U. S. Bancorp's
other banking subsidiaries, including the requirement to maintain reserves
against deposits, restrictions on the nature and amount of loans, and
restrictions relating to investments, branching and other activities of the
banks. U. S. Bancorp's national banking subsidiaries are subject to regulation
by the Office of the Comptroller of the Currency (the "Comptroller"), the
Federal Reserve Board and the Federal Deposit Insurance Corporation (the
"FDIC"), and are examined by the Comptroller, which is the primary supervisory
authority for national banks.

Each of U. S. Bancorp's national banking subsidiaries can initiate dividend
payments in a given year, without the prior approval of the Comptroller, in
amounts equal to net profits (as defined by regulation) for that year combined
with its retained net profits for the preceding two calendar years, less any
required transfers to surplus or a fund for the retirement of any preferred
stock. In addition, a national bank may not pay a dividend in an amount greater
than its net profits then on hand after deducting statutory bad debt in excess
of the bank's allowance for loan losses. The payment of dividends by U. S.
Bancorp's national bank subsidiaries may also be affected by other factors, such
as requirements for the maintenance of adequate capital. In addition, federal
bank regulatory agencies have issued policy statements which provide that
national banks, banks that are members of the Federal Reserve System, and bank
holding companies should generally pay dividends only out of current operating
earnings.

Other banking subsidiaries of U. S. Bancorp may be subject to regulation by
the appropriate state regulatory agency, the Federal Reserve Board, or the FDIC.
Until its closure, U. S. Bank (Canada) is subject to regulation by the
Superintendent of Financial Institutions in Canada.

The federal banking laws contain a "cross-guarantee" provision which could
result in U. S. Bancorp or one of the insured depository institutions which it
owns being assessed for losses incurred by the FDIC in connection with
assistance provided to, or the failure of, any other depository institution
owned by U. S. Bancorp.

The FDIC Improvement Act of 1991 authorized the imposition of stricter
capital requirements on banks. If a bank is undercapitalized, the bank will be
required to develop and submit a plan for the restoration of its capital. If the
bank's efforts to restore capital are inadequate, the parent holding company, if
any, may be required to contribute additional capital to the bank, up to the
lesser of the full amount needed to bring the bank's capital level into
compliance or 5% of the holding company's total assets. Each federal banking
agency is also required to promulgate regulations and specify standards in
numerous areas of bank operations, addressing such issues as internal control
and audit systems, loan documentation, credit underwriting, interest rate risk,
asset growth, executive officer and director compensation, asset quality, and
other operational and managerial standards. These regulatory requirements have
increased and may continue to increase the cost of, and the regulatory burden
associated with, the banking business.

U. S. Bancorp's bank subsidiaries pay assessments on their domestic deposits
to the FDIC's Bank Insurance Fund. In addition, two of U. S. Bancorp's financial
institutions pay assessments on some or all of their deposits at rates imposed
for members of the Savings Association Insurance Fund.

Under FDIC regulations, the assessment rate for an insured depository
institution varies according to the level of risk incurred in its activities. An
institution's risk category is based upon whether the institution is well
capitalized, adequately capitalized or less than adequately capitalized. Each
insured depository institution is also assigned to one of the following
"supervisory subgroups": Subgroup A, B or C. Subgroup A includes

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financially sound institutions with few minor weaknesses; Subgroup B
institutions demonstrate weaknesses which, if not corrected, could result in
significant deterioration; and Subgroup C includes institutions for which there
is a substantial probability that the FDIC will suffer a loss in connection with
the institution unless effective action is taken to correct the areas of
weakness. Based on its capital and supervisory subgroups, each insured
institution is assigned an annual FDIC assessment rate varying between 0.23% per
annum (for well capitalized Subgroup A institutions) and 0.31% (for
undercapitalized Subgroup C institutions). In February 1995, the FDIC published
proposed rules which would, if adopted, cause a significant reduction in
assessment rates for members of the Bank Insurance Fund.

U. S. Bancorp and its banking subsidiaries are subject to the CRA, which is
aimed particularly at encouraging financial institutions to give special
attention to the needs of low and moderate income areas in meeting the credit
needs of the communities in which they operate. If the regulatory evaluation of
a banking subsidiary's CRA activities is less than satisfactory, regulatory
approval of the bank's or a related entity's proposed acquisitions, branch
openings, expansion of activities related to banking, or other applications
requiring Federal Reserve Board approval may be delayed until the bank's CRA
performance is deemed satisfactory by the appropriate bank regulatory agency. U.
S. Bancorp's banking subsidiaries that are subject to the CRA each have
regulatory evaluations of satisfactory or better. U. S. Bank of Oregon and U. S.
Bank of Washington each received regulatory evaluations of outstanding in 1994.

Activities of U. S. Bancorp and its banking subsidiaries in other countries
are also subject to restrictions imposed by the laws and banking authorities of
such countries and the Federal Reserve Board.

The foregoing references to applicable statutes and regulations are brief
summaries thereof which do not purport to be complete and which are qualified in
their entirety by reference to such statutes and regulations.

The information included under the heading "Capital and Dividends" on page
32 of this report is incorporated herein by reference.

OTHER SUBSIDIARIES. Non-bank subsidiaries of U. S. Bancorp in the states of
Oregon, Washington, California, Idaho, and Nevada and other jurisdictions are
subject to the supervision and inspection of various federal and/or state
regulatory agencies.

ITEM 2. PROPERTIES

The headquarters of U. S. Bancorp and U. S. Bank of Oregon is located in
downtown Portland, Oregon, in the U. S. Bancorp Tower, which was completed in
June 1983. The Tower contains approximately 751,600 rentable square feet of
space and was, as of December 31, 1994, 86 percent committed for occupancy
including the approximately 244,000 square feet utilized by U. S. Bancorp and
its subsidiaries.

U. S. Bancorp or U. S. Bank of Oregon own six additional buildings located
in the Portland metropolitan area, including U. S. Bancorp's operations center,
nine miles east of downtown Portland. The operations facility, with
approximately 360,000 square feet of space, houses U. S. Bancorp's information
services/data processing functions, as well as most bank operations and
processing functions.

U. S. Bank of Oregon owned, at December 31, 1994, the land and buildings
which house 90 of its full-service branch offices and one banking facility.
Fifty-eight (58) branches were operated in leased facilities, while 24 branches
were operated in U. S. Bank of Oregon buildings on leased land. Twenty-six of
the leased branches occupied premises covered by a series of separate leases
with a single lessor, each lease expiring in the year 2002. Other U. S. Bank of
Oregon and U. S. Bancorp subsidiary units occupy leased space in various
buildings throughout Oregon.

U. S. Bank of Washington owned, at December 31, 1994, the land and buildings
which house 71 of its full-service branch offices and one banking facility,
while 71 of its full service branches were operated in leased facilities and 22
branches were operated in U. S. Bank of Washington buildings on leased land.
Also at that date, U. S. Bank of Washington owned a 19-story,
227,200-square-foot office building in Seattle, Washington, which housed its
headquarters for a portion of 1994; negotiations for the sale of this facility
are under way. During 1994, U. S. Bank of Washington relocated to new
headquarters in the U. S. Bank Centre, a facility in which U. S. Bank of
Washington and its affiliates lease approximately 179,300 square feet.

7
<PAGE>
U. S. Bank of California owned, at December 31, 1994, the land and buildings
which house 47 of its full-service branch offices. Fifteen branches and one
banking facility were operated in leased facilities. Also at that date, U. S.
Bank of California leased a 65,250-square-foot office building in Auburn,
California, as well as a 67,600-square-foot office building in Sacramento,
California which houses its headquarters, and operated six branches in U. S.
Bank of California buildings on leased land.

U. S. Bank of Nevada owned, at December 31, 1994, the land and buildings
which house ten of its full-service branch offices. Fifteen branches and three
banking facilities were operated in leased facilities, while one branch operated
in a U. S. Bank of Nevada building on leased land. U. S. Bancorp purchased an
office building in Reno in July 1993. This facility includes a 6-story office
building with approximately 78,350 rentable square feet of space and two stories
of parking below the building.

U. S. Bank of Idaho owned at December 31, 1994, the land and buildings which
house five of its domestic full-service branch offices, while six branches were
operated in leased facilities.

ITEM 3. LEGAL PROCEEDINGS

There were no legal proceedings requiring disclosure pursuant to this item
pending at December 31, 1994, or at the date of this report.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of the shareholders of U. S. Bancorp's
common stock during the fourth quarter of 1994.

EXECUTIVE OFFICERS OF THE REGISTRANT

All officers of the registrant are elected or appointed by the board of
directors to hold their offices during the pleasure of the board. At February
16, 1995, the executive officers of U. S. Bancorp were as follows:

<TABLE>
<CAPTION>
Has Served as First
Age at Executive Officer Joined
Name 12/31/94 Position of U. S. Bancorp Since U. S. Bancorp
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gerry B. Cameron* 56 Director, Chairman of the Board, Mar. 1979 1956
Chief Executive Officer and
President, U. S. Bancorp; Director
and Chairman of the Board, U. S.
Bank of Oregon; Director and
Executive Vice President, U. S.
Bank of Washington
Phyllis J. Campbell* 43 Director, President and Chief Nov. 1989 1987
Executive Officer, U. S. Bank of
Washington; Executive Vice
President, U. S. Bancorp and U. S.
Bank of Oregon
Thomas P. Ducharme 43 Executive Vice President and June 1994 1994
Treasurer, U. S. Bancorp;
Executive Vice President, U. S.
Bank of Oregon and U. S. Bank of
Washington
Gary T. Duim* 49 Executive Vice President, U. S. Jan. 1993 1987
Bancorp, U. S. Bank of Oregon and
U. S. Bank of Washington
</TABLE>

8
<PAGE>
<TABLE>
<CAPTION>
Has Served as First
Age at Executive Officer Joined
Name 12/31/94 Position of U. S. Bancorp Since U. S. Bancorp
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Steven P. Erwin 51 Executive Vice President and Chief July 1994 1994
Financial Officer, U. S. Bancorp;
Executive Vice President, U. S.
Bank of Oregon and U. S. Bank of
Washington
John D. Eskildsen* 57 Director, President and Chief July 1989 1959
Executive Officer, U. S. Bank of
Oregon; Executive Vice President,
U. S. Bancorp and U. S. Bank of
Washington
Robert D. Geddes 56 Executive Vice President, U. S. Dec. 1987 1974
Bancorp, U. S. Bank of Oregon and
U. S. Bank of Washington
Arland D. Hatfield* 59 Executive Vice President, U. S. July 1989 1987
Bancorp, U. S. Bank of Oregon and
U. S. Bank of Washington
Charles C. Langer 47 President, U. S. Bancorp Leasing & May 1991 1964
Financial
Judith L. Rice* 47 Executive Vice President, U. S. May 1990 1973
Bancorp, U. S. Bank of Oregon and
U. S. Bank of Washington
Lamoine Saunders 53 Executive Vice President, U. S. July 1994 1994
Bancorp, U. S. Bank of Oregon and
U. S. Bank of Washington
Robert D. Sznewajs* 48 Executive Vice President, U. S. April 1994 1994
Bancorp, U. S. Bank of Oregon and
U. S. Bank of Washington
<FN>
- ------------------------
* Member of U. S. Bancorp Executive Management Committee composed of 7 senior
U. S. Bancorp executive officers.
There are no family relationships among any of the above listed persons.
The principal occupations and employment of each of the above persons during
the past five years were as follows:
(a) Mr. Cameron was elected Chief Executive Officer of U. S. Bancorp in January
1994 and Chairman of the Board and President in April 1994. He was Vice
Chairman of U. S. Bancorp from January 1993 until April 1994, and served as
Executive Vice President of U. S. Bank of Oregon from March 1979 until July
1993. Mr. Cameron was elected a director of U. S. Bank of Oregon in January
1993 and was elected Chairman of the Board in July 1993. Mr. Cameron was
elected a director of U. S. Bank of Washington in February 1988, and
currently also serves as Executive Vice President. He was President and
Chief Executive Officer of U. S. Bank of Washington from October 1991 and
Executive Vice President of U. S. Bancorp from March 1979 until January
1993, and was President and Chief Operating Officer of U. S. Bank of
Washington from February 1988 until October 1991.
</TABLE>

9
<PAGE>
<TABLE>
<S> <C>
(b) Since January 1993, Ms. Campbell has been a director, President and Chief
Executive Officer of U. S. Bank of Washington and Executive Vice President
of U. S. Bancorp and U. S. Bank of Oregon. Ms. Campbell was Senior Vice
President and Area Manager for all eastern U. S. Bank of Washington branches
from February 1989 until November 1989, when she became Executive Vice
President and Manager of the Distribution Group of U. S. Bank of Washington.
Prior to 1989, Ms. Campbell was Vice President and Manager of all Spokane
branches of U. S. Bank of Washington.
(c) Mr. Ducharme has been Executive Vice President and Treasurer of U. S.
Bancorp since June 1994. He also serves as Executive Vice President of U. S.
Bank of Oregon and U. S. Bank of Washington. Previously, Mr. Ducharme
provided personal investment and financial advice and services as an asset
management and financial consultant. From 1988 through 1993, Mr. Ducharme
was Executive Vice President and Treasurer of Valley National Bank in
Phoenix, Arizona.
(d) Mr. Duim became Executive Vice President of U. S. Bancorp in charge of its
U. S. Corporate Banking Group and Executive Vice President of U. S. Bank of
Oregon in January 1993. He has also been Executive Vice President of U. S.
Bank of Washington since 1988, and previously managed its Commercial
Services Group.
(e) Mr. Erwin has been Executive Vice President and Chief Financial Officer of
U. S. Bancorp, and Executive Vice President of U. S. Bank of Oregon and U.
S. Bank of Washington, since July 1994. Mr. Erwin served as Treasurer of
BayBanks, Inc. in Boston, Massachusetts from 1987 until 1994.
(f) Mr. Eskildsen became a director and President and Chief Executive Officer of
U. S. Bank of Oregon in January 1993. For more than five years prior to
1993, he was Executive Vice President of U. S. Bank of Oregon and managed
its Commercial Services Group. Mr. Eskildsen became Executive Vice President
of U. S. Bancorp and U. S. Bank of Washington in April 1992.
(g) Mr. Geddes has been Executive Vice President and Corporate Counsel of U. S.
Bancorp and U. S. Bank of Oregon since December 1987. Mr. Geddes has been
Secretary and Corporate Counsel of U. S. Bank of Washington since July 1989
and Executive Vice President of U. S. Bank of Washington since April 1993.
Mr. Geddes is also Manager of the Community, Government and Legal Affairs
Group.
(h) Mr. Hatfield has been Executive Vice President of U. S. Bancorp and U. S.
Bank of Oregon since October 1991 and has headed the Credit Administration
and Policy Group of U. S. Bancorp since October 1992. Since 1988, Mr.
Hatfield has been Executive Vice President and Chief Credit Officer of U. S.
Bank of Washington.
(i) Mr. Langer has been President of U. S. Bancorp Leasing and Financial since
January 1989. Prior to that date he was Executive Vice President and Manager
of U. S. Bancorp Leasing and Financial.
(j) Ms. Rice has been Executive Vice President of U. S. Bancorp, U. S. Bank of
Oregon and U. S. Bank of Washington and Manager of the Human Resources Group
since May 1990. She was employed by U. S. Bancorp from 1973 until 1979. She
then served in various capacities with Boise Cascade Corporation's Paper
Group until January 1988. Ms. Rice rejoined U. S. Bancorp in February 1988
and was Vice President and Manager of Human Resources Planning and
Development until May 1990.
(k) Mr. Saunders has been Executive Vice President of U. S. Bancorp heading the
systems and operations areas since August 1994. He also serves as Executive
Vice President of U. S. Bank of Oregon and U. S. Bank of Washington. Mr.
Saunders served as Chief Operations Officer of Valley National Bank of
Arizona in Phoenix, Arizona from 1983 until 1992. From 1992 through 1993,
Mr. Saunders served as President of BancStar, Inc. From 1993 until 1994, Mr.
Saunders served as National Operations Manager for BancOne Corporation.
(l) Mr. Sznewajs has been Executive Vice President of U. S. Bancorp in charge of
the Support and Financial Services and Products Group since April 1994.
Since that time he has also served as Executive Vice President of U. S. Bank
of Oregon and U. S. Bank of Washington. From 1989 until 1993, Mr. Sznewajs
was Executive Vice President and Manager of Retail Banking for Valley
National Bank of Arizona in Phoenix, Arizona. In early 1993, Mr. Sznewajs
became Chairman of Bank of America, N.A., the credit card bank of
BankAmerica Corporation.
</TABLE>

10
<PAGE>
PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCK-HOLDER MATTERS

U. S. Bancorp's common stock is traded in The Nasdaq Stock Market under the
symbol USBC. At December 31, 1994, 34 independent brokerage firms maintained a
primary market in U. S. Bancorp's common stock. Also at that date, there were
15,473 shareholders of record of U. S. Bancorp's common stock. Approximately 70%
of those shareholders live in Oregon or Washington while approximately 25% of
the total shares issued and outstanding are owned by Oregon and Washington
residents. The following table presents the interday high and low sales prices
of U.S. Bancorp's common stock for each quarterly period for the last two years
as reported by Nasdaq:

The following table presents quarterly cash dividends declared information
for the two-year period 1994-1993:

<TABLE>
<CAPTION>
1994 1993
------------------------- -------------------------
4 3 2 1 4 3 2 1
---- --- --- --- ---- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dividends Declared............... $.25 .25 .22 .22 $.22 .22 .22 .19
</TABLE>

U. S. Bancorp's common dividend payout ratio for each of its last three
fiscal years was as follows:
1994 -- 67.1%; 1993 -- 34.4%; and 1992 -- 52.4%. U. S. Bancorp's common dividend
payout ratio for 1994, excluding the after-tax impact of the $100 million
restructuring charge, was 45.2%. The common dividend payout ratio for 1992,
before the cumulative effect of accounting changes, was 37.1%.

Reference should be made to Item 1 of this report on page 6 and Note 3 to
the Consolidated Financial Statements on page 47 for a description of
restrictions on the ability of U. S. Bancorp's national banking subsidiaries to
pay dividends to U. S. Bancorp.

11
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA

The following selected financial data should be read in conjunction with U.
S. Bancorp's Consolidated Financial Statements and the accompanying notes
presented elsewhere herein.

<TABLE>
<CAPTION>
Percent
Increase
(Decrease)
Year Ended December 31 1994 1993 1994 Over 1993 1992(1) 1991 1990
- -------------------------------------------------------------- ------- ------- --------------- ------- ------- -------
(Dollars in Millions, Except Per Share)
<S> <C> <C> <C> <C> <C> <C>
EARNINGS
Net interest income (TE)...................................... $ 995.1 $ 963.0 3% $ 896.6 $ 814.3 $ 736.3
Net interest income........................................... 962.2 928.1 4 860.4 769.3 690.2
Provision for credit losses................................... 106.9 92.9 15 134.5 125.4 103.6
Noninterest revenues.......................................... 456.1 531.8 (14) 443.5 375.3 299.0
Restructuring charge.......................................... 100.0 -- N/M -- -- --
Other noninterest expenses.................................... 995.3 982.8 1 868.8 743.8 619.8
------- ------- ------- ------- -------
Total noninterest expenses.................................... 1,095.3 982.8 11 868.8 743.8 619.8
Income before cumulative effect of accounting changes......... 151.5 257.9 (41) 208.1 190.9 190.8
Cumulative effect of accounting changes....................... -- -- -- 59.9 -- --
Net income.................................................... 151.5 257.9 (41) 148.2 190.9 190.8
- ---------------------------------------------------------------------------------------------------------------------------------
PER COMMON SHARE
Income before accounting changes.............................. $ 1.40 $ 2.47 (43)% $ 2.05 $ 1.96 $ 1.99
Net income.................................................... 1.40 2.47 (43) 1.45 1.96 1.99
Book value.................................................... 16.58 16.77 (1) 14.95 14.32 13.09
Cash dividends declared....................................... .94 .85 11 .76 .71 .59
Average common shares outstanding (000's)..................... 99,448 99,327 98,650 97,640 96,008
- ---------------------------------------------------------------------------------------------------------------------------------
PERIOD-END BALANCES
Assets........................................................ $21,816 $21,415 2% $20,741 $18,875 $18,547
Interest-earning assets....................................... 19,105 18,951 1 18,264 16,661 16,317
Loans......................................................... 15,606 14,168 10 13,565 13,920 13,996
Deposits...................................................... 15,048 15,511 (3) 15,425 13,316 13,363
Long-term debt................................................ 995 1,052 (5) 1,329 1,214 666
Common shareholders' equity................................... 1,627 1,668 (2) 1,481 1,406 1,267
Preferred stock............................................... 150 150 -- 150 -- --
Full-time equivalent employees................................ 10,610 12,863 (18) 11,980 11,282 10,501
AVERAGE BALANCES
Assets........................................................ $21,126 $20,684 2% $19,487 $18,492 $18,327
Interest-earning assets....................................... 18,622 18,206 2 17,310 16,522 16,154
Loans......................................................... 14,728 13,645 8 13,722 13,949 13,170
Deposits...................................................... 15,184 15,289 (1) 13,920 13,079 12,837
Common shareholders' equity................................... 1,624 1,561 4 1,409 1,340 1,189
Preferred stock............................................... 150 150 -- 66 -- --
- ---------------------------------------------------------------------------------------------------------------------------------
FINANCIAL RATIOS
Return on average assets (2).................................. .72% 1.25% 1.07% 1.03% 1.04%
Return on average common equity (2)........................... 8.58 15.75 13.80 14.25 16.04
Overhead ratio................................................ 75.48 65.75 64.81 62.44 59.86
Net interest margin........................................... 5.35 5.29 5.18 4.93 4.56
Average total shareholders' equity to average assets.......... 8.40 8.27 7.57 7.25 6.49
Leverage ratio................................................ 7.69 7.65 7.16 6.84 5.92
Risk-based capital ratios:
Tier 1 capital ratio........................................ 8.19 8.76 8.54 7.56 6.67
Total capital ratio......................................... 11.03 11.73 11.54 9.83 9.64
Nonperforming assets as a % of loans and foreclosed assets.... 1.31 1.77 2.13 2.75 2.36
Allowance as a % of loans..................................... 1.96 1.91 1.91 1.65 1.45
Allowance as a % of nonperforming loans....................... 168 125 100 77 79
<FN>
- ------------------------------
(1) 1992 net income includes a $59.9 million after-tax charge from the
adoption of Statement of Financial Accounting Standards (SFAS) No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions"
and SFAS No. 112, "Employers' Accounting for Postemployment Benefits".
(2) Returns on average equity and assets for 1992 were computed before
accounting changes. After accounting changes, return on average assets was
.76% and return on average common equity was 10.14%.
N/M Not meaningful.
TE Tax-equivalent.
</TABLE>

12
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following discussion and analysis of financial condition and results of
operations should be read in conjunction with the consolidated financial
statements and accompanying notes appearing elsewhere in this report. When
necessary, reclassifications have been made to prior years' data throughout the
following discussion and analysis for purposes of comparability with the 1994
presentation. Each of the items referred to in this performance review is more
fully described in the following discussion or in the Notes to the Consolidated
Financial Statements presented on pages 44 through 69 of this report.

Performance Overview

In the first quarter of 1994, U. S. Bancorp announced a restructuring
program to aggressively improve the productivity and profitability of all of its
businesses. This announcement reflected the company's refocus on businesses in
its core market area of Oregon, Washington, northern California, Nevada and
Idaho, and on selected other businesses that meet its objective of sustaining
consistent, high-return financial performance. One important financial objective
of U. S. Bancorp's restructuring program was to improve productivity to achieve
an overhead ratio (noninterest expenses as a percentage of tax-equivalent net
interest income and noninterest revenues) of 59 percent within three years of
the start of the program.

For the year 1994, net income was $151.5 million, or $1.40 per common share,
compared with $257.9 million, or $2.47 per common share, for the year 1993.
However, there were a number of items that affected net income in 1994 and 1993.
A $100 million pretax charge was recorded in the first quarter of 1994,
reflecting the cost of implementing the restructuring program. In the third
quarter, U. S. Bancorp sold a substantial portion of its residential mortgage
operations, resulting in a pretax gain of $50.8 million. Certain asset
write-downs deemed necessary by management were also taken in the third quarter
and the ratio of the allowance to loans outstanding was increased at third
quarter end to 1.95 percent from 1.91 percent at December 31, 1993. The results
for 1993 included $74 million in pretax income from equity investments and
certain mortgage banking activities.

Quarterly earnings increased during 1994 as a result of the many actions
initiated in the first quarter and a strong economic environment in most of U.
S. Bancorp's markets. These initiatives included implementing cost reduction
plans and divesting or closing less profitable businesses. Highlights for 1994
included:

- Noninterest expenses declined substantially from an annualized run-rate of
$1.03 billion in the fourth quarter of 1993, to an annualized run-rate of
$904 million in the fourth quarter of 1994.

- Overhead ratio improved to 63.3 percent in the fourth quarter from 67.1
percent in the third quarter of 1994, and 74.6 percent in the first
quarter (excluding the restructure charge); the overhead ratio was 65.8
percent in 1993 and 75.5 percent in 1994 (including the restructuring
charge).

- Average loans grew 11 percent in the fourth quarter on an annualized basis
over the third quarter of 1994, and 10 percent as compared with the fourth
quarter a year ago.

- Credit quality improved as reflected by the decline in nonperforming
assets to total loans and foreclosed property from 1.77 percent at
year-end 1993 to 1.31 percent at year-end 1994. Annualized net charge-offs
were .51 percent in the fourth quarter of 1994 and .48 percent for the
year, compared with .60 percent for the year 1993.

To facilitate a better understanding of U. S. Bancorp's results of
operations, management believes an analysis that separates noncore businesses
and nonrecurring activities from ongoing activities provides for a more accurate
assessment of overall trends and operations. Accordingly, operating income as
used below and throughout this report is defined as income before the provision
for credit losses, other real estate owned (OREO) write-downs, equity investment
income and loss, gains and losses on sales of mortgage loan servicing rights,
net of accelerated intangibles amortization, gain on sale of operations and
loans, gains and losses on sales of securities, the restructuring charge, asset
write-downs and items determined by management to be nonrecurring.

Due to this format of presentation, not all individual line items agree
directly to the financial statements.

13
<PAGE>
RESULTS OF OPERATIONS

The table below presents the trend of operating income for the years 1994,
1993 and 1992.

Summary of Operations
Tax-Equivalent Basis
(In Millions)

<TABLE>
<CAPTION>
Percent Percent
1994 1993 Change 1992 Change
------- ------ ------ ------- ------
<S> <C> <C> <C> <C> <C>
Net interest income................................................................ $ 995.1 $963.0 3% $ 896.6 7%
Noninterest revenues............................................................... 417.6 448.3 (7) 426.0 5
Noninterest expenses............................................................... 963.9 980.5 (2) 839.9 17
------- ------ -------
Operating income................................................................... 448.8 430.8 4 482.7 (11)
Provision for credit losses........................................................ (106.9) (92.9) 15 (134.4) (31)
OREO write-downs................................................................... (2.4) (5.3) (55) (19.5) (73)
------- ------ -------
339.5 332.6 2 328.8 1
Equity investment income (loss).................................................... (5.4) 34.0 12.9
Gain on sale of operations and loans............................................... 62.9 9.3 5.0
Gain (loss) on sale of securities.................................................. (8.1) -- .4
Gain (loss) on sale of mortgage loan servicing rights, net of accelerated
intangibles amortization.......................................................... 1.3 40.2 (.8)
Nonrecurring noninterest revenue items............................................. (12.2) -- --
Restructuring charge............................................................... (100.0) -- --
Asset write-downs.................................................................. (18.4) (6.2) --
Nonrecurring noninterest expense items............................................. (10.6) 9.2 (9.4)
------- ------ -------
Income before income taxes......................................................... 249.0 419.1 336.9
Less tax-equivalent adjustment included above...................................... 32.9 34.9 36.3
Provision for income taxes......................................................... 64.6 126.3 92.5
------- ------ -------
Income before cumulative effect of accounting changes.............................. 151.5 257.9 (41) 208.1 24
Cumulative effect of accounting changes............................................ -- -- (59.9)
------- ------ -------
Net income......................................................................... $ 151.5 $257.9 (41)% $ 148.2 74%
------- ------ ------ ------- ------
------- ------ ------ ------- ------
</TABLE>

Operating income increased four percent in 1994 as compared with 1993. On a
quarterly basis, operating income rose steadily during the year. Operating
income increased from $87.1 million in the first quarter of 1994 to $129.7
million in the fourth quarter, a 49 percent increase.

- Net interest income in 1994 increased 3.3 percent over 1993, mainly the
result of growth in commercial and consumer loans. Average commercial
loans in 1994 increased 10 percent over 1993, and average consumer loans
increased 13 percent. The increase in the margin to 5.35 percent in 1994
from 5.29 percent in 1993 was primarily attributable to higher overall
asset yields and an increase in noninterest-bearing deposits.

- Excluding revenues associated with activities affected by divestitures and
other revenue items as specified in the noninterest revenue table on page
17, noninterest revenues increased five percent. Strong year-over-year
growth was achieved in service charges, up 13 percent, and insurance
revenues, up 49 percent. Total noninterest revenues declined in 1994 from
1993, mainly due to declines in revenues associated with divested
businesses. A significant portion of U. S. Bancorp's mortgage banking
subsidiary's loan origination offices and loan servicing portfolio was
sold in the third quarter of 1994. As a result of this sale, and an
overall decline in mortgage loan origination volumes due to rising
interest rates, mortgage banking income was down $27 million in 1994 as
compared with 1993. Credit reporting revenues from U. S. Bancorp's
subsidiary Credco, Inc. were $21 million lower in 1994 due to lower demand
for credit reports. In December 1994, U.S. Bancorp announced the signing
of a definitive agreement to sell Credco, Inc. The sale closed in January
1995.

14
<PAGE>
- Noninterest expenses in 1994, excluding the restructuring charge, asset
write-downs and items determined by management to be nonrecurring,
decreased two percent from 1993 levels reflecting the benefit of major
cost initiatives implemented at U. S. Bancorp during 1994. The most
significant cost reductions were achieved in employee compensation and
benefits due to a combination of attrition, a special retirement
opportunity and divestiture or closure of several business activities. The
number of full-time equivalent employees decreased 18 percent during the
year as a result of these actions.

Net Interest Income (tax-equivalent basis)

Net interest income, the principal source of U. S. Bancorp's operating
income, includes interest income and fees generated by interest-earning assets,
primarily loans and investment securities, less interest expense on
interest-bearing liabilities, primarily deposits, purchased funds and long-term
debt. Net interest income is affected by the volume, interest rates and relative
mix of both earning assets and interest-bearing and noninterest-bearing
liabilities.

Analysis of Net Interest Income (Tax-Equivalent Basis)

<TABLE>
<CAPTION>
Net
Interest Interest Interest
Income Expense Income
-------- -------- --------
(In Millions)
<S> <C> <C> <C>
1992 as reported........................................................... $1,528.2 $ 631.6 $ 896.6
1993 increase (decrease) due to:
Changes in balances...................................................... 75.4 10.2 65.1
Changes in rates......................................................... (132.4) (134.7) 2.4
One less day............................................................. (2.5) (1.4) (1.1)
-------- -------- --------
1993 as reported........................................................... 1,468.7 505.7 963.0
-------- -------- --------
1994 increase due to:
Changes in balances...................................................... 31.8 4.1 27.7
Changes in rates......................................................... 12.5 8.1 4.4
-------- -------- --------
1994 as reported........................................................... $1,513.0 $ 517.9 $ 995.1
-------- -------- --------
-------- -------- --------
</TABLE>

Net interest income was $995.1 million in 1994, up $32.1 million, or three
percent, from the prior year. This followed an increase of $66.4 million, or
seven percent, in 1993 compared with 1992. In 1994, the growth in net interest
income resulted primarily from the increase in earning assets and an increase in
the net interest margin.

Average earning assets in 1994 totaled $18.6 billion, an increase of $416
million, or two percent, from the prior year. This followed an increase of $896
million, or five percent, in 1993 from 1992. The increase in 1994 reflected the
growth in average loans, which rose $1.1 billion, or eight percent, over 1993.
Average commercial loans increased $618 million, or 10 percent, and average
consumer loans increased $392 million, or 13 percent, over the prior year. These
increases in average loans were partially offset by a $388 million decline in
average loans held for sale and a $205 million decrease in average investment
securities. The decline in loans held for sale was due to the sale of a
substantial portion of the mortgage loan origination offices of the mortgage
subsidiary in August 1994 and the decision by management to transfer $96.4
million of consumer loans held for sale during 1993 into the loan portfolio in
mid-1994.

Average interest-bearing liabilities in 1994 totaled $15.0 billion, an
increase of $121 million, or one percent, from the prior year. Average
interest-bearing deposits declined $347 million, or three percent, in 1994 as
increases in savings, interest-checking and money market accounts were offset by
a $583 million decrease in time deposits less than $100,000. Average short-term
borrowings, including federal funds purchased and security repurchase
agreements, increased $600 million in 1994 over the prior year.

15
<PAGE>
The net interest margin on interest-earning assets, which is the average
yield on interest-earning assets less the average rate paid for all sources of
funding, including the impact of interest-free funds, was 5.35 percent in 1994
compared with 5.29 and 5.18 percent in 1993 and 1992, respectively. The six
basis point increase in the net interest margin in 1994 over 1993 was primarily
due to an improvement in the earning asset yield, mainly related to higher
yields earned on variable rate commercial loans. The average cost of
interest-bearing liabilities increased five basis points as the cost of
short-term borrowings increased in 1994. The increase in the cost of
interest-bearing liabilities was offset by the impact of a higher proportion of
interest-earning assets supported by noninterest-bearing sources of funds in
1994.

Rate-Volume Analysis of Changes in Net Interest Income

The following table sets forth, on a tax-equivalent basis, a summary of the
changes in net interest income resulting from changes in volumes and rates.
Since changes in interest income and expense are calculated independently for
each line in the table, the totals in the volume and rate columns are not the
sum of the individual lines. Changes not due solely to volume or rate changes
are allocated to rate.

<TABLE>
<CAPTION>
1994 Versus 1993 1993 Versus 1992
------------------------------ ------------------------------
Increase (Decrease) Due to Increase (Decrease) Due to
Change in Change in
------------------------------ ------------------------------
Average Average Net Average Average Net
Volume Rate Change Volume Rate Change
--------- -------- --------- -------- --------- ---------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
INTEREST INCOME
Time deposits with other banks................................. $ 21 $ 36 $ 57 $ (730) $ (41) $ (771)
Federal funds sold and security resell agreements.............. (1,084) 4,231 3,147 (3,560) (2,116) (5,676)
Other short-term investments................................... (476) 116 (360) 74 (168) (94)
Interest on trading account securities......................... (1,153) 1,116 (37) 302 (1,103) (801)
Interest on loans held for sale................................ (27,104) 684 (26,420) 9,848 (7,424) 2,424
Interest on securities available for sale...................... 72,862 7,806 80,668 246 -- 246
Interest on securities held to maturity........................ (111,482) 2,977 (108,505) 71,731 (33,286) 38,445
Interest on loans.............................................. 88,049 7,753 95,802 (6,799) (86,463) (93,262)
--------- -------- --------- -------- --------- ---------
Total interest income...................................... 31,837 12,515 44,352 75,365 (134,854) (59,489)
--------- -------- --------- -------- --------- ---------
INTEREST EXPENSE
Interest on deposits
Savings accounts............................................. 2,134 (4,216) (2,082) 9,950 (13,476) (3,526)
NOW accounts and interest checking........................... 468 (5,661) (5,193) 6,338 (17,269) (10,931)
Money market accounts........................................ 2,878 10,861 13,739 12,923 (22,413) (9,490)
Time, $100 thousand or more.................................. 156 1,778 1,934 (16,730) (4,913) (21,643)
Other time................................................... (25,193) (4,802) (29,995) 2,152 (39,143) (36,991)
--------- -------- --------- -------- --------- ---------
Total...................................................... (10,784) (10,813) (21,597) 26,888 (109,469) (82,581)
--------- -------- --------- -------- --------- ---------
Interest on federal funds purchased and security repurchase
agreements.................................................... 17,577 24,546 42,123 (13,158) (10,846) (24,004)
Interest on commercial paper................................... 1,039 2,394 3,433 (1,717) (1,213) (2,930)
Interest on short-term
borrowings (1)................................................ (352) (1,141) (1,493) 1,465 (5,495) (4,030)
Interest on long-term debt..................................... (9,027) (1,097) (10,124) (5,086) (7,274) (12,360)
--------- -------- --------- -------- --------- ---------
Total interest expense..................................... 4,123 8,219 12,342 10,231 (136,136) (125,905)
--------- -------- --------- -------- --------- ---------
Change in net interest income.................................. $ 27,714 $ 4,296 $ 32,010 $ 65,134 $ 1,282 $ 66,416
--------- -------- --------- -------- --------- ---------
--------- -------- --------- -------- --------- ---------
<FN>
- ------------------------
(1) Includes interest capitalized on property under construction.
</TABLE>

16
<PAGE>
Noninterest Revenue

Excluding revenues associated with activities affected by divestiture and
other revenues identified in the table below, noninterest revenues increased in
1994 by five percent over 1993. The comparable noninterest revenues in 1993
increased 13 percent over 1992. The principal components of noninterest revenue
are shown in the table below.
<TABLE>
<CAPTION>
Change
-----------------
1994 1993 Amount Percent 1992
------ ------ ------- ------- ------
(In Millions)
<S> <C> <C> <C> <C> <C>
Noninterest revenues:
Service charges on deposit accounts.......... $152.0 $134.7 $ 17.3 13% $120.1
Bank card revenue, net....................... 61.2 59.1 2.1 4 50.1
Trust and investment management.............. 51.1 48.7 2.4 5 45.7
Exchange fees................................ 31.5 28.1 3.4 12 24.3
Insurance revenue............................ 19.4 13.0 6.4 49 10.7
ATM revenue.................................. 18.9 16.1 2.8 17 14.9
Brokerage and other commissions.............. 9.1 14.0 (4.9) (35) 11.8
Trading account.............................. 12.5 17.0 (4.5) (26) 13.1
All other.................................... 31.7 39.2 (7.5) (19) 35.8
------ ------ ------- ------
387.4 369.9 17.5 5 326.5
------ ------ ------- ------
Activities affected by divestitures:
Mortgage banking income, net................. 17.0 44.4 (27.4) (62) 66.2
Credit reporting revenue..................... 13.2 34.0 (20.8) (61) 33.3
------ ------ ------- ------
30.2 78.4 (48.2) (61) 99.5
------ ------ ------- ------
Gain on sale of operations and loans........... 62.9 9.3 5.0
Equity investment income (loss)................ (5.4) 34.0 12.9
Gain on sale of mortgage loan servicing rights,
net of accelerated intangibles amortization... 1.3 40.2 (.8)
Gain (loss) on sale of securities.............. (8.1) -- .4
Nonrecurring noninterest revenue items......... (12.2) -- --
------ ------ ------
38.5 83.5 17.5
------ ------ ------
$456.1 $531.8 $(75.7) (14)% $443.5
--
--
------ ------ ------- ------
------ ------ ------- ------

<CAPTION>
Change
-----------------
Amount Percent
------- -------

<S> <C> <C>
Noninterest revenues:
Service charges on deposit accounts.......... $ 14.6 12%
Bank card revenue, net....................... 9.0 18
Trust and investment management.............. 3.0 7
Exchange fees................................ 3.8 16
Insurance revenue............................ 2.3 21
ATM revenue.................................. 1.2 8
Brokerage and other commissions.............. 2.2 19
Trading account.............................. 3.9 30
All other.................................... 3.4 9
-------
43.4 13
-------
Activities affected by divestitures:
Mortgage banking income, net................. (21.8) (33)
Credit reporting revenue..................... .7 2
-------
(21.1) (21)
-------
Gain on sale of operations and loans...........
Equity investment income (loss)................
Gain on sale of mortgage loan servicing rights,
net of accelerated intangibles amortization...
Gain (loss) on sale of securities..............
Nonrecurring noninterest revenue items.........

$ 88.3 20%
--
--
-------
-------
</TABLE>

Service charges on deposit accounts increased 13 percent to $152.0 million
in 1994 from $134.7 million in 1993. Selective repricing of consumer and
corporate payment and cash management products contributed to the increase in
these revenues in 1994 over 1993.

Bank card revenue totaled $61.2 million in 1994, compared with $59.1 million
in 1993. The increase is attributable to the growth in the affinity bank card
portfolio partially offset by a higher level of annual fee waivers.

Trust and investment administration revenues were $51.1 million in 1994 and
$48.7 million in 1993. The increase of $2.4 million in 1994 over 1993 reflects
the increase in revenue received from the management of employee benefit plan
assets, which increased from $10.7 million to $12.9 million.

Exchange fees, which consist primarily of fees from letters of credit, check
orders and foreign money exchanges, totaled $31.5 million in 1994 and $28.1
million in 1993.

Insurance revenue increased 49 percent in 1994 compared with 1993 due to
continued success in marketing annuity products. ATM revenue was $18.9 million
in 1994 and $16.1 million in 1993 and continued to reflect the expansion of ATM
transactions available to customers and adjustment of the pricing schedule to
accommodate the new features.

In August 1994, U. S. Bancorp sold most of the residential mortgage loan
servicing portfolio and 50 loan origination offices of its subsidiary U. S.
Bancorp Mortgage Company. Mortgage banking income in 1994 is not

17
<PAGE>
comparable to prior years due to the impact of this sale. In addition, mortgage
banking revenues were also lower in 1994 as compared with 1993 and 1992 due to a
lower volume of loan originations industry-wide as a result of an increase in
interest rates. Credit reporting revenues in 1994 were similarly affected by the
decline in mortgage loan originations and refinancings. U. S. Bancorp sold its
credit reporting subsidiary, Credco, Inc., in January 1995.

Included in revenues in 1994 was the $50.8 million gain related to the
aforementioned sale of mortgage subsidiary assets. Gains on sale of loans in
1994 totaled $11.2 million and relate to sales of a portion of an affinity bank
card portfolio and student loans. In 1993, gains on sale of loans totaled $4.5
million and gain on sale of operations was $4.8 million, primarily the result of
the sale of U. S. Bancorp's corporate trust business. Equity investment income
(loss) consisted primarily of market value adjustments of U. S. Bancorp's equity
investments in public companies and, on a smaller scale, in venture capital
investments in non-public companies. In 1993, a portion of the mortgage
subsidiary's mortgage servicing rights portfolio was sold for a gain of $54.8
million, and also led to recognition of $8.9 million of hedge income related to
the portfolios sold. In addition, during 1993, U. S. Bancorp adjusted the
recorded value of its purchased mortgage servicing rights and excess servicing
fees receivable in light of an increase in the rate of mortgage loan
prepayments. The carrying value of these assets was reduced by $23.5 million.
Losses incurred in 1994 on sale of investment securities relate to the sale of a
portion of the securities available for sale portfolio, the proceeds of which
were reinvested to increase the portfolio yield in future periods. Included in
other nonrecurring revenue items in 1994 were losses of $3.9 million incurred by
U. S. Bancorp's import/export finance subsidiary and $8.3 million of trading
account losses related to the sale of certain collateralized mortgage
obligations.

Noninterest Expense

Noninterest expenses, excluding the restructure charge and other expenses
identified in the table below, decreased $16.6 million, or 2 percent, compared
with 1993. Total noninterest expenses were $1.1 billion compared with $983
million in 1993 and $869 million in 1992.

<TABLE>
<CAPTION>
Change Change
---------------- -----------------
1994 1993 Amount Percent 1992 Amount Percent
------ ------ -------- ----- ------ ------- -------
(In Millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Noninterest expenses:
Employee compensation and benefits......... $473.1 $496.5 $ (23.4) (5)% $436.6 $ 59.9 14%
Net occupancy expense...................... 66.0 63.2 2.8 4 55.7 7.5 13
Equipment rentals, depreciation and
maintenance............................... 97.7 90.2 7.5 8 73.7 16.5 22
Regulatory agency fees..................... 39.6 41.3 (1.7) (4) 36.1 5.2 14
Telecommunications......................... 27.5 26.0 1.5 6 24.0 2.0 8
Amortization of intangibles................ 18.3 19.3 (1.0) (5) 14.0 5.3 38
Contract personnel......................... 13.3 15.3 (2.0) (13) 9.7 5.6 58
Legal and accounting....................... 9.6 8.3 1.3 16 8.4 (.1) (1)
Marketing and advertising.................. 22.8 27.7 (4.9) (18) 22.7 5.0 22
Other taxes and licenses................... 9.4 11.9 (2.5) (21) 11.8 .1 1
Stationery, supplies and postage........... 43.2 44.4 (1.2) (3) 39.3 5.1 13
Travel..................................... 11.0 13.9 (2.9) (21) 11.8 2.1 18
All other.................................. 132.4 122.5 9.9 8 96.1 26.4 27
------ ------ -------- ------ -------
963.9 980.5 (16.6) (2) 839.9 140.6 17
------ ------ -------- ------ -------
Restructuring charge......................... 100.0 -- --
OREO write-downs............................. 2.4 5.3 19.5
Asset write-downs............................ 18.4 6.2 --
Nonrecurring noninterest expense items....... 10.6 (9.2) 9.4
------ ------ ------
131.4 2.3 28.9
------ ------ ------
$1,095.3 $982.8 $ 112.5 11% $868.8 $114.0 13%
--
--
------ ------ -------- ----- ------ -------
------ ------ -------- ----- ------ -------
</TABLE>

18
<PAGE>
In first quarter 1994, a $100 million restructuring charge was recorded
related to a comprehensive program designed to allow U. S. Bancorp to become an
even more efficient, competitive and customer-focused financial institution. The
program included staff reductions accomplished through an early retirement
opportunity for certain employees, other severance programs and attrition,
divestiture of noncore activities, and the consolidation and integration of
certain operations and facilities that no longer fit U. S. Bancorp's corporate
objectives or the needs of its regional customers. The program is anticipated to
be completed by the end of the first quarter of 1995.

The $100 million charge represented the incremental costs as a result of the
restructuring plan. Included in the restructuring charge were $52.4 million of
costs associated with enhanced retirement and other benefit programs, $22.6
million of severance benefits, $9.5 million of expenses related to the cost to
exit certain business activities, $7.3 million related to consolidation and
integration of facilities, and $8.2 million of other cost reduction expenses
related to the program.

The restructuring charge consists of $96.4 million in anticipated cash
expenditures and $3.6 million of non-cash charges, mainly the write-downs of
facilities. A significant portion of the cash outlays associated with the
program relate to enhanced retirement programs, which will be funded over a 10
to 15 year period as contributions are made to the benefit plans. The
restructure program is not expected to have a material impact on U. S. Bancorp's
liquidity.

The most significant portion of future expense reductions will consist of
savings of employee compensation and benefits due to a reduction in employees.
By the third quarter of 1994, U. S. Bancorp had achieved a ten percent reduction
in full-time equivalent (FTE) employees, excluding the reduction in employees
associated with the mortgage loan origination offices sold. By year-end 1994,
FTE employees decreased to 10,610, or 18 percent, from 12,863 at December 31,
1993. Of the 2,253 decrease in FTE employees, 555 were the result of activities
sold and the balance was directly related to the restructuring program.

As of December 31, 1994, $18.9 million of the restructuring charge remained
in other liabilities which represented $10.9 million related to staff reductions
that were initiated in 1994, $3.1 million related to the consolidation and
integration of facilities in process, and $4.9 million related to other cost
reduction actions during 1994. At December 31, 1994, $48.8 million of employee
benefit plan liabilities related to the enhanced retirement programs were also
included in other liabilities.

As a result of the restructuring program, a substantial reduction in U. S.
Bancorp's operating expenses was achieved. Fourth quarter noninterest expenses
annualized were $904 million, a 12 percent reduction from the annualized fourth
quarter 1993 noninterest expenses of $1.03 billion.

Significant improvement in the overhead ratio (defined as noninterest
expenses as a percentage of tax-equivalent net interest income and noninterest
revenues) was achieved by the fourth quarter of 1994 when the ratio reached 63.3
percent, down from 67.1 percent in the third quarter of 1994 and 74.5 percent in
the first quarter of 1994 (excluding the restructuring charge). The overhead
ratio for the year 1994 was 75.5 percent (including the restructuring charge),
compared with 65.8 percent and 64.8 percent for 1993 and 1992, respectively.

Employee compensation decreased $23.4 million in 1994, or five percent,
compared with 1993, and in the fourth quarter of 1994 decreased $18.1 million,
or 17 percent, compared with compensation expense in the fourth quarter of 1993.
These reductions reflect the decrease in FTE employees that occurred during
1994. Employee benefits expense decreased $2 million, or two percent, in 1994
compared with 1993.

Net occupancy expense increased principally as the result of rent increases
associated with the occupancy of a new headquarters building by U. S. Bank of
Washington in Seattle, Washington. Equipment rentals, depreciation and
maintenance, excluding the impact of the computer software write-off discussed
below, increased eight percent in 1994 compared with 1993. The increase mainly
represents the incremental costs associated with upgrading systems and equipment
to improve productivity.

19
<PAGE>
Regulatory agency fees declined in 1994 as the result of improvement in the
FDIC risk classification of one of U.S. Bancorp's principal banking subsidiaries
for assessment purposes. Telecommunications expense increased six percent in
1994 as compared with 1993, and reflected the rapid growth in U. S. Bancorp's
24-hour telephone service centers which provide automated and personal service
around the clock to U. S. Bancorp customers. Reductions in several other expense
categories have been achieved through actions taken to implement the restructure
program as previously discussed.

Included in asset write-downs in 1994 was the write-off of certain
capitalized expenses as U. S. Bancorp changed its policy with respect to the
capitalization of internal costs related to the development and installation of
computer software. These unamortized costs related to several projects were
written off as a charge to expenses totaling $12.1 million in the third quarter
of 1994. Write-downs of intangibles resulting from revaluation of certain
acquired business intangibles in 1994 totaled $3.3 million. Deferred costs
totaling $3.0 million related to agent-originated consumer loans held for sale
were written off upon the transfer of these loans to the loan portfolio. Other
nonrecurring items were anticipated expenses related to system conversions --
$6.2 million; interest accrued on pending settlements with tax authorities --
$3.0 million; and other items totaling $1.4 million. Asset write-downs in 1993
included a $3.0 million write-down of bank premises and a $2.8 million
write-down of affinity credit card intangibles due to a change in underlying
assumptions regarding the solicitation period for potential cardholders.
Nonrecurring items in 1993 included reversal of excess postretirement and other
liabilities of $8 million. Nonrecurring items in 1992 included a $2.7 million
environmental liability accrual (a portion of which was reversed in 1993) and
$6.7 million of long-term debt redemption expense.

Income Taxes

U. S. Bancorp's effective income tax rate was 29.9 percent in 1994, compared
with 32.9 percent in 1993 and 30.8 percent in 1992. The decline in the effective
tax rate in 1994 from 1993 was caused primarily by the higher proportion of
tax-exempt income in 1994 due to the decline in taxable income related to the
restructuring charge. Also, in 1994, U. S. Bancorp recorded a higher amount of
tax credits associated with low income housing investments. The effective tax
rate in 1993 increased from 1992 primarily due to the increase in the federal
income tax rate from 34 percent to 35 percent, and a decrease in 1993 in the
relative proportion of tax-exempt income as compared with 1992.

FINANCIAL CONDITION

Securities Portfolios

The securities portfolios are managed to maximize yield over an entire
interest rate cycle while minimizing market exposure to changes in interest
rates. In the third quarter of 1994, U. S. Bancorp sold a portion of its
available for sale U. S. Treasury securities and reinvested the proceeds
primarily in collateralized mortgage obligations to improve the yield of the
securities portfolios. At December 31, 1994, the yield on the available for sale
securities portfolio was 5.43 percent, compared with 6.13 percent at year-end
1993. The decline in the portfolio yield in 1994 is the result of maturing
securities reinvested at lower rates. Securities available for sale totaled
$1.37 billion at December 31, 1994, and $1.68 billion at December 31, 1993.

Securities held to maturity totaled $1.40 billion at December 31, 1994,
compared with $1.74 billion at year-end 1993. Maturities of U. S. Treasuries and
government agencies accounted for the decline. The yield on the held to maturity
portfolio was 6.26 percent at December 31, 1994, compared with 6.36 percent at
year-end 1993.

At December 31, 1994, the securities portfolios included $1.37 billion of
mortgage-backed securities and collateralized mortgage obligations, compared
with $1.43 billion at December 31, 1993. Substantially all of these securities
were issued by Federal agencies or backed by Federal agency pass-through
securities.

20
<PAGE>
Maturity Distribution and Yields of Securities

<TABLE>
<CAPTION>
Available for Sale Held to Maturity
--------------------------------- ---------------------------------
Weighted Estimated Weighted Estimated
Average Fair Amortized Average Fair Amortized
December 31, 1994 Yield (1) Value Cost Yield (1) Value Cost
- -------------------------------------------------- ---------- --------- --------- ---------- --------- ---------
(In Millions)
<S> <C> <C> <C> <C> <C> <C>
U. S. Treasury obligations
Due within one year............................. 5.27% $ 151.7 $ 152.9 --% $ -- $ --
Due after one year but within five years........ 5.37 479.0 502.7 5.77 9.7 10.0
Due after five years but within ten years....... -- -- -- -- -- --
Due after ten years............................. -- -- -- -- -- --
--------- --------- --------- ---------
Total......................................... 5.35 630.7 655.6 5.77 9.7 10.0
--------- --------- --------- ---------
U. S. government agency securities (2)............
Due within one year............................. 3.53 15.0 15.0 -- -- --
Due after one year but within five years........ 4.03 12.8 13.0 7.14 27.2 27.9
Due after five years but within ten years....... 6.41 10.1 10.7 7.17 165.3 169.0
Due after ten years............................. 5.90 513.4 548.6 6.58 688.6 729.2
--------- --------- --------- ---------
Total......................................... 5.81 551.3 587.3 6.71 881.1 926.1
--------- --------- --------- ---------
State and municipal bonds.........................
Due within one year............................. -- -- -- 6.12 35.1 35.0
Due after one year but within five years........ -- -- -- 6.11 72.7 72.0
Due after five years but within ten years....... -- -- -- 5.27 197.3 208.3
Due after ten years............................. -- -- -- 5.05 31.0 34.4
--------- --------- --------- ---------
Total......................................... -- -- -- 5.51 336.1 349.7
--------- --------- --------- ---------
Other securities (3)..............................
Due within one year............................. 6.34 54.0 54.0 10.50 .3 .2
Due after one year but within five years........ 6.78 6.0 6.0 5.00 115.4 118.8
Due after five years but within ten years....... -- -- -- -- -- --
Due after ten years............................. 3.39 127.4 108.8 -- -- --
--------- --------- --------- ---------
Total......................................... 4.45 187.4 168.8 5.01 115.7 119.0
--------- --------- --------- ---------
5.43% $ 1,369.4 $1,411.7 6.26% $ 1,342.6 $1,404.8
--- --------- --------- ----- --------- ---------
--- --------- --------- ----- --------- ---------
<FN>
- ------------------------
(1) Tax-equivalent basis. For securities carried at estimated fair value, the
weighted average yield is computed using amortized cost.

(2) Included in U. S. government agency securities are mortgage-backed
securities and collateralized mortgage obligations.

(3) Equity securities with no stated maturity date were presented as due after
ten years.
</TABLE>

21
<PAGE>
Loan Portfolio

There was strong loan growth in 1994. Average loans grew 11 percent in the
fourth quarter of 1994 on an annualized basis over the third quarter, and ten
percent from the fourth quarter of 1993. For the full year, average loans
increased eight percent over the prior year. Loan growth was particularly strong
in commercial and consumer loans, and was geographically broad-based throughout
the year. Commercial loans increased to $7.4 billion at December 31, 1994, from
$6.8 billion at December 31, 1993, a nine percent increase. Consumer loans at
year-end 1994 were $3.7 billion. Excluding the increase in loans due to the
transfer of consumer loans held for sale into the loan portfolio in 1994,
consumer loans increased 14 percent over year-end 1993.

Loan Portfolio Analysis

<TABLE>
<CAPTION>
December 31,
-----------------------------------------------------
1994 1993 1992 1991 1990
--------- --------- --------- --------- ---------
(In Millions)
<S> <C> <C> <C> <C> <C>
Loans (net of unearned
income)
Commercial............. $ 7,384.6 $ 6,796.8 $ 6,320.8 $ 6,547.2 $ 6,727.2
Lease Financing........ 819.6 765.9 724.5 850.6 756.4
Foreign................ 49.8 96.3 64.8 53.8 53.8
Real estate
construction.......... 667.2 699.9 855.6 896.3 893.5
Real estate mortgage... 2,946.5 2,611.2 2,669.9 2,862.3 3,061.8
Consumer............... 3,738.0 3,198.4 2,929.0 2,709.6 2,503.2
--------- --------- --------- --------- ---------
$15,605.7 $14,168.5 $13,564.6 $13,919.8 $13,995.9
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>

It is U. S. Bancorp's objective to maintain a loan portfolio that is diverse
in terms of type of loan, industry concentration, geographic distribution and
borrower concentration in order to reduce the overall credit risk by minimizing
the adverse impact of any single event or set of occurrences. The Commercial
Loan Distribution table below shows the commercial loan portfolio stratified by
significant Standard Industrial Code classifications. It should be noted that
within the indicated classification, there are other subclassifications for
which U. S. Bancorp's reporting system monitors industry concentrations.

Commercial loans were primarily local middle-market credits and loans to
small businesses. U. S. Bancorp's two largest banks -- U. S. Bank of Oregon and
U. S. Bank of Washington -- are leaders in small business lending in their
respective states.

Commercial Loan Distribution

<TABLE>
<CAPTION>
December 31,
-------------
1994 1993
----- -----
<S> <C> <C>
Manufacturing............................................... 17.3% 17.0%
Service..................................................... 11.4 9.8
Retail...................................................... 11.0 10.7
Wholesale................................................... 10.7 9.9
Agricultural................................................ 8.3 7.9
Forest Products............................................. 8.2 11.0
Brokers, Dealers, and Insurance............................. 5.8 5.7
Financial................................................... 4.7 5.0
Transportation.............................................. 4.4 5.4
Contractors................................................. 4.2 5.2
Other....................................................... 14.0 12.4
----- -----
100.0% 100.0%
----- -----
----- -----
</TABLE>

Real estate mortgage loans increased $335.3 million to $2.9 billion at
year-end 1994 compared with 1993, primarily due to an increase in one-to-four
family residential real estate mortgage loans. In an effort to increase home
ownership opportunities for low- to moderate-income and first-time buyers, U. S.
Bancorp expanded its successful HomePartner loan program in the first quarter of
1994. The HomePartner product line provides more flexible credit guidelines and
flexible down payment options for first-time and low- to moderate-income
borrowers. For the year 1994, in excess of 1,300 loans were closed with
principal balances amounting to $111.5 million.

22
<PAGE>
The majority of U. S. Bancorp's real estate mortgage loans outstanding are
collateralized by properties located in the Pacific Northwest and Northern
California. U. S. Bancorp closely monitors the composition of its real estate
portfolio through prudent underwriting criteria and by monitoring loan
concentrations by geographic region and property type. An analysis of the real
estate portfolio at year-end 1994 is presented in the tables below.

Real Estate Loans Outstanding
December 31, 1994

<TABLE>
<CAPTION>
Residential Commercial Total
----------- ---------- --------
(In Millions)
<S> <C> <C> <C>
Real estate construction................. $ 235.4 $ 431.8 $ 667.2
Real estate mortgage..................... 1,080.4 1,866.1 2,946.5
----------- ---------- --------
$1,315.8 $2,297.9 $3,613.7
----------- ---------- --------
----------- ---------- --------
</TABLE>

Real Estate Loans Outstanding
Concentrations by State and Type of Collateral
December 31, 1994

<TABLE>
<CAPTION>
Washington California Oregon Other Total
---------- ---------- ------ ------ --------
(In Millions)
<S> <C> <C> <C> <C> <C>
Residential..................... $ 456.8 $497.9 $251.7 $109.4 $1,315.8
Commercial
Apartment/Condominium......... 201.3 60.2 70.2 42.5 374.2
Office........................ 232.4 47.9 143.6 27.2 451.1
Retail........................ 53.7 1.5 34.8 4.7 94.7
Hotel/Motel................... 179.2 90.1 156.5 48.5 474.3
Land.......................... 30.8 20.1 12.4 14.0 77.3
Other......................... 331.2 144.1 265.8 85.2 826.3
---------- ---------- ------ ------ --------
Total Commercial............ 1,028.6 363.9 683.3 222.1 2,297.9
---------- ---------- ------ ------ --------
Total........................... $1,485.4 $861.8 $935.0 $331.5 $3,613.7
---------- ---------- ------ ------ --------
---------- ---------- ------ ------ --------
</TABLE>

Asset/Liability Management

KEY OBJECTIVE. A key objective of asset/liability management is to manage
interest rate risk due to asset and liability cash flows and market interest
rate movements. The asset/liability management committee (ALCO) is comprised of
key executives and provides oversight to the asset/liability management process
and recommends policy guidelines for board of director approval. Adherence to
these policies is monitored continuously, and decisions regarding exposure to
changes in interest rates are made when appropriate and agreed to by the asset/
liability management committee.

SIMULATION MODEL. An asset/liability management simulation model is used to
quantify the exposure and impact of changing interest r ates on earnings. In
general, the simulation model is a dynamic tool which uses forecasting and
option adjusted cash flow analysis in order to model portfolios and the entire
balance sheet. Specifically, the simulation model: (i) captures all on- and
off-balance sheet financial instruments; (ii) anticipates balance sheet mix
changes and trends; (iii) utilizes both a standardized rate scenario set, and
multiple, randomly generated rate scenarios to forecast net interest income;
(iv) includes derivative instruments used to hedge "natural balance sheet"
dynamics; and (v) simulates pro forma balance sheets, cash flows, net interest
margin sensitivity and net interest income. Short-term interest rate sensitivity
is based on simulated impacts on net interest income for the succeeding twelve
months under standardized rising, flat and falling rate scenarios. Earning
assets and interest-bearing liabilities with longer lives (duration) may be
subject to more volatility than those with shorter duration. The model accounts
for these differences in its simulations.

The simulation model combines the significant factors that affect interest
rate sensitivity into a comprehensive earnings simulation for the succeeding
twelve months. At December 31, 1994, the simulation modeled

23
<PAGE>
the impact of assumptions that the treasury yield curve would: (i) increase
linearly during the year by 200 basis points, or (ii) decrease linearly by 100
basis points, and compared both of these rate scenarios to a flat rate scenario.
ALCO policy guidelines provide that the difference between a most probable rate
scenario compared with higher rate and lower rate scenarios should not result in
more than a ten percent negative impact on return on equity. Simulations as of
December 31, 1994, indicated U. S. Bancorp was positioned within these
guidelines and was slightly asset sensitive. It should be noted that the
simulation model neither takes into account future management actions that could
be undertaken to alter the simulated results, if there were a change in actual
market interest rates during the year, nor does it contemplate a change in
anticipated interest rate level/ volatility.

SIMULATION VERSUS GAP ANALYSIS. The matching of assets and liabilities may
be analyzed by examining the extent to which such assets and liabilities are
"interest rate sensitive" and by monitoring an institution's interest rate
sensitivity "gap". An asset or liability is said to be interest rate sensitive
within a specific time period if it will mature or reprice within that time
period. The interest rate sensitivity gap is defined as the difference between
the amount of interest-earning assets anticipated, based upon certain
assumptions, to mature or reprice within a specific time period and the amount
of interest-bearing liabilities anticipated, based upon certain assumptions, to
mature or reprice within that time period. A gap is considered positive when the
amount of interest rate sensitive assets maturing within a specific time frame
exceeds the amount of interest rate sensitive liabilities maturing within that
same time frame.

The simulation model process provides a dynamic assessment of interest rate
sensitivity, whereas a static interest rate gap table is compiled as of a point
in time. The model simulations differ from a traditional gap analysis because it
does not reflect the multiple effects of interest rate movements on the entire
range of assets, liabilities and off-balance sheet financial instruments, and
the analysis ignores the impact of new business strategies.

The simulation model is dynamic because it includes significant variables
(balance sheet mix, volumes, and pricing methodologies) that are identified as
being affected by interest rates. For example, the factors the simulation model
captures, which traditional gap tables do not, include: (i) rate of change
(magnitude) differentials, such as federal funds rates versus savings account
rates; (ii) maturity effects, such as refinanced loans; (iii) rate barrier
effects, such as caps or floors on loans; (iv) changing balance sheet, both
volume and mix changes; (v) floating rate loans that may be related to PRIME,
LIBOR, Treasury notes or other rate indices, which do not necessarily move
correspondingly with market rate changes; (vi) leads and lags that occur as
market rates change; and (vii) the effects of prepayment volatility on various
fixed-rate assets such as residential mortgages, mortgage-backed securities and
consumer loans. These and certain other effects were evaluated to develop the
multiple scenarios from which sensitivity of earnings to changes in interest
rates was determined.

The above mentioned effects included in the simulation are difficult to
properly present in a gap analysis. Notwithstanding these limitations, a
traditional banking industry gap table is presented on page 25. To improve
interest rate sensitivity disclosure, the table has been modified to include the
effect of off-balance sheet instruments. For presentation purposes, (i) savings,
interest checking and money market accounts, which can theoretically be repriced
at any time, are included in the 1-30 day category, (ii) noninterest-bearing
deposits are presented as non-interest/non-market sensitive, and (iii)
off-balance sheet financial instruments reflect the most likely expected impact
for the succeeding twelve month period.

USE OF DERIVATIVES IN INTEREST RISK MANAGEMENT. Off-balance sheet financial
instruments used in interest risk management include forward and futures
contracts and interest rate swap agreements. Interest rate swaps are primarily
used to change the floating or fixed rate characteristics of existing assets and
liabilities or to manage the repricing relationship between certain floating
rate assets and floating rate liabilities. Managing the interest rate
sensitivity position of the organization is the primary purpose. All
counterparties to these off-balance sheet financial instruments are subject to
the same credit analysis and approval afforded borrowing customers of U. S.
Bancorp.

24
<PAGE>
INTEREST RATE GAP ANALYSIS
December 31, 1994

<TABLE>
<CAPTION>
Total Non-interest/
1 -- 30 31 Days to Within 1 1 Year to 3 Years to Over Non-market
Days 1 Year Year 3 Years 5 Years 5 Years Sensitive Total
----------- ---------- ----------- ---------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Earning assets
Investment
activities:
Money market
investments....... $ 440,114 $ -- $ 440,114 $ -- $ -- $ -- $ -- $ 440,114
Loans held for
sale.............. 148,179 -- 148,179 -- -- -- -- 148,179
Securities
available for
sale.............. 1,506,631 -- 1,506,631 -- -- -- -- 1,506,631
Securities held to
maturity.......... 34,039 213,589 247,628 469,404 287,194 400,609 -- 1,404,835
----------- ---------- ----------- ---------- ---------- ---------- ------------ ------------
Total investment
activities...... 2,128,963 213,589 2,342,552 469,404 287,194 400,609 -- 3,499,759
Lending
activities........ 6,262,620 4,215,612 10,478,232 2,242,835 1,239,869 1,171,230 473,551 15,605,717
----------- ---------- ----------- ---------- ---------- ---------- ------------ ------------
Total earning assets... 8,391,583 4,429,201 12,820,784 2,712,239 1,527,063 1,571,839 473,551 19,105,476
Other assets........... -- -- -- -- -- -- 2,710,933 2,710,933
----------- ---------- ----------- ---------- ---------- ---------- ------------ ------------
Total assets... 8,391,583 4,429,201 12,820,784 2,712,239 1,527,063 1,571,839 3,184,484 21,816,409
----------- ---------- ----------- ---------- ---------- ---------- ------------ ------------
Interest-bearing
liabilities
Savings, NOW accounts
and interest
checking............ 3,683,649 -- 3,683,649 -- -- -- -- 3,683,649
Money market
accounts............ 3,176,920 -- 3,176,920 -- -- -- -- 3,176,920
Time deposits........ 704,455 2,234,938 2,939,393 848,282 281,307 97,156 -- 4,166,138
Short-term
borrowings.......... 3,184,377 160,941 3,345,318 -- -- 3,226 -- 3,348,544
Long-term
borrowings.......... 38,002 455,969 493,971 142,819 24,313 333,767 -- 994,870
----------- ---------- ----------- ---------- ---------- ---------- ------------ ------------
Total
interest-bearing
liabilities......... 10,787,403 2,851,848 13,639,251 991,101 305,620 434,149 -- 15,370,121
Noninterest-bearing
deposits.............. -- -- -- -- -- -- 4,021,659 4,021,659
Other liabilities...... -- -- -- -- -- -- 647,344 647,344
Shareholders' equity... -- -- -- -- -- -- 1,777,285 1,777,285
----------- ---------- ----------- ---------- ---------- ---------- ------------ ------------
Total liabilities and
equity................ 10,787,403 2,851,848 13,639,251 991,101 305,620 434,149 6,446,288 21,816,409
----------- ---------- ----------- ---------- ---------- ---------- ------------ ------------
Interest sensitive
gap................... (2,395,820) 1,577,353 (818,467) 1,721,138 1,221,443 1,137,690 473,551 3,735,355
Derivatives affecting
interest rate
sensitivity:
Pay -- floating
interest rate
swaps............... (536,114) (168,694) (704,808) -- -- -- -- (704,808)
Receive -- floating
interest rate
swaps............... 500,000 -- 500,000 -- -- -- -- 500,000
Receive -- fixed
interest rate
swaps............... -- 139,944 139,944 26,500 33,476 4,888 -- 204,808
Other derivatives.... (313,400) 558,000 244,600 (85,200) (146,400) (13,000) -- --
----------- ---------- ----------- ---------- ---------- ---------- ------------ ------------
Interest sensitive gap
adjusted for
derivative
instruments........... $(2,745,334) $2,106,603 $ (638,731) $1,662,438 $1,108,519 $1,129,578 $ 473,551 $ 3,735,355
----------- ---------- ----------- ---------- ---------- ---------- ------------ ------------
----------- ---------- ----------- ---------- ---------- ---------- ------------ ------------
Gap adjusted for
derivative instruments
as a percent of total
earning assets........ (14.37)% 11.03% (3.34)% 8.70% 5.80% 5.91% 2.48% 19.55%
----------- ---------- ----------- ---------- ---------- ---------- ------------ ------------
----------- ---------- ----------- ---------- ---------- ---------- ------------ ------------
</TABLE>

25
<PAGE>
Liquidity

Another objective of asset/liability management is to manage liquidity.
Liquidity is the ability to raise adequate and reasonably priced funds,
primarily through deposits, as well as purchased funds and the issuance of debt
and equity capital, and is managed through the selection of the asset mix and
the maturity mix of liabilities.

Core deposits, defined as deposits other than time deposits of $100,000 or
more, are U. S. Bancorp's primary source of funding. Core deposits provide a
sizable source of relatively stable and low-cost funds. Average core deposits
and shareholders' equity, which totaled $16.3 billion in 1994 and $16.4 billion
in 1993, funded 77 percent and 79 percent of average total assets in these
years, respectively.

A significant portion of the remaining funding of average total assets came
from senior and subordinated debt. Average senior and subordinated debt was $1
billion and $1.2 billion in 1994 and 1993, respectively. Other sources of
liquidity include purchased funds, comprised of time deposits over $100,000 and
short-term borrowings. Average purchased funds totaled $3.2 billion in 1994 and
$2.6 billion in 1993.

The affiliate banks individually maintain liquidity in the form of
short-term money market investments, anticipated prepayments and maturities of
securities and the maturity structure of their loan portfolios. Another source
of liquidity are those securities classified as available for sale, which was
$1.4 billion at December 31, 1994. A bank note program has been implemented
successfully over the past few years and is utilized by U. S. Bank of Oregon and
U. S. Bank of Washington to gain access to national markets. Also, U. S. Bank of
Washington, U. S. Bank of California and U. S. Savings Bank of Washington are
members of the Federal Home Loan Bank System which provides a stable source of
attractive, alternative funding and liquidity.

U. S. Bancorp believes that liquidity is also provided by its ability to
raise funds in a variety of money and capital markets. U. S. Bancorp has access
to funding through an ongoing medium-term note offering. At December 31, 1994,
U. S. Bancorp had available various uncommitted capacities, including $648
million remaining capacity under an $800 million debt shelf registration filed
in 1991, of which $500 million has been designated as medium-term notes. During
1993, U. S. Bancorp further enhanced its liquidity with the filing of a $500
million uncommitted subordinated debt shelf registration, all of which was
unissued at year-end 1994. In addition, U. S. Bancorp had available $165 million
in committed line of credit arrangements from unaffiliated banks, which were
primarily used as commercial paper back-up lines. U. S. Bancorp also had
available $150 million of remaining capacity under a $300 million uncommitted
preferred stock shelf registration filed in 1992.

U. S. Bancorp's liquidity is enhanced by its accessibility to a diversity of
national market sources of funds. The following table summarizes U. S. Bancorp's
ratings by major credit rating agencies at December 31, 1994; such ratings are
subject to revision or withdrawal at anytime. With respect to commercial paper,
an A-1 rating indicates a very strong capacity for timely payment. The Standard
& Poor's long-term investment grade ratings range from AAA to BBB, with an A
rating indicating a strong capacity. With respect to Moody's long-term ratings,
A is applied to upper-medium-grade obligations with adequate repayment capacity
and Baa (or baa) is applied to medium-grade obligations; ratings modified by 1
rank at the higher end of the category. Moody's Investors Service (Moody's)
upgraded U. S. Bancorp's senior debt rating to A2 from A3, subordinated debt to
A3 from Baa1, and the commercial paper rating to Prime-1 from Prime-2 in 1994.
The credit rating upgrades were based on improvements in credit quality and U.
S. Bancorp's emphasis on overhead reduction.

<TABLE>
<CAPTION>
Standard Duff Thomson
& Poor's Moody's & Phelps BankWatch
--------- --------- ----------- ----------
<S> <C> <C> <C> <C>
Commercial paper.................................................... A-1 P-1 DUFF1+ TBW-1
Senior debt......................................................... A A2 AA- A+
Subordinated debt................................................... A- A3 A+ A
Preferred stock..................................................... BBB+ a2 A A-
</TABLE>

26
<PAGE>
Provision and Allowance for Credit Losses

U. S. Bancorp's allowance for credit losses totaled $305.8 million at
December 31, 1994, representing 1.96 percent of loans outstanding, compared with
1.91 percent at year-end 1993. The provision for credit losses for 1994 was
$106.9 million, compared with a $92.9 million provision in 1993. The higher
provision reflected loan growth and management's intention to increase the
allowance for future potential loan losses, even as credit quality trends showed
improvement in 1994. The allowance for credit losses as a percentage of
nonperforming loans was 125 percent at December 31, 1993, and increased during
1994 to 168 percent of nonperforming loans at December 31, 1994.

The majority of net charge-offs in 1994 related to bank card and consumer
loans. Net bank card charge-offs declined from a peak of 3.89 percent in 1993 to
3.02 percent in 1994, while consumer loan net charge-offs declined to .66
percent from .83 percent in 1993. Real estate construction loan charge-offs were
$12.1 million in 1994, compared with $4.7 million in 1993 and $4.1 million in
1992. The 1994 charge-offs relate primarily to three commercial construction
projects in California.

Management performs a quarterly analysis to establish the appropriate level
of the allowance, taking into consideration such factors as loan loss
experience, an evaluation of potential losses in the portfolio, credit
concentrations and trends in portfolio volume, maturity, delinquencies and
nonaccruals, risks associated with standby letters of credit which guarantee the
debt of others and other off-balance sheet commitments, and prevailing and
anticipated economic conditions. This analysis provides an allowance consisting
of two components, allocated and unallocated. The allocated component reflects
inherent losses resulting from the analysis of individual loans and is developed
through specific credit allocations for individual loans and historical loss
experience for each loan category and risk classification within each category.
The total of these allocations is then supplemented by the unallocated component
of the allowance. The unallocated component reflects management's judgment and
determination of the amounts necessary for loan concentrations, economic
uncertainties and other subjective factors.

U. S. Bancorp continues to closely monitor credit risk in its loan
portfolio. U. S. Bancorp believes that its credit approval and review processes
are effective and operating in accordance with sound banking policy and that the
allowance for credit losses at December 31, 1994 was adequate to absorb
potential credit losses inherent in loans, leases, loan commitments and standby
letters of credit outstanding at that date.

In May 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards -(SFAS) No. 114, "Accounting by Creditors for
Impairment of a Loan." The statement was amended in October of 1994 by SFAS No.
118, which eliminated the income recognition provisions of SFAS No. 114 and
clarified certain disclosure requirements about impaired loans. Creditors are
permitted to continue to use existing methods for recognizing interest income on
impaired loans after adoption of these statements, which became effective
January 1, 1995, and can only be applied prospectively.

A loan is considered impaired when, based on current information and events,
it is probable that a creditor will be unable to collect all amounts due
according to the contractual terms of the loan agreement. Once a loan is
determined to be impaired, the statements require that the impairment be
measured based on the present value of the expected future cash flows discounted
at the loan's effective interest rate, except that as a practical expedient, the
impairment may be measured by using the loan's observable market price or the
fair value, less expected costs of disposal, of the collateral if the loan is
collateral dependent (i.e., repayment is expected to be provided solely by the
underlying collateral). The choice of a measurement method may be made on a
loan-by-loan basis.

If the measurement of the impaired loan is less than the recorded investment
in the loan (including accrued interest, net deferred loan fees or costs, and
unamortized premium or discount), an impairment is to be recognized by creating
a valuation allowance with a corresponding charge to the provision for credit
losses or by adjusting an existing valuation allowance for the impaired loan
with a corresponding charge or credit to the provision for credit losses.
Alternatively, the loan may be written down by the amount of the impairment.

Based upon assessment of the impact of the loan impairment statements on U.
S. Bancorp, the balance of the allowance for credit losses at December 31, 1994
will not increase upon adoption of these statements on January 1, 1995.

27
<PAGE>
Analysis of Allowance for Credit Losses

<TABLE>
<CAPTION>
1994 1993 1992 1991 1990
----------- ----------- ----------- ----------- -----------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Loans (net of unearned income).......... $15,605,717 $14,168,487 $13,564,648 $13,919,755 $13,995,850
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Daily average loans (net of unearned
income)................................ $14,728,160 $13,644,723 $13,722,277 $13,948,946 $13,170,344
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Balance of allowance for credit losses
at beginning of year................... $ 270,229 $ 259,155 $ 230,101 $ 202,787 $ 155,353
Acquisitions (dispositions)............. (1,241) 322 7,515 3,259 5,211
Loans charged-off
Commercial............................ 33,186 34,115 70,364 53,384 28,722
Lease financing....................... 1,027 5,851 10,071 6,083 2,721
Real estate construction.............. 12,080 4,744 4,148 4,983 8,719
Real estate mortgage.................. 4,237 9,734 9,960 15,681 7,129
Consumer.............................. 27,126 27,705 25,809 30,348 30,568
Bank card............................. 28,356 32,695 23,830 14,973 9,709
----------- ----------- ----------- ----------- -----------
Total................................... 106,012 114,844 144,182 125,452 87,568
----------- ----------- ----------- ----------- -----------
Recoveries of loans previously
charged-off
Commercial............................ 14,512 11,782 15,740 7,784 8,202
Lease financing....................... 1,056 586 901 784 322
Real estate construction.............. 1,234 1,971 870 163 443
Real estate mortgage.................. 4,638 5,787 3,555 2,969 3,785
Consumer.............................. 9,508 8,643 8,368 10,953 11,600
Bank card............................. 5,010 3,976 1,833 1,481 1,861
----------- ----------- ----------- ----------- -----------
Total................................... 35,958 32,745 31,267 24,134 26,213
----------- ----------- ----------- ----------- -----------
Net charge-offs......................... 70,054 82,099 112,915 101,318 61,355
Provision for credit losses............. 106,868 92,851 134,454 125,373 103,578
----------- ----------- ----------- ----------- -----------
Balance of allowance for credit losses
at end of year......................... $ 305,802 $ 270,229 $ 259,155 $ 230,101 $ 202,787
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Ratio of net charge-offs by average loan
category:
Commercial............................ .26% .34% .85% .68% .31%
Lease financing....................... .00 .73 1.13 .67 .36
Real estate construction.............. 1.58 .36 .37 .54 .98
Real estate mortgage.................. (.01) .15 .23 .43 .12
Consumer.............................. .66 .83 .83 .95 .98
Bank card............................. 3.02 3.89 3.21 2.53 1.93
Total loans........................... .48% .60% .82% .73% .47%
Credit quality ratios
Allowance as a % of year-end loans.... 1.96% 1.91% 1.91% 1.65% 1.45%
Allowance as a % of nonperforming
loans................................ 168% 125% 100% 77% 79%
</TABLE>

28
<PAGE>
ALLOCATION OF THE ALLOWANCE FOR CREDIT LOSSES

The allowance is available to absorb losses from all loans, although
allocations have been made for certain loans and loan categories. The allocation
of the allowance as shown below should not be interpreted as an indication that
charge-offs in future periods will occur in these amounts or proportions, or
that the allocation indicates future charge-off trends. In addition to the most
recent analysis of individual loans and pools of loans, management's methodology
also places emphasis on historical loss data, delinquency and nonaccrual trends
by loan classification category and expected loan maturity. This analysis,
management believes, identifies potential losses within the loan portfolio and
therefore results in allocation of a large portion of the allowance to specific
loan categories. The loan category percent represents the percentage of loans in
each category to total loans.

<TABLE>
<CAPTION>
December 31,
-------------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990
----------------- ----------------- ----------------- ----------------- -----------------
Loan Loan Loan Loan Loan
Category Category Category Category Category
Balance Percent Balance Percent Balance Percent Balance Percent Balance Percent
------- -------- ------- -------- ------- -------- ------- -------- ------- --------
(In Millions)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial and lease
financing.................... $103.6 53% $113.1 54% $139.7 52% $120.5 53% $111.6 54%
Real estate................... 33.7 23 40.4 23 41.0 26 40.9 27 21.6 28
Consumer...................... 54.2 24 52.8 23 52.5 22 55.5 20 58.4 18
Unallocated................... 114.3 -- 63.9 -- 26.0 -- 13.2 -- 11.2 --
-- -- -- -- --
------- ------- ------- ------- -------
$305.8 100% $270.2 100% $259.2 100% $230.1 100% $202.8 100%
-- -- -- -- --
-- -- -- -- --
------- ------- ------- ------- -------
------- ------- ------- ------- -------
</TABLE>

Asset Quality

Nonperforming assets consist of loans on which interest is no longer
accrued, certain restructured loans for which the interest rate or other terms
have been renegotiated, and real estate and equipment acquired in satisfaction
of loans. During 1994, U. S. Bancorp continued to experience positive asset
quality trends. Nonperforming assets represented 1.31 percent of loans and
foreclosed property at December 31, 1994, down from 1.77 percent at year-end
1993. Nonaccrual and restructured loans, as a percent of total loans, fell to
1.17 percent from 1.53 percent at December 31, 1993.

Nonperforming real estate loans and properties totaled $147 million, or 72
percent, of the nonperforming assets. Loans or properties of less than $5
million each made up 52 percent, or $107 million, of nonperforming assets at
December 31, 1994. Of the balance, six loans over $10 million each accounted for
$87 million. A significant portion of nonperforming assets at December 31, 1994
were commercial real estate loans related to properties located in California
($90 million) and Washington ($20 million).

At December 31, 1994, U. S. Bancorp's exposure to highly leveraged
transactions (HLT's) was $274 million of loans outstanding, with unfunded
commitments of $290 million. This compares to HLT loans outstanding of $239
million a year earlier, with unfunded commitments of $136 million. At December
31, 1994, there were no HLT loans on nonaccrual status, and there were no
charge-offs associated with HLT loans during the year.

In addition to the loans classified as nonperforming, U. S. Bancorp has
other loans which it has internally classified, largely due to weakening
financial strength of the borrowers or concern about specific industries. These
loans, although currently performing in accordance with contractual terms, are
monitored closely by management and have been specifically provided for in the
evaluation of the allowance for credit losses. U. S. Bancorp's lending
procedures and loan portfolio, including internally classified loans, are
examined by regulatory agencies as part of their supervisory activities.

29
<PAGE>
Nonperforming Assets and Past Due Loans

<TABLE>
<CAPTION>
December 31,
----------------------------------------------------------
1994 1993 1992 1991 1990
---------- ---------- ---------- ---------- ----------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Nonaccrual loans..................................... $ 170,802 $ 214,747 $ 252,376 $ 290,875 $ 244,555
Restructured loans................................... 11,307 1,458 5,647 6,062 13,530
Other real estate and equipment owned
Other real estate owned............................ 18,835 31,299 25,994 75,945 74,035
Equipment repossessed.............................. 3,841 4,598 5,412 12,659 --
---------- ---------- ---------- ---------- ----------
22,676 35,897 31,406 88,604 74,035
---------- ---------- ---------- ---------- ----------
Total nonperforming assets....................... $ 204,785 $ 252,102 $ 289,429 $ 385,541 $ 332,120
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total nonaccrual and restructured loans as a % of
total loans......................................... 1.17% 1.53% 1.90% 2.13% 1.84%
Total nonperforming assets as a % of loans and
foreclosed assets................................... 1.31% 1.77% 2.13% 2.75% 2.36%
Allowance for credit losses as a % of total
nonaccrual and restructured loans................... 168% 125% 100% 77% 79%
Accruing loans past due 90 days or more.............. $ 15,612 $ 14,062 $ 19,245 $ 30,598 $ 20,018
Interest computed on contractual terms............... 19,769 21,946 26,120 28,832 27,350
Interest recognized.................................. 6,537 9,038 8,766 4,570 7,080
</TABLE>

Past due loans are defined as loans contractually past due as to interest or
principal 90 days or more. For an explanation of U.S. Bancorp's nonaccrual
policy see Note 1. Summary of Significant Accounting Policies, Revenue
Recognition (page 46).

Nonperforming Assets Activity Summary

<TABLE>
<CAPTION>
December 31,
----------------------
1994 1993
---------- ----------
(In Thousands)
<S> <C> <C>
Nonaccrual loans
Beginning balance...................................................................... $ 214,747 $ 252,376
Additions.............................................................................. 159,149 228,764
Payments/Returned to accrual........................................................... (144,079) (166,480)
Charge-offs............................................................................ (43,139) (39,033)
Transfer to other real estate and equipment owned...................................... (15,876) (60,880)
---------- ----------
Ending balance......................................................................... $ 170,802 $ 214,747
---------- ----------
---------- ----------
Other real estate and equipment owned
Beginning balance...................................................................... $ 35,897 $ 31,406
Additions.............................................................................. 28,992 63,200
Sales.................................................................................. (39,775) (53,451)
Write-downs............................................................................ (2,438) (5,258)
---------- ----------
Ending balance........................................................................... $ 22,676 $ 35,897
---------- ----------
---------- ----------
</TABLE>

30
<PAGE>
The following table presents nonaccrual loans on both a contractually past
due and contractually current basis at December 31, 1994. Both book and
contractual balances are indicated, the difference reflecting charge-offs and
interest payments applied to principal.

Approximately 45 percent of the total nonaccrual loan portfolio at December
31, 1994 was less than 90 days past due, including $62 million, or 36 percent,
that were contractually current. Of the nonaccrual loans that are contractually
current, loans to 7 borrowers amounted to 80 percent of the total, and there was
some uncertainty that these loans will remain contractually current.

Nonaccrual Loans by Performance Category

<TABLE>
<CAPTION>
Cumulative
Cash
Book Payments Contractual
Principal Cumulative Applied to Principal
December 31, 1994 Balance Charge-offs (5) Principal (5) Balance
- ------------------------------------------------------------- ---------- ------------- ----------- -----------
(In thousands)
<S> <C> <C> <C> <C>
Contractually past due (1):
Payments not made (2):
90 days or more past due................................. $ 47,949 $ 11,290 $ -- $ 59,239
Less than 90 days past due............................... 240 -- -- 240
---------- ------------- ----------- -----------
48,189 11,290 -- 59,479
Payments made (3):
90 days or more past due................................. 46,777 25,316 13,476 85,569
Less than 90 days past due............................... 14,034 -- 243 14,277
---------- ------------- ----------- -----------
60,811 25,316 13,719 99,846
Total past due......................................... 109,000 36,606 13,719 159,325
Contractually current (4).................................... 61,802 8,830 6,998 77,630
---------- ------------- ----------- -----------
Total nonaccrual loans....................................... $ 170,802 $ 45,436 $ 20,717 $ 236,955
---------- ------------- ----------- -----------
---------- ------------- ----------- -----------
<FN>
- ------------------------
(1) Contractually past due is defined as loans past due as to principal or
interest 30 days or more.
(2) Borrower has made no payments since being placed on nonaccrual.
(3) Borrower has made some payments since being placed on nonaccrual.
(4) Contractually current is defined as a loan for which principal and interest
are being paid in accordance with its contractual terms. All of the
contractually current loans were placed on nonaccrual due to uncertainty of
receiving future required payments.
(5) Cumulative amounts recorded since loan was placed on nonaccrual.
</TABLE>

31
<PAGE>
Capital and Dividends

U. S. Bancorp believes that a strong capital position is vital to continued
profitability and to promote depositor and investor confidence. Additionally,
under the Federal Deposit Insurance Corporation Improvement Act of 1991
(FDICIA), acquisition capability, funding and the level and nature of regulatory
oversight will be dependent on the adequacy of capitalization.

The federal bank regulatory agencies have jointly issued rules which
implement a system of prompt corrective action for financial institutions
required by FDICIA. The rules define the relevant capital levels for the five
categories, ranging from "well-capitalized" to "critically undercapitalized". An
insured depository institution is generally deemed to be "well-capitalized" if
it has a total risk-based capital ratio of at least 10 percent, a Tier 1
risk-based capital ratio of at least 6 percent, and a leverage ratio of at least
5 percent.

Risk-based capital guidelines issued by the Federal Reserve Board establish
a risk-adjusted ratio relating capital to different categories of assets and
off-balance sheet exposures for bank holding companies. The guidelines require a
minimum total risk-based capital ratio of 8 percent, with half of the total in
the form of Tier 1 capital. U. S. Bancorp's Tier 1 capital is comprised
primarily of common equity and perpetual preferred stock, less goodwill and
certain other intangibles, and excludes the equity impact of adjusting available
for sale securities to market value. Total capital also includes subordinated
debt and a portion of the allowance for credit losses, as defined.

The risk-based capital rules have been supplemented by a leverage ratio,
defined as Tier 1 capital to adjusted quarterly average total assets. Banking
organizations other than those which are most highly rated are expected to
maintain ratios at least 100 to 200 basis points above the minimum 3 percent
level, depending on their financial condition.

Each subsidiary bank is subjected to capital requirements similar to the
requirements for bank holding companies. At December 31, 1994, all of U. S.
Bancorp's banking subsidiaries met the risk-based capital ratio and leverage
ratio requirements for "well capitalized" banks. The banking subsidiaries'
ratios are expected to be maintained at the required levels by the retention of
earnings and, if necessary, the issuance of additional capital-qualifying
securities.

The risk-based capital and leverage ratios for U. S. Bancorp and its
significant bank subsidiaries at December 31, 1994 are presented in the table
below (assets in millions):

<TABLE>
<CAPTION>
Risk-based
Capital Ratios
----------------------
Total Total Leverage
Assets Tier 1 Capital Ratio
----------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
U. S. Bancorp (Consolidated).......................................... $ 21,816 8.19% 11.03% 7.69%
Bank Subsidiaries
U. S. Bank of Oregon................................................ 11,254 8.82 10.87 9.11
U. S. Bank of Washington............................................ 6,630 8.39 10.83 8.14
U. S. Bank of California............................................ 1,978 9.01 11.46 5.76
U. S. Bank of Nevada................................................ 859 10.18 13.27 6.51
U. S. Bank of Idaho................................................. 129 8.77 10.03 7.91
</TABLE>

At December 31, 1994, common shareholders' equity was $1.6 billion. For the
year 1994, average common equity to average total assets increased to 7.69
percent from 7.54 percent in 1993. In April 1994, U. S. Bancorp's Board of
Directors approved a plan to repurchase up to six million shares of U. S.
Bancorp common stock over the next five years. During 1994, 2.2 million shares
were acquired at a cost of $57.1 million. The quarterly common dividend was
increased 13 percent in the third quarter of 1994, resulting in dividends of
$.94 per share declared in 1994, compared with $.85 per share in 1993.

32
<PAGE>
The tables below present additional information on maturity and interest
sensitivity of selected loan categories, time deposits of $100,000 or more, and
short-term borrowings.

Loan Maturity and Interest Rate Sensitivity

<TABLE>
<CAPTION>
December 31, 1994
----------------------------------------------------------------
Over One Year
One Year or Less Through Five Years Over Five Years Total
---------------- ------------------ --------------- ------
(In Millions)
<S> <C> <C> <C> <C>
Loans in domestic offices
Commercial............. $3,174 $2,913 $1,298 $7,385
Real estate
construction.......... 429 164 74 667
Foreign loans............ 14 12 24 50
------ ------ ------ ------
Total.................... $3,617 $3,089 $1,396 $8,102
------ ------ ------ ------
------ ------ ------ ------
Loans with predetermined
rate.................... $ 769 $1,677 $ 839 $3,285
Loans with floating
rate.................... 2,848 1,412 557 4,817
------ ------ ------ ------
Total.................... $3,617 $3,089 $1,396 $8,102
------ ------ ------ ------
------ ------ ------ ------
</TABLE>

Time Deposits of $100,000 or More

Maturities of domestic time deposits of $100,000 or more outstanding at
December 31, 1994:

<TABLE>
<CAPTION>
(In Thousands)
<S> <C>
3 months or less........................................................................ $ 280,882
Over 3 through 6 months................................................................. 81,028
Over 6 through 12 months................................................................ 124,995
Over 12 months.......................................................................... 164,291
--------------
Total............................................................................... $ 651,196
--------------
--------------
</TABLE>

Short-Term Borrowings

<TABLE>
<CAPTION>
Average
Daily Average Interest Rate
Amounts on Amounts Maximum Average Interest
Outstanding Outstanding Month-End Rate on Amounts
Year-End During the During the Amounts Outstanding at
Balance Year Year Outstanding Year-End
------------ ------------- ------------- ------------ -----------------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Commercial paper
1994.................................... $ 171,454 $ 228,490 4.49% $ 363,764 5.77%
1993.................................... 143,140 198,889 3.51 272,761 3.48
1992.................................... 141,914 240,726 4.12 312,314 3.89
Federal funds purchased and security
repurchase agreements
1994.................................... $ 2,783,503 $ 2,031,992 4.23% $ 2,783,503 5.55%
1993.................................... 1,954,176 1,450,154 3.02 1,954,176 2.96
1992.................................... 1,382,268 1,800,468 3.77 2,232,403 3.08
</TABLE>

33
<PAGE>
AVERAGE BALANCES

<TABLE>
<CAPTION>
1994 1993
---------------------------- -----------------------------
Average Average
Rates Rates
Average Income/ Earned/ Average Income/ Earned/
Balance Expense Paid Balance Expense Paid
--------- -------- ------- --------- --------- -------
(In Millions)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets
Money market investments.....................................
Time deposits with other banks........................... $ 4.2 $ .2 4.23% $ 3.6 $ .1 3.38%
Federal funds sold and security resell agreements........ 273.6 12.3 4.51 310.3 9.2 2.96
Other short-term investments............................. 9.6 .4 4.24 25.3 .8 3.03
--------- -------- ------- --------- --------- -------
Total money market investments......................... 287.4 12.9 4.49 339.2 10.1 2.97
Trading account securities................................... 170.4 9.8 5.76 193.0 9.8 5.10
Loans held for sale.......................................... 346.9 24.9 7.18 735.2 51.3 6.98
Securities available for sale (1)............................
U. S. Treasury obligations............................... 798.1 42.8 5.28 5.1 .3 4.84
U. S. government agency securities....................... 551.6 31.1 5.47 -- -- --
Other securities......................................... 160.6 7.1 4.42 -- -- --
--------- -------- ------- --------- --------- -------
Total securities available for sale.................... 1,510.3 81.0 5.26 5.1 .3 4.84
Securities held to maturity (2)..............................
U. S. Treasury obligations............................... 90.5 5.2 5.71 975.4 53.7 5.50
U. S. government agency securities....................... 948.1 60.6 6.40 1,713.5 108.9 6.36
State and municipal bonds................................ 375.1 31.8 8.48 337.2 31.4 9.31
Other securities......................................... 164.7 8.2 5.01 262.7 20.4 7.78
--------- -------- ------- --------- --------- -------
Total securities held to maturity...................... 1,578.4 105.8 6.71 3,288.8 214.4 6.52
Loans (net of unearned income) (2) (3).......................
Commercial............................................... 7,064.7 538.4 7.62 6,446.6 453.2 7.03
Lease financing.......................................... 749.0 56.1 7.48 720.4 60.6 8.41
Foreign.................................................. 83.1 4.7 5.69 65.1 2.8 4.31
Real estate construction................................. 686.0 51.5 7.51 760.9 53.9 7.08
Real estate mortgage..................................... 2,720.9 223.9 8.23 2,619.3 224.5 8.57
Consumer................................................. 3,424.5 333.2 9.73 3,032.4 313.9 10.35
--------- -------- ------- --------- --------- -------
Total loans............................................ 14,728.2 1,207.8 8.20 13,644.7 1,108.9 8.13
Loan fees.................................................... -- 70.8 -- -- 73.9 --
--------- -------- ------- --------- --------- -------
Total loans including fees................................... 14,728.2 1,278.6 8.68 13,644.7 1,182.8 8.67
--------- -------- ------- --------- --------- -------
Total interest earning assets/interest income................ 18,621.6 $1,513.0 8.13% 18,206.0 $ 1,468.7 8.07%
-------- ------- --------- -------
-------- ------- --------- -------
Allowance for credit losses.................................. (282.2) (261.5)
Cash and due from banks...................................... 1,341.9 1,227.3
Other assets................................................. 1,444.7 1,511.9
--------- ---------
Total assets................................................. $21,126.0 $20,683.7
--------- ---------
--------- ---------
Interest-bearing liabilities
Deposits.....................................................
Savings accounts......................................... $ 1,761.3 $ 38.3 2.17% $ 1,672.9 $ 40.4 2.41%
NOW accounts and interest checking....................... 2,149.0 28.1 1.31 2,119.2 33.3 1.57
Money market accounts.................................... 3,035.7 87.8 2.89 2.922.1 74.0 2.53
Time, $100 thousand or more.............................. 647.4 28.7 4.43 643.7 26.8 4.16
Other time............................................... 3,844.3 161.3 4.20 4,427.3 191.3 4.32
--------- -------- ------- --------- --------- -------
Total interest-bearing deposits........................ 11,437.7 344.2 3.01 11,785.2 365.8 3.10
Federal funds purchased and security repurchase agreements... 2,032.0 85.9 4.23 1,450.2 43.8 3.02
Commercial paper............................................. 228.5 10.4 4.49 198.9 7.0 3.51
Other short-term borrowings.................................. 261.1 6.7 2.58 272.8 8.3 3.02
Long-term debt............................................... 1,042.6 70.7 6.78 1,173.6 80.8 6.89
--------- -------- ------- --------- --------- -------
Total interest-bearing liabilities/interest expense.......... 15,001.9 $ 517.9 3.45% 14,880.7 $ 505.7 3.40%
-------- ------- --------- -------
-------- ------- --------- -------
Noninterest-bearing deposits................................. 3,746.0 3,503.6
Other liabilities............................................ 604.0 588.9
--------- ---------
Total liabilities............................................ 19,351.9 18,973.2
Shareholders' equity......................................... 1,774.1 1,710.5
--------- ---------
Total liabilities and shareholders' equity................... $21,126.0 $20,683.7
--------- ---------
--------- ---------
Interest rate spread......................................... 4.68% 4.67%
Impact of noninterest-bearing sources........................ .67 .62
------- -------
Net interest income and margin............................... $ 995.1 5.35% $ 963.0 5.29%
-------- ------- --------- -------
-------- ------- --------- -------

<FN>

1) Yields are based on amortized cost balances.
2) Interest income on tax-exempt securities and loans has been adjusted to a
fully tax-equivalent basis using the statutory Federal income tax rate of
35% for 1993 and 1994, and 34% for all other years.
3) Loans on nonaccrual status have been included in the computation of average
balances.
</TABLE>

34
<PAGE>
AND TAX-EQUIVALENT NET INTEREST MARGIN
<TABLE>
<CAPTION>
1992 1991
---------------------------- ----------------------------
Average Average
Rates Rates
Average Income/ Earned/ Average Income/ Earned/
Balance Expense Paid Balance Expense Paid
--------- -------- ------- --------- -------- -------
(In Millions)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets
Money market investments.....................................
Time deposits with other banks........................... $ 20.0 $ .9 4.47% $ 28.0 $ 1.8 6.51%
Federal funds sold and security resell agreements........ 408.4 14.9 3.64 471.3 28.1 5.96
Other short-term investments............................. 23.3 .8 3.69 40.5 2.7 6.66
--------- -------- ------- --------- -------- -------
Total money market investments......................... 451.7 16.6 3.68 539.8 32.6 6.04
Trading account securities................................... 187.7 10.6 5.67 203.1 14.6 7.19
Loans held for sale.......................................... 611.9 48.9 7.99 257.6 23.7 9.19
Securities available for sale (1)............................
U. S. Treasury obligations............................... -- -- -- -- -- --
U. S. government agency securities....................... -- -- -- -- -- --
Other securities......................................... -- -- -- -- -- --
--------- -------- ------- --------- -------- -------
Total securities available for sale.................... -- -- -- -- -- --
Securities held to maturity (2)..............................
U. S. Treasury obligations............................... 567.0 33.2 5.86 208.8 16.2 7.77
U. S. government agency securities....................... 1,232.7 92.6 7.51 852.3 78.0 9.15
State and municipal bonds................................ 356.4 33.7 9.45 374.8 36.3 9.68
Other securities......................................... 179.8 16.5 9.16 137.1 13.9 10.17
--------- -------- ------- --------- -------- -------
Total securities held to maturity...................... 2,335.9 176.0 7.53 1,573.0 144.4 9.18
Loans (net of unearned income) (2) (3).......................
Commercial............................................... 6,374.3 488.3 7.66 6,668.5 636.7 9.55
Lease financing.......................................... 810.5 76.5 9.45 795.2 84.7 10.65
Foreign.................................................. 53.5 2.7 5.02 48.8 3.7 7.54
Real estate construction................................. 889.9 69.0 7.75 897.0 83.6 9.31
Real estate mortgage..................................... 2,796.9 255.0 9.12 2,955.6 290.4 9.83
Consumer................................................. 2,797.2 314.0 11.22 2,583.8 304.5 11.79
--------- -------- ------- --------- -------- -------
Total loans............................................ 13,722.3 1,205.5 8.79 13,948.9 1,403.6 10.06
Loan fees.................................................... -- 70.6 -- -- 66.2 --
--------- -------- ------- --------- -------- -------
Total loans including fees................................... 13,722.3 1,276.1 9.30 13,948.9 1,469.8 10.54
--------- -------- ------- --------- -------- -------
Total interest earning assets/interest income................ 17,309.5 $1,528.2 8.83% 16,522.4 $1,685.1 10.20%
-------- ------- -------- -------
-------- ------- -------- -------
Allowance for credit losses.................................. (246.9) (216.9)
Cash and due from banks...................................... 1,043.4 955.9
Other assets................................................. 1,381.1 1,230.9
--------- ---------
Total assets................................................. $19,487.1 $18,492.3
--------- ---------
--------- ---------
Interest-bearing liabilities
Deposits.....................................................
Savings accounts......................................... $ 1,363.2 $ 43.9 3.22% $ 945.3 $ 45.9 4.86%
NOW accounts and interest checking....................... 1,852.9 44.3 2.39 1,620.5 57.0 3.52
Money market accounts.................................... 2,529.6 83.5 3.30 2,120.7 104.2 4.91
Time, $100 thousand or more.............................. 985.2 48.4 4.91 1,686.6 116.5 6.91
Other time............................................... 4,385.8 228.3 5.21 4,433.0 301.6 6.80
--------- -------- ------- --------- -------- -------
Total interest-bearing deposits........................ 11,116.7 448.4 4.03 10,806.1 625.2 5.79
Federal funds purchased and security repurchase agreements... 1,800.5 67.8 3.77 2,034.2 122.3 6.01
Commercial paper............................................. 240.7 9.9 4.12 239.2 15.5 6.50
Other short-term borrowings.................................. 243.7 12.3 5.04 306.7 19.6 6.41
Long-term debt............................................... 1,241.3 93.2 7.51 1,018.1 88.2 8.66
--------- -------- ------- --------- -------- -------
Total interest-bearing liabilities/interest expense.......... 14,642.9 $ 631.6 4.31% 14,404.3 $ 870.8 6.05%
-------- ------- -------- -------
-------- ------- -------- -------
Noninterest-bearing deposits................................. 2,803.6 2,272.7
Other liabilities............................................ 565.5 475.1
--------- ---------
Total liabilities............................................ 18,012.0 17,152.1
Shareholders' equity......................................... 1,475.1 1,340.2
--------- ---------
Total liabilities and shareholders' equity................... $19,487.1 $18,492.3
--------- ---------
--------- ---------
Interest rate spread......................................... 4.52% 4.15%
Impact of noninterest-bearing sources........................ .66 .78
------- -------
Net interest income and margin............................... $ 896.6 5.18% $ 814.3 4.93%
-------- ------- -------- -------
-------- ------- -------- -------

<CAPTION>
1990
----------------------------
Average 1989
Rates ---------
Average Income/ Earned/ Average
Balance Expense Paid Balance
--------- -------- ------- ---------

<S> <C> <C> <C> <C>
Interest-earning assets
Money market investments.....................................
Time deposits with other banks........................... $ 32.8 $ 2.8 8.66% $ 93.9
Federal funds sold and security resell agreements........ 413.0 33.7 8.15 317.9
Other short-term investments............................. 34.6 3.3 9.50 43.8
--------- -------- ------- ---------
Total money market investments......................... 480.4 39.8 8.29 455.6
Trading account securities................................... 221.3 18.8 8.48 134.8
Loans held for sale.......................................... 207.4 20.7 9.98 115.3
Securities available for sale (1)............................
U. S. Treasury obligations............................... -- -- -- --
U. S. government agency securities....................... -- -- -- --
Other securities......................................... -- -- -- --
--------- -------- ------- ---------
Total securities available for sale.................... -- -- -- --
Securities held to maturity (2)..............................
U. S. Treasury obligations............................... 245.8 20.4 8.29 476.9
U. S. government agency securities....................... 1,139.9 108.5 9.52 524.5
State and municipal bonds................................ 466.9 45.8 9.82 534.9
Other securities......................................... 221.8 18.6 8.39 298.1
--------- -------- ------- ---------
Total securities held to maturity...................... 2,074.4 193.3 9.32 1,834.4
Loans (net of unearned income) (2) (3).......................
Commercial............................................... 6,573.6 707.7 10.77 5,696.5
Lease financing.......................................... 660.9 69.7 10.54 276.9
Foreign.................................................. 35.1 2.8 8.05 24.5
Real estate construction................................. 848.0 89.0 10.49 763.8
Real estate mortgage..................................... 2,715.6 280.6 10.33 2,240.3
Consumer................................................. 2,337.2 280.3 11.99 2,096.5
--------- -------- ------- ---------
Total loans............................................ 13,170.4 1,430.1 10.86 11,098.5
Loan fees.................................................... -- 59.5 -- --
--------- -------- ------- ---------
Total loans including fees................................... 13,170.4 1,489.6 11.31 11,098.5
--------- -------- ------- ---------
Total interest earning assets/interest income................ 16,153.9 $1,762.2 10.91% 13,638.6
-------- -------
-------- -------
Allowance for credit losses.................................. (175.2) (139.6)
Cash and due from banks...................................... 1,102.1 1,086.2
Other assets................................................. 1,246.4 1,275.6
--------- ---------
Total assets................................................. $18,327.2 $15,860.8
--------- ---------
--------- ---------
Interest-bearing liabilities
Deposits.....................................................
Savings accounts......................................... $ 998.9 $ 47.3 4.74% $ 1,013.1
NOW accounts and interest checking....................... 1,418.5 56.3 3.97 1,317.5
Money market accounts.................................... 1,943.7 113.3 5.83 1,601.8
Time, $100 thousand or more.............................. 1,921.0 160.6 8.36 1,437.4
Other time............................................... 4,259.7 334.6 7.86 3,762.4
--------- -------- ------- ---------
Total interest-bearing deposits........................ 10,541.8 712.1 6.76 9,132.2
Federal funds purchased and security repurchase agreements... 2,226.4 180.8 8.12 1,652.4
Commercial paper............................................. 406.8 34.2 8.41 361.2
Other short-term borrowings.................................. 472.3 38.0 8.03 265.1
Long-term debt............................................... 644.1 60.8 9.44 587.7
--------- -------- ------- ---------
Total interest-bearing liabilities/interest expense.......... 14,291.4 $1,025.9 7.18% 11,998.6
-------- -------
-------- -------
Noninterest-bearing deposits................................. 2,294.9 2,160.2
Other liabilities............................................ 551.7 643.9
--------- ---------
Total liabilities............................................ 17,138.0 14,802.7
Shareholders' equity......................................... 1,189.2 1,058.1
--------- ---------
Total liabilities and shareholders' equity................... $18,327.2 $15,860.8
--------- ---------
--------- ---------
Interest rate spread......................................... 3.73%
Impact of noninterest-bearing sources........................ .83
-------
Net interest income and margin............................... $ 736.3 4.56%
-------- -------
-------- -------
<FN>
</TABLE>

35
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

(a) The following audited consolidated financial statements and related
documents are set forth in this Annual Report on Form 10-K on the pages
indicated:

<TABLE>
<CAPTION>
Page
----
<S> <C>
Letter of Management...................................................... 37
Independent Auditors' Report.............................................. 38
U. S. Bancorp and Subsidiaries:
Consolidated Balance Sheet.............................................. 39
Consolidated Statement of Income........................................ 40
Consolidated Statement of Changes in Shareholders' Equity............... 41
Consolidated Statement of Cash Flows.................................... 42
Notes to Consolidated Financial Statements.............................. 44
</TABLE>

(b) The following supplementary data is set forth in this Annual Report on Form
10-K on the page indicated:

<TABLE>
<S> <C>
Quarterly Financial Data.................................................. 70
</TABLE>

36
<PAGE>
LETTER OF MANAGEMENT

The management of U. S. Bancorp has prepared and is responsible for the
integrity and fairness of the financial statements and other financial
information included in this annual report. The financial statements are
prepared in accordance with generally accepted accounting principles and, when
appropriate, include amounts based on management's estimates and judgment.

To meet its responsibility both for the integrity and fairness of these
financial statements and information, management maintains accounting systems
and related internal accounting controls. These controls are designed to provide
reasonable assurance that transactions are properly authorized, assets are
safeguarded and financial records are reliably maintained. The concept of
reasonable assurance is based on the recognition that the cost of a system of
internal controls must be related to the benefits derived.

Management monitors the effectiveness and compliance of its internal control
systems through a continuous program of internal audits. Management has reviewed
the recommendations of the internal auditors and Deloitte & Touche LLP,
independent auditors, and has responded in an appropriate, cost-effective
manner.

The Audit Committee of the Board of Directors, composed solely of outside
directors, meets periodically with U. S. Bancorp's management, internal auditors
and the independent auditors to review matters relative to the quality of
financial reporting and internal accounting controls and the results of the
audit. The independent auditors and internal auditors meet with the Audit
Committee, at least once a year, without management present.

<TABLE>
<S> <C> <C>
GERRY B. CAMERON ROBERT D. SZNEWAJS STEVEN P. ERWIN
Chairman and Executive Vice President Executive Vice President
Chief Executive Officer and Chief Financial Officer
</TABLE>

37
<PAGE>
INDEPENDENT AUDITORS' REPORT

To the Directors and Shareholders of U. S. Bancorp:

We have audited the accompanying consolidated balance sheet of U. S. Bancorp
and subsidiaries as of December 31, 1994 and 1993, and the related consolidated
statements of income, changes in shareholders' equity, and cash flows for each
of the three years in the period ended December 31, 1994. These financial
statements are the responsibility of U. S. Bancorp's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of U. S. Bancorp and subsidiaries
at December 31, 1994 and 1993, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 1994, in
conformity with generally accepted accounting principles.

As discussed in Note 1 to the consolidated financial statements, U. S.
Bancorp and subsidiaries changed their method of accounting for investment
securities effective December 31, 1993, to conform with Statement of Financial
Accounting Standards No. 115. Also, as discussed in Note 12, U. S. Bancorp and
subsidiaries changed their methods of accounting for postretirement and
postemployment benefits effective January 1, 1992, to conform with Statements of
Financial Accounting Standards No. 106 and No. 112.

Deloitte & Touche, LLP

Portland, Oregon
March 6, 1995

38
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
ASSETS

<TABLE>
<CAPTION>
December 31,
----------------------------
1994 1993
------------- -------------
<S> <C> <C>
(In Thousands)
Cash and due from banks............................................................. $ 1,488,743 $ 1,250,565
Interest-bearing deposits with banks................................................ 1,461 8,633
Federal funds sold and security resell agreements................................... 429,366 295,317
Other short-term investments........................................................ 9,287 6,381
Trading account securities.......................................................... 137,194 208,318
Loans held for sale................................................................. 148,179 850,327
Securities available for sale, at fair value (amortized cost: 1994 -- $1,411,764;
1993 -- $1,646,907)............................................................... 1,369,437 1,676,942
Securities held to maturity, at amortized cost (fair value: 1994 -- $1,342,638; 1993
-- $1,770,086).................................................................... 1,404,835 1,736,558
Loans and lease financing, net of unearned income................................... 15,605,717 14,168,487
Allowance for credit losses......................................................... (305,802) (270,229)
------------- -------------
Net loans and lease financing....................................................... 15,299,915 13,898,258
Premises, furniture and equipment................................................... 544,701 533,050
Other real estate and equipment owned............................................... 22,676 35,897
Customers' liability on acceptances................................................. 225,229 192,982
Other assets........................................................................ 735,386 722,262
------------- -------------
$ 21,816,409 $ 21,415,490
------------- -------------
------------- -------------
LIABILITIES
Deposits
Noninterest-bearing deposits...................................................... $ 4,021,659 $ 3,909,617
NOW accounts and interest checking................................................ 2,071,293 2,191,777
Savings........................................................................... 1,612,356 1,749,933
Money market deposit accounts..................................................... 3,176,920 2,955,170
Consumer time..................................................................... 3,514,942 4,095,847
Time -- $100,000 or more.......................................................... 651,196 608,357
------------- -------------
15,048,366 15,510,701
Federal funds purchased and security repurchase agreements.......................... 2,783,503 1,954,176
Commercial paper.................................................................... 171,454 143,140
Other short-term borrowings......................................................... 393,587 308,105
Long-term debt...................................................................... 994,870 1,051,578
Accrued income taxes................................................................ 47,245 114,696
Acceptances outstanding............................................................. 225,229 192,982
Other liabilities................................................................... 374,870 321,917
------------- -------------
Total liabilities............................................................... 20,039,124 19,597,295
------------- -------------
SHAREHOLDERS' EQUITY
Preferred stock, authorized 50,000,000 shares:
Series A, no par value, 6,000,000 shares outstanding.............................. 150,000 150,000
Common stock, $5 par value, authorized 250,000,000 shares, outstanding: 1994 --
98,137,956; 1993 -- 99,476,391.................................................... 490,690 497,382
Capital surplus..................................................................... 350,612 385,613
Retained earnings................................................................... 811,808 767,075
Net unrealized gain (loss) on securities available for sale, net of tax............. (25,825) 18,125
------------- -------------
Total shareholders' equity...................................................... 1,777,285 1,818,195
------------- -------------
$ 21,816,409 $ 21,415,490
------------- -------------
------------- -------------
</TABLE>

See Notes to Consolidated Financial Statements.

39
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME

<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------
1994 1993 1992
---------- ---------- ----------
(In Thousands, Except Earnings Per Share)
<S> <C> <C> <C>
INTEREST INCOME
Loans and lease financing, including fees................. $1,258,197 $1,161,146 $1,253,112
Securities held to maturity............................... 95,342 202,314 163,382
Securities available for sale............................. 79,808 246 --
Loans held for sale....................................... 24,895 51,315 48,891
Trading account securities................................ 8,931 8,607 9,480
Interest-bearing deposits and other short-term
investments.............................................. 12,912 10,068 16,609
---------- ---------- ----------
Total interest income................................. 1,480,085 1,433,696 1,491,474
---------- ---------- ----------
INTEREST EXPENSE
Deposits.................................................. 344,194 365,791 448,372
Short-term borrowings..................................... 102,997 58,934 89,524
Long-term debt............................................ 70,736 80,860 93,220
---------- ---------- ----------
Total interest expense................................ 517,927 505,585 631,116
---------- ---------- ----------
NET INTEREST INCOME....................................... 962,158 928,111 860,358
Provision for credit losses............................... 106,868 92,851 134,454
---------- ---------- ----------
Net interest income after provision for credit losses..... 855,290 835,260 725,904
---------- ---------- ----------
NONINTEREST REVENUES
Service charges on deposit accounts....................... 151,990 134,668 120,102
Bank card revenue, net.................................... 61,172 59,122 50,163
Trust and investment management........................... 51,082 48,678 45,738
Exchange fees............................................. 31,545 28,051 24,333
Insurance revenue......................................... 19,438 12,951 10,655
Other operating revenue................................... 60,050 86,438 75,404
Credit reporting revenue.................................. 13,204 33,984 33,315
Mortgage banking income, net.............................. 17,308 28,786 57,970
Equity investment income (loss)........................... (5,429) 33,973 12,928
Gain (loss) on sale of securities available for sale...... (8,145) 4 --
Gain on sale of securities held to maturity............... -- 7 438
Gain on sale of mortgage loan servicing rights............ 1,023 55,846 7,467
Gain on sale of operations and loans...................... 62,883 9,311 4,988
---------- ---------- ----------
Total noninterest revenues............................ 456,121 531,819 443,501
---------- ---------- ----------
NONINTEREST EXPENSES
Employee compensation and benefits........................ 475,323 495,224 436,633
Net occupancy expense..................................... 67,121 65,931 55,709
Equipment rentals, depreciation and maintenance........... 107,554 90,237 73,703
Stationery, supplies and postage.......................... 43,178 44,412 39,309
Regulatory agency fees.................................... 39,635 41,335 36,095
Telecommunications........................................ 27,517 26,009 24,031
Amortization of intangibles............................... 21,633 22,773 13,975
Other operating expenses.................................. 213,354 196,909 189,328
Restructuring charge...................................... 100,000 -- --
---------- ---------- ----------
Total noninterest expenses............................ 1,095,315 982,830 868,783
---------- ---------- ----------
Income before income taxes................................ 216,096 384,249 300,622
Provision for income taxes................................ 64,601 126,300 92,548
---------- ---------- ----------
Income before cumulative effect of accounting changes..... 151,495 257,949 208,074
Cumulative effect of change in accounting for:
Postretirement benefits................................. -- -- (54,894)
Postemployment benefits................................. -- -- (4,996)
---------- ---------- ----------
NET INCOME................................................ $ 151,495 $ 257,949 $ 148,184
---------- ---------- ----------
---------- ---------- ----------
Amounts applicable to common stock
Income before cumulative effect of accounting changes... $ 139,308 $ 245,762 $ 202,725
Net income.............................................. 139,308 245,762 142,835
Per common share
Income before cumulative effect of accounting changes... $1.40 $2.47 $2.05
Net income.............................................. 1.40 2.47 1.45
Average number of common shares outstanding............... 99,448 99,327 98,650
</TABLE>

See Notes to Consolidated Financial Statements.

40
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
Net
Unrealized
Gain (Loss)
on
Shares Common Capital Retained Securities, Treasury Preferred
Outstanding Stock Surplus Earnings Net of Tax Stock Stock Total
----------- -------- --------- -------- ------------- -------- --------- ----------
(Dollars In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1992......... 98,194,026 $493,423 $ 375,491 $539,675 $ -- $(2,209 ) $ -- $1,406,380
Net income......................... -- -- -- 148,184 -- -- -- 148,184
Exercise of stock options.......... 715,322 3,577 6,734 -- -- -- -- 10,311
Treasury stock sold................ 6,739 -- (9) -- -- 30 -- 21
Common dividends declared
(per share -- $.76)............... -- -- -- (75,033 ) -- -- -- (75,033)
Preferred dividends paid and
declared.......................... -- -- -- (6,839 ) -- -- -- (6,839)
Issuance of 6,000,000 shares of
8 1/8% cumulative preferred
stock............................. -- -- (5,210) -- -- -- 150,000 144,790
Retired treasury stock............. -- (2,446 ) 267 -- -- 2,179 -- --
Dividends reinvested and other..... 151,690 785 2,709 -- -- -- -- 3,494
----------- -------- --------- -------- ------------- -------- --------- ----------
Balance at December 31, 1992....... 99,067,777 495,339 379,982 605,987 -- -- 150,000 1,631,308
Net income......................... -- -- -- 257,949 -- -- -- 257,949
Exercise of stock options.......... 258,157 1,290 2,668 -- -- -- -- 3,958
Common dividends declared
(per share -- $.85)............... -- -- -- (84,449 ) -- -- -- (84,449)
Preferred dividends declared....... -- -- -- (12,187 ) -- -- -- (12,187)
Dividends reinvested and other..... 150,457 753 2,963 (225 ) -- -- -- 3,491
Change in net unrealized gain
(loss) on securities, net of
tax............................... -- -- -- -- 18,125 -- -- 18,125
----------- -------- --------- -------- ------------- -------- --------- ----------
Balance at December 31, 1993....... 99,476,391 497,382 385,613 767,075 18,125 -- 150,000 1,818,195
Net income......................... -- -- -- 151,495 -- -- -- 151,495
Exercise of stock options.......... 737,875 3,690 7,626 -- -- -- -- 11,316
Repurchase of common stock......... (2,228,300 ) (11,142 ) (45,960) -- -- -- -- (57,102)
Common dividends declared
(per share -- $.94)............... -- -- -- (93,395 ) -- -- -- (93,395)
Preferred dividends declared....... -- -- -- (12,187 ) -- -- -- (12,187)
Dividends reinvested and other..... 151,990 760 3,333 (1,180 ) -- -- -- 2,913
Change in net unrealized gain
(loss) on securities, net of
tax............................... -- -- -- -- (43,950) -- -- (43,950)
----------- -------- --------- -------- ------------- -------- --------- ----------
Balance at December 31, 1994....... 98,137,956 $490,690 $ 350,612 $811,808 $(25,825) $ -- $150,000 $1,777,285
----------- -------- --------- -------- ------------- -------- --------- ----------
----------- -------- --------- -------- ------------- -------- --------- ----------
</TABLE>

See Notes to Consolidated Financial Statements.

41
<PAGE>
U. S. BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------
1994 1993 1992
----------- ----------- -----------
(In Thousands)
<S> <C> <C> <C>
Cash flows from operating activities
Net income................................................. $ 151,495 $ 257,949 $ 148,184
Adjustments to reconcile net income to net cash provided by
operating activities
Cumulative effect of accounting changes.................. -- -- 59,890
Deferred tax (benefit) expense........................... (42,624) 35,439 25,190
Depreciation, amortization and accretion................. 106,427 106,753 75,715
Provision for credit losses.............................. 106,868 92,851 134,454
Noncash portion of restructuring charge.................. 68,774 -- --
Net gain on sales of operations.......................... (51,702) (4,838) --
Net (gain) loss on sales of equity investments........... 5,873 (35,392) (12,928)
Net (gain) loss on sales of securities available for
sale.................................................... 8,145 (4) --
Net gain on sales of securities held to maturity......... -- (7) (438)
Net gain on sales of trading securities.................. (4,232) (17,033) (13,815)
Net gain on sales of loans and property.................. (22,524) (24,250) (29,675)
Net gain on sales of mortgage loan servicing rights...... (1,023) (55,846) (7,467)
Change in loans held for sale............................ 530,538 (82,758) (74,969)
Change in trading account securities..................... 76,848 (33,522) 62,158
Change in deferred loan fees, net of amortization........ 6,995 (4,047) (7,635)
Change in accrued interest receivable.................... (8,766) 7,062 12,544
Change in accrued interest payable....................... (887) (8,147) (22,735)
Change in other assets and liabilities, net.............. (53,424) 34,134 (108,182)
----------- ----------- -----------
Net cash provided by operating activities.................... 876,781 268,344 240,291
----------- ----------- -----------
Cash flows from investing activities
Proceeds from maturities of interest-earning deposits of
nonbank subsidiaries...................................... 8,996 17,842 50,678
Purchase of interest-earning deposits by nonbank
subsidiaries.............................................. (12,153) (7,474) (46,090)
Net (increase) decrease in investments in interest-earning
deposits by banking subsidiaries.......................... 5,236 23,474 (14,289)
Proceeds from maturities of securities held to maturity.... 730,864 1,727,219 1,259,053
Proceeds from sales of securities held to maturity......... -- 1,007 45,657
Purchase of securities held to maturity.................... (361,985) (2,065,792) (2,386,673)
Proceeds from sales of securities available for sale....... 345,838 4 --
Proceeds from maturities of securities available for
sale...................................................... 125,538 9,116 --
Purchase of securities available for sale.................. (303,602) (14,910) --
Proceeds from sales of equity investments.................. 4,199 105,826 33,343
Purchase of equity investments............................. (18,278) (37,671) (31,333)
Principal collected on loans by nonbank subsidiaries....... 847,308 2,164,985 2,406,938
Loans made to customers by nonbank subsidiaries............ (846,086) (1,945,891) (2,430,288)
Net change in loans by banking subsidiaries................ (1,477,000) (965,433) 19,474
Proceeds from sales of loans............................... 122,516 155,025 392,132
Purchase of loans.......................................... (76,536) (225,939) (80,980)
Proceeds from sales of premises and equipment.............. 14,710 9,232 15,109
Purchase of premises and equipment......................... (105,092) (112,255) (114,088)
Proceeds from sales of mortgage servicing rights........... 24,917 52,984 11,659
Purchase of mortgage servicing rights...................... (1,044) (2,800) (1,900)
Proceeds from sales of foreclosed assets................... 38,370 51,775 68,954
Acquisitions/dispositions, net of cash and cash
equivalents............................................... 152,741 442,435 884,269
----------- ----------- -----------
Net cash provided by (used in) investing activities.......... (780,543) (617,241) 81,625
----------- ----------- -----------
Cash flows from financing activities
Net change in deposits..................................... (462,226) (372,443) 671,223
Net change in short-term borrowings........................ 943,123 636,744 (655,949)
Proceeds from issuance of long-term debt................... 486,868 264,328 544,654
Repayment of long-term debt................................ (543,803) (542,539) (429,542)
Proceeds from issuance of common stock..................... 12,021 6,554 10,746
Common stock repurchased................................... (57,102) -- --
Proceeds from issuance of preferred stock.................. -- -- 144,790
Dividends paid............................................. (102,892) (93,573) (78,660)
----------- ----------- -----------
Net cash provided by (used in) financing activities.......... 275,989 (100,929) 207,262
----------- ----------- -----------
Net change in cash and cash equivalents...................... 372,227 (449,826) 529,178
Cash and cash equivalents at beginning of year............... 1,545,882 1,995,708 1,466,530
----------- ----------- -----------
Cash and cash equivalents at end of year..................... $ 1,918,109 $ 1,545,882 $ 1,995,708
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

See Notes to Consolidated Financial Statements.

42
<PAGE>
U. S. BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)

<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------
1994 1993 1992
----------- ----------- -----------
(In Thousands)
<S> <C> <C> <C>
Supplemental disclosures:
Cash paid during the period for:
Interest................................................... $ 518,812 $ 513,731 $ 653,851
Income taxes............................................... 101,050 85,452 72,031
Non-cash investing activities:
Transfer from loans to other real estate owned............. $ 28,358 $ 63,200 $ 30,565
Transfer of loans to loans held for sale................... -- 26,120 187,787
Transfer to consumer loans from loans held for sale........ 96,447 -- --
Conversion of foreclosed loan collateral to premises,
furniture and equipment................................... -- -- 8,315
Transfer from loans to premises, furniture and equipment... -- 11,750 --
Transfer from securities held to maturity to available for
sale...................................................... -- 1,641,114 --
Transfer from securities available for sale to held to
maturity.................................................. 56,263 -- --
Fair value adjustment to securities available for sale..... (72,362) 30,032 --
Income tax effect related to fair value adjustment......... 27,576 11,908 --
</TABLE>

See Notes to Consolidated Financial Statements.

43
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies
The accounting and reporting policies of U. S. Bancorp and its subsidiaries
conform with generally accepted accounting principles and prevailing practices
within the banking industry. The following is a description of the more
significant policies.

BASIS OF FINANCIAL STATEMENT PRESENTATION

The consolidated financial statements have been prepared in accordance with
generally accepted accounting principles and with general practice within the
banking industry. In preparing such financial statements, management is required
to make estimates and judgments that affect the reported amounts of assets and
liabilities as of the date of the balance sheet and revenues and expenses for
the period. Actual results could differ significantly from those estimates.
Material estimates that are particularly susceptible to significant change
relate to the determination of the allowance for credit losses and the valuation
of real estate acquired in connection with foreclosures or in satisfaction of
loans. In connection with the determination of the allowance for credit losses
and the valuation of real estate owned, management obtains independent
appraisals for significant properties.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements of U. S. Bancorp include the accounts
of U. S. Bancorp and its subsidiaries. All significant intercompany accounts and
transactions have been eliminated. The significant banking subsidiaries of U. S.
Bancorp (the Banks) include United States National Bank of Oregon (U. S. Bank of
Oregon), U. S. Bank of Washington, National Association (U. S. Bank of
Washington), U. S. Bank of California, U. S. Bank of Nevada, and U. S. Bank of
Idaho, National Association.

Results of operations of companies acquired and accounted for as purchases
are included from their dates of acquisition. When an acquisition occurs through
a pooling of interests, prior period financial statements are restated to
include the accounts of companies acquired.

Certain prior year amounts have been reclassified to conform to the current
year presentation.

ACCOUNTING FOR ACQUISITIONS

In accordance with the purchase method of accounting, the assets and
liabilities of purchased banking and financial organizations were stated at
estimated fair values at the date of acquisition. The excess of cost over fair
value of net assets acquired has been accounted for as goodwill and is being
amortized on the straight-line method ranging from 15 to 25 years.

LOANS HELD FOR SALE

Loans held for sale include mortgage and consumer loans and each is reported
at the lower of cost or aggregate market value.

The cost of over-the-counter options used to hedge interest rate and price
fluctuations until mortgage loans are sold is amortized straight-line over the
option period and recorded as a component of the gain or loss on mortgage loan
sales. Commitment fees incurred on contracts to ensure future delivery of
mortgage loans into mortgage-backed securities are amortized straight-line over
the commitment period and recorded as a component of the gain or loss on
mortgage loan sales.

SECURITIES

At December 31, 1993, U. S. Bancorp adopted Statement of Financial
Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt
and Equity Securities." SFAS No. 115 requires the classification of securities
at acquisition into one of three categories: held to maturity, available for
sale, or trading.

In accordance with SFAS No. 115, securities are classified as held to
maturity where U. S. Bancorp has the ability and positive intent to hold them to
maturity. Securities bought and held principally for the purpose of

44
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. Summary of Significant Accounting Policies (Continued)
sale in the near term are classified as trading securities. Investments not
classified as trading securities nor as held to maturity securities are
classified as securities available for sale. Securities in this classification
are available for future liquidity requirements.

Securities held to maturity are carried at cost, adjusted for amortization
of premiums and accretion of discounts to maturity. Unrealized losses on
securities held to maturity due to fluctuations in fair value are recognized
when it is determined that an other than temporary decline in value has
occurred. Realized gains and losses on sale of securities available for sale are
computed on the specific identification method. Trading account securities are
carried at fair value. Realized gains and losses on sale on trading account
securities, computed on the average cost method, and fair value adjustments are
included in noninterest revenue.

Unrealized holding gains and losses on securities available for sale are
excluded from earnings and are reported net of tax as a separate component of
shareholders' equity until realized.

INTEREST RATE AND CURRENCY CONTRACTS

U. S. Bancorp uses various interest rate contracts, such as interest rate
swaps, futures, forward rate agreements, caps and floors, as part of
asset/liability management or to hedge trading accounts and to provide for the
needs of its customers.

Gains and losses on interest rate contracts used for asset/liability
management purposes are deferred and recognized as interest income or interest
expense over the lives of the related assets or liabilities. For contracts used
to hedge trading activities, gains and losses are included in trading account
income. Income or expense on interest rate contracts used to manage interest
rate exposure is recognized as an adjustment of the yield over the life of the
underlying assets or liabilities.

Foreign currency contracts are valued at current prevailing rates of
exchange, and gains or losses resulting from such valuations are included in
noninterest revenue.

ALLOWANCE FOR CREDIT LOSSES

The allowance for credit losses is established to absorb known and inherent
losses primarily resulting from loans and leases oustanding, commitments to
extend credit, standby letters of credit and other guarantees. Amounts are added
to the allowance for credit losses and charged against earnings to bring the
allowance to a level which, in management's judgment, is considered adequate to
absorb losses inherent in the portfolio. Management performs a quarterly
analysis to determine the appropriate level of the allowance, taking into
consideration factors such as general economic conditions, historical loss
experience, credit concentrations and trends in portfolio volume, maturity,
delinquencies and nonaccruals. Actual credit losses, net of recoveries, are
deducted from the allowance. While management uses the best information
available on which to base estimates, future adjustments to the allowance may be
necessary if economic conditions, particularly in U. S. Bancorp's markets,
differ substantially from the assumptions used by management.

PREMISES, FURNITURE AND EQUIPMENT

Premises, furniture and equipment are stated at cost less accumulated
depreciation and amortization. Construction costs and the cost of funds to
finance major projects are capitalized. Maintenance and repairs are charged to
expense as incurred and the cost of improvements is capitalized. Provisions for
depreciation and amortization are computed using the straight-line method.
Estimated useful lives range up to 50 years for buildings, three to ten years
for furniture and equipment, and up to the lease term for leasehold
improvements.

45
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. Summary of Significant Accounting Policies (Continued)
OTHER REAL ESTATE AND EQUIPMENT OWNED

Properties acquired by foreclosure or deed in lieu of foreclosure are
carried at the lower of their recorded amounts or fair value less estimated
costs of disposal in accordance with Statement of Position 92-3, "Accounting for
Foreclosed Assets." Any write-downs at, or prior to, the date of acquisition are
charged to the allowance for credit losses. Subsequent write-downs, gains or
losses recognized on the sale of these properties and net operating results are
included in noninterest expenses.

INCOME TAXES

Income taxes are accounted for using the asset and liability method. Under
this method, a deferred tax asset or liability is determined based on the
enacted tax rates which will be in effect when the differences between the
financial statement carrying amounts and tax bases of existing assets and
liabilities are expected to be reported in U. S. Bancorp's income tax returns.
The deferred tax provision for the year is equal to the change in the deferred
tax liability from the beginning to the end of the year. The effect on deferred
taxes of a change in tax rates is recognized in income in the period that
includes the enactment date.

TRUST DIVISION ASSETS

Property held by the Banks in fiduciary or agency capacity for their
customers is not included in the accompanying consolidated balance sheet, since
such items are not assets of the respective banks.

REVENUE RECOGNITION

Interest income is accrued as earned. The accrual of interest income on
business loans ceases when potential collection difficulties are foreseen and
collateral is inadequate to cover principal and interest. When a loan is placed
on nonaccrual status, interest accrued but not received is reversed against
interest income. If management determines that ultimate collectibility of
principal is in doubt, cash receipts on nonaccrual loans are applied to reduce
the principal balance. A loan may be returned to accrual status when all
delinquent principal and interest become current in accordance with the terms of
the loan agreement or when the loan is both well secured and in the process of
collection.

Bank card loans are charged off upon becoming 180 days past due. Other
consumer loans are, in general, charged off upon becoming 90 days past due and
interest earned but not collected thereon is reversed at the time of charge-off.
Consequently, such loans are not placed on nonaccrual status.

Unearned income on direct financing leases is amortized to produce a level
yield on the remaining net receivable balance. Income from leveraged leases is
recognized over the term of the leases based on the unrecovered equity
investment.

LOAN FEE INCOME

Loan origination and commitment fees and certain direct loan origination
costs are deferred and the net amount amortized as an adjustment of the yield
over the contractual life of the loans and included in interest income. Loan
fees from loans held for sale are deferred and recognized as a component of the
gain or loss on sale of the loans. Loans and leases are carried at cost less
unamortized net loan fees. Commitment fees based on a percentage of a customer's
unused line of credit and fees related to standby letters of credit are
recognized in noninterest revenue over the commitment period.

MORTGAGE SERVICING

Loan servicing fees are based on a percentage of the outstanding loan
principal balances being serviced and are included in income as related loan
payments from mortgagors are collected.

The difference between the actual service fee rates and normal service fee
rates on those loans which are sold with servicing rights retained is
capitalized as excess servicing fee receivable, and is amortized based on a
method which relates the amortization to the estimated life of these loans. In
the event of unanticipated

46
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. Summary of Significant Accounting Policies (Continued)
prepayments, the excess servicing fee receivable is written down to the present
value (based on the original discount rate) of the estimated remaining future
excess servicing revenue through a reduction of servicing fee income.

Costs associated with the acquisition of loan servicing rights through the
purchase of servicing contracts are deferred and amortized on a method which
relates the amortization of these costs to the estimated net servicing income.
In the event of unanticipated prepayments, the future amortization rate is
adjusted prospectively, such that the undiscounted future cash flows approximate
the expected future net servicing income.

Monthly payments required of U. S. Bancorp under mortgage loan servicing
prepayment hedges are recorded as a reduction of servicing income. Payments
received by U. S. Bancorp as the result of changes in prepayment experience are
recorded as an increase to servicing income.

COMPUTATIONS OF EARNINGS PER SHARE

Earnings per common share are based on net income after preferred dividend
requirements and the weighted average number of common shares outstanding,
adjusted for stock splits and stock dividends. The dilutive effect of the
assumed exercise of stock options outstanding is not material.

STATEMENT OF CASH FLOWS

For purposes of the statement of cash flows, U. S. Bancorp considers cash
and due from banks and federal funds sold and security resell agreements to be
cash and cash equivalents. Deposits placed with other financial institutions,
time deposits and lending activities of the Banks are reported net in the
statement.

2. Restructuring Charge
In March of 1994, U. S. Bancorp's Board of Directors approved a major cost
reduction and revenue enhancement program. This program included plans for a 10
percent reduction in staff, and plans to eliminate and integrate certain
operations and facilities. Through an early retirement program, other severance
programs and attrition, U. S. Bancorp accomplished the 10 percent reduction in
full-time equivalent employees by the end of third quarter 1994. The pretax
expense of $100 million represented those incremental costs incurred as a result
of the restructuring plan.

The restructure charge consists of $96.4 million in anticipated cash
expenditures and $3.6 million of non-cash charges, mainly the write-downs of
facilities. A significant portion of the cash outlays associated with the
program relate to enhanced retirement programs, which will be funded over a 10
to 15 year period as contributions are made to the benefit plans. The most
significant portion of future expense reductions will consist of savings of
employee compensation and benefits due to a reduction in employees.

3. Cash, Loan and Dividend Restrictions
The Banks are required to maintain reserves against customer deposits by
keeping balances with the Federal Reserve Bank in a noninterest-bearing account.
The average amount of those reserve balances for the year ended December 31,
1994 was approximately $186 million.

National and state banking laws and regulations place certain restrictions
on loans or advances made by the banking subsidiaries to members of the
affiliated group, including the parent company, and also place restrictions on
dividends paid by the subsidiary banks.

47
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. Cash, Loan and Dividend Restrictions (Continued)
National banks can initiate dividend payments in a given year, without prior
regulatory approval, equal to net profits, as defined, for that year plus
retained net profits for the preceding two years. The subsidiary banks can
distribute as dividends to the parent company in 1995 (in addition to their 1995
net income) approximately $210 million. Loans from a bank to a single affiliate
may not exceed 10 percent of the bank's equity capital, as defined. At December
31, 1994, the total amount that could be loaned to the parent company by its
banking subsidiaries was approximately $231 million. As a result of the above
regulatory restrictions, net assets of the subsidiary banks not available for
dividends or loans amounted to approximately $1.46 billion.

4. Loans and Allowance for Credit Losses
Loans and lease financing are comprised of the following categories:

<TABLE>
<CAPTION>
December 31,
----------------------
1994 1993
---------- ----------
(In Millions)
<S> <C> <C>
Loans
Commercial................................................................... $ 7,384.6 $ 6,796.8
Foreign...................................................................... 49.8 96.3
Real estate construction..................................................... 667.2 699.9
Real estate mortgage......................................................... 2,946.5 2,611.2
Consumer..................................................................... 3,738.0 3,198.4
---------- ----------
Total loans................................................................ 14,786.1 13,402.6
---------- ----------
Lease financing
Lease receivables............................................................ 793.8 761.1
Estimated residual value..................................................... 201.1 189.1
Unearned income.............................................................. (175.3) (184.3)
---------- ----------
Lease financing, net of unearned income...................................... 819.6 765.9
---------- ----------
Total loans and leases......................................................... $ 15,605.7 $ 14,168.5
---------- ----------
---------- ----------
</TABLE>

U. S. Bancorp's loan classifications for financial reporting differ from
those for regulatory reporting. Loans are classified based on type of collateral
securing the loans for regulatory purposes. Loan classifications for financial
reporting purposes are based on the purpose and primary source of repayment of
the loans.

The minimum future lease payments related to direct finance receivables for
each of the years 1995 through 1999 are $238 million, $206 million, $146
million, $98 million and $50 million, respectively.

The following table summarizes the changes in the allowance for credit
losses.

<TABLE>
<CAPTION>
1994 1993 1992
---------- -------------- ----------
(In Thousands)
<S> <C> <C> <C>
Balance, beginning of year..................................... $ 270,229 $ 259,155 $ 230,101
Acquisitions (dispositions).................................... (1,241) 322 7,515
Provision for credit losses.................................... 106,868 92,851 134,454
Net charge-offs................................................ (70,054) (82,099) (112,915)
---------- -------------- ----------
Balance, end of year........................................... $ 305,802 $ 270,229 $ 259,155
---------- -------------- ----------
---------- -------------- ----------
</TABLE>

48
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4. Loans and Allowance for Credit Losses (Continued)
SFAS No. 114, "Accounting by Creditors for Impairment of a Loan," issued in
May 1993 and SFAS No. 118, an amendment of SFAS No. 114 issued in October 1994,
require adoption no later than January 1, 1995. These statements require each
impaired loan within its scope to be measured based on the present value of
expected future cash flows discounted at the loan's effective interest rate or,
as a practical expedient, at the loan's observable market price or the fair
value, less expected costs of disposal, of the collateral if the loan is
collateral dependent.

U. S. Bancorp does not anticipate that the January 1, 1995 adoption of SFAS
No. 114 and No. 118 will have a material effect on its results of operations or
financial condition.

5. Related Parties
The Banks have granted loans to the officers and directors of U. S. Bancorp
and to their associates. These related party loans are made in the ordinary
course of business and, management believes, do not involve more than a normal
risk of collectibility. The aggregate dollar amount of these loans was $90.1
million and $112.4 million at December 31, 1994 and 1993, respectively. During
1994, $90.7 million of new loans were made and repayments totaled $113.0
million.

6. Securities
The amortized cost and approximate fair value of securities available for
sale were as follows:
<TABLE>
<CAPTION>
December 31, 1994
----------------------------------------------------
Amortized Unrealized Unrealized
Cost Gains Losses Fair Value
------------ ----------- ----------- ------------
(In Thousands)
<S> <C> <C> <C> <C>
U.S. Treasury obligations..................................... $ 655,662 $ 67 $ 25,036 $ 630,693
U.S. government agency securities............................. 25,056 -- 61 24,995
Mortgage-backed securities.................................... 470,112 229 31,678 438,663
Collateralized mortgage obligations........................... 92,073 -- 4,420 87,653
Equity and other securities................................... 168,861 24,996 6,424 187,433
------------ ----------- ----------- ------------
$ 1,411,764 $ 25,292 $ 67,619 $ 1,369,437
------------ ----------- ----------- ------------
------------ ----------- ----------- ------------

December 31, 1993
----------------------------------------------------
Amortized Unrealized Unrealized
Cost Gains Losses Fair Value
------------ ----------- ----------- ------------
(In Thousands)
<S> <C> <C> <C> <C>
U.S. Treasury obligations..................................... $ 915,192 $ 14,788 $ 407 $ 929,573
U.S. government agency securities............................. 26,499 242 -- 26,741
Mortgage-backed securities.................................... 428,935 6,137 1,038 434,034
Collateralized mortgage obligations........................... 123,430 401 1,140 122,691
Equity and other securities................................... 152,851 15,130 4,078 163,903
------------ ----------- ----------- ------------
$ 1,646,907 $ 36,698 $ 6,663 $ 1,676,942
------------ ----------- ----------- ------------
------------ ----------- ----------- ------------
</TABLE>

49
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. Securities (Continued)
The amortized cost and fair value of securities available for sale by
remaining contractual maturity are shown below. Expected maturities of
mortgage-backed securities and collateralized mortgage obligations will differ
from contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties. Equity
securities were included in the table below as due after ten years.

<TABLE>
<CAPTION>
December 31, 1994
--------------------------
Amortized
Cost Fair Value
------------ ------------
(In Thousands)
<S> <C> <C>
Due in one year or less.................................................... $ 221,911 $ 220,613
Due after one year through five years...................................... 521,743 497,820
Due after five years through ten years..................................... 10,661 10,125
Due after ten years........................................................ 657,449 640,879
------------ ------------
$ 1,411,764 $ 1,369,437
------------ ------------
------------ ------------
</TABLE>

In 1994, gains of $827,000 and losses of $8,972,000 were realized on sales
of securities available for sale. During 1993, gross gains of $4,000 were
realized. The net unrealized gain or loss on securities available for sale, net
of income taxes, was included as a component of shareholders' equity.

The amortized cost and approximate fair value of securities held to maturity
were as follows:
<TABLE>
<CAPTION>
December 31, 1994
----------------------------------------------------
Amortized Unrealized Unrealized
Cost Gains Losses Fair Value
------------ ----------- ----------- ------------
(In Thousands)
<S> <C> <C> <C> <C>
U.S. Treasury obligations..................................... $ 9,966 $ -- $ 221 $ 9,745
U.S. government agency securities............................. 116,171 -- 7,958 108,213
Mortgage-backed securities.................................... 290,506 1,108 12,395 279,219
Collateralized mortgage obligations........................... 519,405 76 25,810 493,671
State and municipal bonds..................................... 349,714 3,022 16,650 336,086
Other securities.............................................. 119,073 -- 3,369 115,704
------------ ----------- ----------- ------------
$ 1,404,835 $ 4,206 $ 66,403 $ 1,342,638
------------ ----------- ----------- ------------
------------ ----------- ----------- ------------

December 31, 1993
----------------------------------------------------
Amortized Unrealized Unrealized
Cost Gains Losses Fair Value
------------ ----------- ----------- ------------
(In Thousands)
<S> <C> <C> <C> <C>
U.S. Treasury obligations..................................... $ 162,677 $ 1,766 $ -- $ 164,443
U.S. government agency securities............................. 142,228 249 704 141,773
Mortgage-backed securities.................................... 395,588 13,013 182 408,419
Collateralized mortgage obligations........................... 486,083 3,171 387 488,867
State and municipal bonds..................................... 371,779 16,649 1,333 387,095
Other securities.............................................. 178,203 1,491 205 179,489
------------ ----------- ----------- ------------
$ 1,736,558 $ 36,339 $ 2,811 $ 1,770,086
------------ ----------- ----------- ------------
------------ ----------- ----------- ------------
</TABLE>

50
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. Securities (Continued)
The amortized cost and fair value of securities held to maturity by
remaining contractual maturity are shown below. Expected maturities of
mortgage-backed securities and collateralized mortgage obligations will differ
from contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
December 31, 1994
--------------------------
Amortized
Cost Fair Value
------------ ------------
(In Thousands)
<S> <C> <C>
Due in one year or less..................................................... $ 35,205 $ 35,356
Due after one year through five years....................................... 228,683 225,133
Due after five years through ten years...................................... 377,334 362,561
Due after ten years......................................................... 763,613 719,588
------------ ------------
$ 1,404,835 $ 1,342,638
------------ ------------
------------ ------------
</TABLE>

Interest earned on securities held to maturity for the last three years was
as follows:

<TABLE>
<CAPTION>
1994 1993 1992
---------- ---------- ----------
(In Thousands)
<S> <C> <C> <C>
Taxable investment securities....................................... $ 74,050 $ 181,596 $ 140,750
Tax-exempt investment securities.................................... 21,292 20,718 22,632
---------- ---------- ----------
$ 95,342 $ 202,314 $ 163,382
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

In 1994, there were no sales of securities held to maturity. During 1993 and
1992, gross gains were realized of $7,000 and $438,000, respectively.

At December 31, 1994 and 1993, the Banks pledged securities and loans
aggregating $1.9 billion and $1.5 billion, respectively, to secure certain
public and trust deposits and for other purposes as required or permitted by
law.

7. Premises, Furniture and Equipment
A summary of premises, furniture and equipment is as follows:

<TABLE>
<CAPTION>
December 31,
----------------------
1994 1993
---------- ----------
(In Thousands)
<S> <C> <C>
Land........................................................................ $ 57,935 $ 59,431
Buildings................................................................... 359,753 351,684
Leasehold improvements...................................................... 110,762 98,415
Furniture and equipment..................................................... 404,665 373,781
Property under capital leases (principally premises)........................ 9,192 9,484
---------- ----------
Total................................................................... 942,307 892,795
Less accumulated depreciation and amortization.............................. (397,606) (359,745)
---------- ----------
Premises, furniture and equipment -- net.................................. $ 544,701 $ 533,050
---------- ----------
---------- ----------
</TABLE>

Capital lease amortization expense is included in net occupancy expense.
Accumulated amortization of capital leases was $4.9 million and $4.8 million at
December 31, 1994 and 1993, respectively.

51
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8. Lease Obligations
Future minimum lease payments as of December 31, 1994 are shown below.

<TABLE>
<CAPTION>
Capital Operating
Leases Leases
--------- ----------
(In Thousands)
<S> <C> <C>
1995............................................................................ $ 873 $ 28,133
1996............................................................................ 867 24,355
1997............................................................................ 864 21,330
1998............................................................................ 827 13,909
1999............................................................................ 827 11,190
Later years..................................................................... 3,234 64,647
--------- ----------
Total minimum payments.......................................................... $ 7,492 $ 163,564
----------
----------
Amount representing interest.................................................... 2,282
---------
Present value of net minimum lease payments..................................... $ 5,210
---------
---------
</TABLE>

A majority of the leases apply to the Banks' premises and provide for
renewal options for periods of up to 20 years. Total rental expense under
operating leases was $45.9 million, $42.9 million and $39.2 million for 1994,
1993 and 1992, respectively.

9. Income Taxes
The provision for income taxes attributable to income before cumulative
effect of accounting changes for the last three years consisted of the
following:

<TABLE>
<CAPTION>
1994 1993 1992
---------- ---------- ---------
(In Thousands)
<S> <C> <C> <C>
Current
Federal................................................................ $ 94,815 $ 77,441 $ 60,454
State.................................................................. 12,410 13,420 6,904
---------- ---------- ---------
107,225 90,861 67,358
---------- ---------- ---------
Deferred
Federal................................................................ (38,612) 33,519 23,192
State.................................................................. (4,012) 1,920 1,998
---------- ---------- ---------
(42,624) 35,439 25,190
---------- ---------- ---------
Total
Federal................................................................ 56,203 110,960 83,646
State.................................................................. 8,398 15,340 8,902
---------- ---------- ---------
$ 64,601 $ 126,300 $ 92,548
---------- ---------- ---------
---------- ---------- ---------
</TABLE>

52
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9. Income Taxes (Continued)
A reconciliation between the statutory federal income tax rate and the
effective rate is as follows:

<TABLE>
<CAPTION>
1994 1993 1992
------ ------ ------
<S> <C> <C> <C>
Federal statutory rate................... 35.0% 35.0% 34.0%
Adjusted for:
State income tax....................... 2.5 2.9 2.2
Tax-exempt interest.................... (8.5) (5.1) (6.6)
Nondeductible expenses................. 2.5 1.1 1.3
Credits................................ (3.1) (1.7) --
Other-net.............................. 1.5 .7 (.1)
------ ------ ------
Effective income tax rate................ 29.9% 32.9% 30.8%
------ ------ ------
------ ------ ------
</TABLE>

Accrued income taxes at December 31, 1994 and 1993 consisted of:

<TABLE>
<CAPTION>
1994 1993
--------- ----------
(In Thousands)
<S> <C> <C>
Current.............................................................................. $ 12,321 $ 9,572
Deferred............................................................................. 34,924 105,124
--------- ----------
$ 47,245 $ 114,696
--------- ----------
--------- ----------
</TABLE>

The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and deferred tax liabilities at December 31,
1994 and 1993 are presented below:

<TABLE>
<CAPTION>
1994 1993
---------- ----------
(In Thousands)
<S> <C> <C>
Deferred tax assets:
Allowance for credit losses............................................................. $ 102,405 $ 88,439
Deferred income......................................................................... 14,670 11,584
Postretirement/employment benefits...................................................... 40,392 34,439
Unrealized gains/losses................................................................. 7,593 8,154
Nonaccrued interest..................................................................... 1,723 8,629
Deferred liabilities.................................................................... 4,149 4,352
Accrued expenses........................................................................ 10,941 6,330
Retirement plan......................................................................... 2,254 --
Restructuring charge.................................................................... 8,610 --
Unrealized depreciation on securities available for sale................................ 15,668 --
Other................................................................................... 10,550 5,898
---------- ----------
218,955 167,825
---------- ----------
Deferred tax liabilities:
Lease financing......................................................................... 64,677 73,805
Leveraged leases........................................................................ 144,934 131,924
Accumulated depreciation................................................................ 28,317 32,370
Cash basis tax accounting............................................................... 4,650 4,939
Retirement plans........................................................................ -- 8,118
Unrealized appreciation on securities available for sale................................ -- 11,908
Equity investments...................................................................... 7,462 --
Other................................................................................... 3,839 9,885
---------- ----------
253,879 272,949
---------- ----------
Net deferred tax liability................................................................ $ 34,924 $ 105,124
---------- ----------
---------- ----------
</TABLE>

53
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9. Income Taxes (Continued)
In 1994, U. S. Bancorp recorded a tax benefit of approximately $3.1 million
related to losses on sale of securities available for sale. Taxes related to
gains on the sale of securities were $4,000 and $170,000 in 1993 and 1992,
respectively.

10. Credit Arrangements
At December 31, 1994, committed line of credit arrangements totaling $165
million were available to U. S. Bancorp from unaffiliated banks. Such lines
generally provide for interest at the lending bank's prime rate or other money
market rates. These banking arrangements principally serve as commercial paper
back-up lines. There were no borrowings outstanding or compensating balance
requirements under these credit arrangements at December 31, 1994. During 1994,
U. S. Bancorp paid commitment fees ranging from .10 percent to .20 percent of
the lines.

11. Long-Term Debt
Long-term debt is summarized as follows:

<TABLE>
<CAPTION>
December 31,
------------------------
1994 1993
---------- ------------
(In Thousands)
<S> <C> <C>
U. S. Bancorp (Parent Company Only):
Medium-term notes due 1995-1998....................................................... $ 331,600 $ 423,800
8.875% notes due 1994................................................................. -- 74,916
8.125% notes due 2002................................................................. 149,220 149,114
7.00% notes due 2003.................................................................. 149,694 149,656
---------- ------------
630,514 797,486
---------- ------------
Banks:
Bank notes due 1995................................................................... 221,000 152,000
FHLB notes due 1995-2009.............................................................. 127,184 84,965
7.75% notes due 2002.................................................................. 15,705 15,705
Mortgages and other notes payable..................................................... 467 1,422
---------- ------------
364,356 254,092
---------- ------------
$ 994,870 $ 1,051,578
---------- ------------
---------- ------------
</TABLE>

U. S. BANCORP (PARENT COMPANY ONLY)

All long-term debt of the parent company is unsecured. The medium-term notes
have fixed or variable rates ranging from 4.41% to 9.21% at December 31, 1994.

The 8.125% notes due in 2002 and 7% notes due in 2003 are subordinated to
all senior indebtedness of U. S. Bancorp. The notes are not redeemable by U. S.
Bancorp, in whole or in part, prior to maturity and do not provide for a sinking
fund.

At December 31, 1994, U. S. Bancorp had $500 million borrowing capacity
under a $500 million subordinated shelf registration filed in 1993. In addition,
$648.2 million was available under an $800 million debt shelf registration filed
in 1991, of which $500 million has been designated as medium-term notes.

BANKS

The bank notes, issued by U. S. Bank of Oregon and U. S. Bank of Washington
are primarily floating rate, unsecured notes with rates ranging from 5.40% to
6.09% at December 31, 1994. U. S. Bank of Oregon and U. S. Bank of Washington
together have $779 million remaining uncommitted capacity at December 31, 1994,
under a $1 billion bank note continuous offering.

54
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11. Long-Term Debt (Continued)
U. S. Bancorp's subsidiaries, U. S. Savings Bank of Washington and Heart
Federal Savings and Loan Association, borrow from the Federal Home Loan Banks of
Seattle and San Francisco. These banking subsidiaries pledge certain real estate
loans and investment securities as collateral for these secured notes. Interest
rates ranged from 5.05% to 8.10% at December 31, 1994.

The 7.75% notes due in 2002 are subordinated to deposits and certain other
liabilities of U. S. Bank of Oregon and require annual sinking fund payments.
Prepayments made in prior years have been used as credits against the mandatory
annual sinking fund requirements through 1996 and part of 1997. The notes
require additional sinking fund payments of $80,000 in 1997 and $625,000 in each
following year. The notes, which are unsecured, may be redeemed at par, in whole
or in part, at the option of U. S. Bank of Oregon with the approval of the
Comptroller of the Currency.

Mortgages and other notes payable are primarily mortgages on bank premises.
Interest rates range from 7.5% to 12% and remaining maturities vary.

Payments required to service U. S. Bancorp's long-term debt during the next
five years were as follows: 1995 - $494 million; 1996 - $58 million; 1997 - $86
million; 1998 - $23 million and 1999 - $4 million.

12. Employee Benefit Plans

RETIREMENT PLANS

U. S. Bancorp provides a noncontributory trusteed defined benefit pension
plan (Pension Plan) which covers substantially all employees. Benefit plans of
companies acquired are generally terminated, with employees covered by those
plans merged into U. S. Bancorp plans. Benefits are based on years of service
and highest average level of compensation for any five consecutive years out of
the last ten years of service. U. S. Bancorp's funding policy is to contribute
annually an amount between the minimum required under ERISA and the maximum
amount that is deductible for income tax purposes. Such contributions are
intended to provide not only for benefits attributed to service to date, but
also for those expected to be earned in the future.

U. S. Bancorp also maintains separate unfunded supplemental pension plans
(Supplemental Plans) that provide certain officers with defined pension benefits
in excess of limits imposed by federal tax law on benefit payments from
qualified plans and for certain compensation not covered in the Pension Plan.

55
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Employee Benefit Plans (Continued)
The following table sets forth the pension plans' status and amounts
recognized in U. S. Bancorp's consolidated financial statements at December 31,
1994 and 1993.

<TABLE>
<CAPTION>
1994 1993
------------------------ -------------------------
Pension Supplemental Pension Supplemental
Plan Plans Plan Plans
---------- ------------ ---------- -------------
(In Thousands)
<S> <C> <C> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation.................................. $ 227,130 $ 13,961 $ 205,435 $ 6,615
---------- ------------ ---------- -------------
---------- ------------ ---------- -------------
Accumulated benefit obligation............................. $ 239,290 $ 14,136 $ 223,299 $ 7,082
---------- ------------ ---------- -------------
---------- ------------ ---------- -------------
Projected benefit obligation................................. $ 304,569 $ 15,849 $ 296,284 $ 7,836
Plan assets at fair value.................................... 310,625 -- 305,930 --
---------- ------------ ---------- -------------
Projected benefit obligation (in excess of) or less than plan
assets...................................................... 6,056 (15,849) 9,646 (7,836)
Unrecognized net (gain) loss from past experience different
from that assumed and effects of changes in assumptions..... 8,626 (180) 24,686 1,822
Unrecognized prior service cost.............................. 4,551 3,407 7,896 1,258
Additional minimum liability................................. -- (2,592) -- (3,673)
Unrecognized net transition (asset) obligation at January 1,
1986........................................................ (10,592) 1,078 (14,122) 1,347
---------- ------------ ---------- -------------
Prepaid pension cost (pension liability)..................... $ 8,641 $ (14,136) $ 28,106 $ (7,082)
---------- ------------ ---------- -------------
---------- ------------ ---------- -------------
</TABLE>

Pension plan assets are invested approximately 70 percent in common stock
and equity mutual funds and 30 percent in a fixed income mutual fund.

Pension cost for the Pension Plan and Supplemental Plans included the
following components:

<TABLE>
<CAPTION>
Pension Plan Supplemental Plans
------------------------------- -------------------------------
1994 1993 1992 1994 1993 1992
--------- --------- --------- --------- --------- ---------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Service cost -- benefits earned during the
period........................................... $ 15,116 $ 13,614 $ 10,748 $ 168 $ 31 $ 127
Interest cost on projected benefit obligation..... 22,761 20,942 19,226 1,302 542 514
Net amortization and deferrals.................... (24,916) 11,435 3,490 720 454 414
Less return on plan assets........................ (2,273) (36,482) (26,065) -- -- --
--------- --------- --------- --------- --------- ---------
Net periodic pension cost......................... $ 10,688 $ 9,509 $ 7,399 $ 2,190 $ 1,027 $ 1,055
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
</TABLE>

In determining the projected benefit obligation the assumed discount rate
used was 8.5 percent at December 31, 1994, and 7.25 percent and 8.5 percent at
December 31, 1993 and 1992, respectively. The assumed rate of increase in future
salary levels ranged from 5 percent to 9.5 percent. The expected long-term rate
of return on assets used in determining net periodic pension cost was 9 percent.
As a result of the sale of the mortgage subsidiary's loan production offices and
the termination of employees through the restructuring program, U. S. Bancorp
recognized pension curtailment gains totaling $6.5 million in 1994.

EMPLOYEE INVESTMENT PLAN

U. S. Bancorp sponsors an Employee Investment Plan which allows qualified
employees, at their option, to make contributions of up to certain percentages
of pretax base salary through salary deductions under Section 401(k) of the
Internal Revenue Code. A portion of these contributions is matched by U. S.
Bancorp. All

56
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Employee Benefit Plans (Continued)
of U. S. Bancorp's matching contributions are invested in U. S. Bancorp common
stock. Employee contributions are invested, at the employees' direction, among a
variety of investment alternatives. Total expenses associated with the Employee
Investment Plan were $6.9 million, $9.3 million and $7.4 million in 1994, 1993
and 1992, respectively.

OTHER POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS

U. S. Bancorp has a benefit plan which provides postretirement health
benefits to all employees who have attained the age of 55 and have at least 10
years of service. Retiree health care benefits are offered under self-insured
plans. For any employee retiring on or after July 1, 1993, the plan is
contributory, with retirees' contributions adjusted annually to reflect certain
cost-sharing provisions and benefit limitations. Retirees prior to July 1, 1993,
are covered under a plan that is noncontributory for retirees and contributory
for dependents. In 1992, U. S. Bancorp adopted SFAS No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions" and elected to
immediately recognize the accumulated postretirement benefit obligation measured
as of January 1, 1992, reducing income on an after-tax basis by $54.9 million.
U. S. Bancorp reserves the right to terminate the plan or make plan changes at
any time.

U. S. Bancorp also provides postemployment benefits other than retirement
benefits to former or inactive employees, their beneficiaries and covered
dependents. Those benefits include, but are not limited to, salary continuation,
supplemental unemployment benefits, severance benefits, disability-related
benefits (including workers' compensation), job training and counseling, and
continuation of benefits such as health care benefits and life insurance
coverage. In 1992, U. S. Bancorp adopted SFAS No. 112 "Employers' Accounting for
Postemployment Benefits." This accounting change reduced income on an after-tax
basis by $5.0 million.

The following table sets forth the status of the plan, reconciled with
amounts recognized in U. S. Bancorp's balance sheet at December 31, 1994, and
1993.

<TABLE>
<CAPTION>
1994 1993
---------- ----------
(In Thousands)
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees................................................................................ $ 96,924 $ 73,589
Fully eligible active plan participants................................................. 348 583
Other active participants............................................................... 4,118 26,808
---------- ----------
101,390 100,980
Unrecognized prior service cost........................................................... 16,312 --
Unrecognized net loss from past experience different from that assumed and the effects of
changes in assumptions................................................................... (20,941) (13,216)
---------- ----------
Accrued postretirement benefit liability.................................................. $ 96,761 $ 87,764
---------- ----------
---------- ----------
</TABLE>

The net periodic postretirement benefit cost for 1994, 1993 and 1992
included the following components:

<TABLE>
<CAPTION>
1994 1993 1992
--------- --------- ---------
(In Thousands)
<S> <C> <C> <C>
Service cost......................................................................... $ 1,297 $ 1,487 $ 1,023
Interest cost on accumulated postretirement benefit obligation....................... 7,448 6,932 6,457
Net amortization of deferrals........................................................ 315 -- --
--------- --------- ---------
Net periodic postretirement benefit cost............................................. $ 9,060 $ 8,419 $ 7,480
--------- --------- ---------
--------- --------- ---------
</TABLE>

57
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. Employee Benefit Plans (Continued)
The assumed discount rate used in determining the accumulated postretirement
benefit obligation was 8.5 percent at December 31, 1994, and 7.25 percent and
8.5 percent at December 31, 1993 and 1992, respectively. The 1994 health care
trend rate was projected to be 11.5 percent for pre-65 participants and 8.5
percent for post-65 participants. These rates are assumed to decrease gradually
until they reach 6 percent in the year 2001 and remain at that level thereafter.

Increasing the assumed health care cost trend rates by one percentage point
in each year would increase the accumulated postretirement benefit obligation as
of January 1, 1994 by $5.6 million and the aggregate of the service and interest
components of net periodic postretirement cost for 1994 by $457,000.

STOCK INCENTIVE PLANS

U. S. Bancorp maintains various stock incentive plans which provide for its
ability to grant stock options, stock appreciation rights, restricted share
awards, performance shares and other stock-based awards to directors, officers
and key employees. Under the terms of the employee and officer option
agreements, the option price is the fair market value at the time the option is
granted; the option period cannot exceed ten years from the grant date; and
options are exercisable under two vesting structures. Under the first structure,
options are exercisable 50 percent after one year, 80 percent after two years,
and 100 percent after three years. Under the second structure, options are
exercisable on the ninth anniversary of the grant date subject to acceleration
based on achievement of certain performance goals. Non-employee directors may
elect to acquire "deferred compensation options" in lieu of fees otherwise due
for board services and may exercise those options after six months. Deferred
compensation options granted to non-employee directors are issued at 40 percent
of market price on grant date. Upon exercise, all option proceeds are credited
to the capital accounts.

Stock option activity is summarized in the following table:

<TABLE>
<CAPTION>
Number of Option Price Per
Shares Share
--------- ----------------
<S> <C> <C>
Outstanding at January 1,
1992......................... 3,018,088 $ 3.42 to $22.50
Grants...................... 47,390 8.25 to 22.63
Options exercised........... (715,322) 3.42 to 16.33
Forfeited or cancelled...... (10,908) 3.42 to 11.33
---------
Outstanding at December 31,
1992......................... 2,339,248 3.42 to 22.63
Grants...................... 760,834 9.40 to 26.13
Options exercised........... (258,157) 3.42 to 16.33
Forfeited or cancelled...... (4,610) 8.29 to 11.33
---------
Outstanding at December 31,
1993......................... 2,837,315 3.42 to 26.13
Grants...................... 774,797 9.65 to 27.25
Options exercised........... (737,875) 3.42 to 25.88
Forfeited or cancelled...... (33,000) 25.88 to 26.00
---------
Outstanding at December 31,
1994......................... 2,841,237 3.42 to 27.25
---------
---------
</TABLE>

Performance shares are earned only if specified performance goals are
attained during a designated performance cycle. Earned performance shares
are paid at the end of the performance cycle in shares of common stock or a
combination of cash and shares. As of December 31, 1994, 51,460 performance
shares have been granted and none have been paid.

Exercisable options totaled 1,783,373, 2,088,892 and 2,006,142 at December
31, 1994, 1993 and 1992, respectively. At December 31, 1994, shares of common
stock reserved for issuance under all stock incentive plans totaled 9,012,537.

58
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13. Mortgage Banking Activities
On August 11, 1994, a significant portion of the assets of U. S. Bancorp's
subsidiary, U. S. Bancorp Mortgage Company, was sold. The assets sold included
$3.6 billion of the $4.3 billion residential mortgage loan servicing portfolio
and 50 loan origination offices in 10 states. This sale resulted in a pretax
gain of $50.8 million in the third quarter of 1994. U. S. Bancorp intends to
continue to originate mortgage loans through the branches of the bank
subsidiaries and a loan by phone program.

Changes in mortgage loan servicing rights purchased for the last three years
were as follows:

<TABLE>
<CAPTION>
1994 1993 1992
--------- --------- ---------
(In Millions)
<S> <C> <C> <C>
Balance, beginning of year.............................................................. $ 1.9 $ 35.3 $ 54.5
Purchases............................................................................... 0.7 2.8 1.9
Sales................................................................................... (2.8) (13.5) (1.6)
Amortization............................................................................ (1.3) (6.9) (11.9)
Hedge reserve........................................................................... 2.0 (2.0) --
Valuation adjustments due to changes in prepayment assumptions.......................... (0.5) (13.8) (7.6)
--------- --------- ---------
Balance, end of year.................................................................... $ 0.0 $ 1.9 $ 35.3
--------- --------- ---------
--------- --------- ---------
</TABLE>

Changes in excess servicing fee receivable for the last three years were as
follows:

<TABLE>
<CAPTION>
1994 1993 1992
--------- --------- ---------
(In Millions)
<S> <C> <C> <C>
Balance, beginning of year.............................................................. $ 4.3 $ 20.6 $ 22.9
Capitalized............................................................................. 0.9 4.2 7.1
Sales................................................................................... (2.8) (5.6) --
Amortization............................................................................ (1.9) (5.2) (5.9)
Valuation adjustments due to changes in prepayment assumptions.......................... (0.2) (9.7) (3.5)
--------- --------- ---------
Balance, end of year.................................................................... $ 0.3 $ 4.3 $ 20.6
--------- --------- ---------
--------- --------- ---------
</TABLE>

The capitalization of excess servicing fee receivable and the amortization
and valuation adjustments related to mortgage banking assets are included in
mortgage banking income. Mortgage banking income is shown net of certain other
expenses in the consolidated statement of income.

14. Shareholders' Equity
In April 1994, U. S. Bancorp's Board of Directors approved a plan to
repurchase up to six million shares of U. S. Bancorp common stock over the next
five years. Through December 31, 1994, 2.2 million shares of common stock were
acquired at a cost of $57.1 million.

The Series A Preferred Stock is not redeemable prior to July 23, 1997. On or
after such date, the Series A Preferred Stock will be redeemable, in whole or
part, at the option of U. S. Bancorp at a liquidating preference of $25 per
share plus accrued and unpaid dividends. Under current regulations, U. S.
Bancorp may not exercise its option to redeem the Series A Preferred Stock
without the prior approval of the Federal Reserve Board.

The preferred dividend requirement used in the calculation of earnings per
common share was $12,187,200 for the years 1994 and 1993, and $5,349,000 for
1992.

15. Commitments, Contingencies and Off-Balance Sheet Risk
U. S. Bancorp and certain subsidiaries are defendants in various legal
proceedings. Management, after reviewing these actions and proceedings with
counsel, believes that the outcome of such proceedings will not have a
materially adverse effect upon the consolidated financial position or results of
operations of U. S. Bancorp or its subsidiaries.

59
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. Commitments, Contingencies and Off-Balance Sheet Risk (Continued)
In the normal course of business, U. S. Bancorp uses financial instruments
with off-balance sheet risk to meet the financing needs of its customers and to
reduce its own exposure to fluctuations in interest rates. These financial
instruments include commitments to extend credit, standby letters of credit and
financial guarantees, interest rate caps and floors written, interest rate
swaps, and forward and futures contracts. These instruments involve, to varying
degrees, elements of credit and interest rate risk in excess of the amount
recognized in the consolidated financial statements. The contract or notional
amounts of these instruments do not represent the credit or interest rate risk
associated with these contracts, but rather give an indication of the volume of
the transactions. Unless noted otherwise, U. S. Bancorp does not require
collateral or other security to support financial instruments with off-balance
sheet credit risk.

Credit risk is defined as the possibility of sustaining a loss because the
other parties to a financial instrument fail to perform in accordance with the
terms of the contract. U. S. Bancorp's exposure to credit loss, in the event of
nonperformance by the other party to the financial instrument, for commitments
to extend credit and standby letters of credit and financial guarantees written
is represented by the contractual amount of those instruments. U. S. Bancorp
uses the same credit policies in making commitments and conditional obligations
as it does for on-balance sheet instruments.

The following table summarizes U. S. Bancorp's credit related financial
instruments, which include both commitments to extend credit and letters of
credit, each of which is considered in U. S. Bancorp's liquidity risk management
practices. For these financial instruments, contract amounts represent credit
risk.

<TABLE>
<CAPTION>
Contract or
Notional Amount
--------------------
December 31,
--------------------
1994 1993
--------- ---------
(In Millions)
<S> <C> <C>
Commitments to extend credit................................................................. $ 13,981 $ 12,560
Standby letters of credit and financial guarantees written (net of participations of $60
million and $53 million, respectively)...................................................... 676 572
</TABLE>

Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Commitments
generally have fixed expiration dates or other termination clauses and may
require payment of a fee. The majority of commitments had original maturity
dates of one year or less and represented commitments to make variable rate
loans. Since many of the commitments are expected to expire without being drawn
upon, the total commitment amounts do not necessarily represent future cash
requirements. U. S. Bancorp evaluates each customer's creditworthiness on a
case-by-case basis. The amount of collateral obtained, if deemed necessary by U.
S. Bancorp upon extension of credit, is based on management's credit evaluation
of the counterparty. Collateral held varies but may include deposits held in
financial institutions, marketable securities, accounts receivable, inventory,
property, plant and equipment, and income-producing commercial properties.

Standby letters of credit and financial guarantees written are conditional
commitments issued by U. S. Bancorp to guarantee the performance of a customer
to a third party. These guarantees are primarily issued to support public and
private borrowing arrangements, including state and municipal obligations,
industrial development revenue bonds, corporate debt, and similar transactions.
The credit risk involved in issuing letters of credit and writing financial
guarantees is essentially the same as that involved in extending loan facilities
to customers. Generally, standby letters of credit and financial guarantees
written are not secured, but, when required, collateral may include cash and
securities. Approximately 88 percent of standby letters of credit at December
31, 1994 expire in less than five years and 43 percent in less than one year.

The following table presents a summary of U. S. Bancorp's derivative
financial instruments and their related credit exposure. For these financial
instruments, contract or notional amounts exceed the amount of

60
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. Commitments, Contingencies and Off-Balance Sheet Risk (Continued)
credit risk. Risk of credit loss for these financial instruments involves the
risk of dealing with counterparties and their ability to meet the terms of the
contract. U. S. Bancorp controls the credit risk of these instruments through
credit approvals, limits, and monitoring procedures.

<TABLE>
<CAPTION>
Contract or Notional
Credit Exposure
Amounts
-------------------- --------------------
1994 1993 1994 1993
--------- --------- --------- ---------
(In Millions)
<S> <C> <C> <C> <C>
Financial futures contracts....................................................... $ 939 $ 1,457 $ -- $ --
Interest rate swaps............................................................... 832 1,096 5.3 6.1
Purchased options................................................................. 166 553 1.0 .9
Written options................................................................... 76 85 -- --
Foreign exchange.................................................................. 122 115 .9 .3
Forward commitments to sell mortgage loans........................................ 1 689 -- .6
Mortgage loan options purchased................................................... -- 279 -- --
Mortgage loan servicing prepayment hedge.......................................... -- 1,500 -- .3
--- ---
Total off-balance sheet credit exposure....................................... $ 7.1 $ 8.2
--- ---
--- ---
</TABLE>

Interest rate derivative financial instruments are used to reduce the
interest rate risk of a specific asset or liability position or to adjust a
specific interest rate exposure that is identified by asset/liability management
monitoring processes. Income or expense on most derivative financial instruments
used to manage interest rate exposure is recorded on an accrual basis as an
adjustment to the yield of the related interest rate exposures over the periods
covered by the contracts. If an interest rate swap that is used to manage
interest rate risk is terminated early and the hedged asset remains, any
resulting gain or loss is deferred and amortized as an adjustment to the yield
of the underlying interest rate exposure position over the remaining periods
originally covered by the terminated swap. Deferred losses on the early
termination of interest rate swaps used to manage interest rate risk totaled
$560,000 as of December 31, 1994. This amount is scheduled to be amortized into
income in the following periods: $169,000 in 1995; $148,000 in 1996; $139,000 in
1997; and $104,000 thereafter.

Not all derivative financial instruments have off-balance sheet credit
and/or interest rate risk. Options written, including caps and floors written,
do not expose U. S. Bancorp to credit risk, except as noted below, since the
counterparty has already performed according to the terms of the contract by
paying a premium up front. However, credit risk arises to the extent that the
underlying instrument that U. S. Bancorp is obligated to buy is subject to
credit risk.

Financial futures contracts are contracts for delayed delivery of securities
or money market instruments in which the seller agrees to make delivery at a
specified future date of a specified instrument, at a specified price or yield.
Initial margin requirements are met in cash or other instruments, and changes in
the contract values are settled daily. Futures contracts have little credit risk
because futures exchanges are the counterparties. These contracts have
maturities through March 2003.

Futures contracts are purchased to hedge market price risks of variable rate
loans and variable rate liabilities that are not covered by swap positions.
Futures contracts are sold to hedge market price risks of interest rate caps
written for customers, mortgage-backed securities in the available for sale
portfolio, and certain investments held for trading purposes.

Interest rate swap transactions generally involve the exchange of fixed and
floating rate interest payment obligations without the exchange of the
underlying principal amounts. Interest rate swaps are principally used to hedge
interest rate risk related to LIBOR-based floating rate loans and variable rate
liabilities such as certificates of deposit and term funds purchased.
Additionally, interest rate swaps, with notional amounts totaling $68 million,
were entered into as customer accommodations and were included in the balance
disclosed

61
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. Commitments, Contingencies and Off-Balance Sheet Risk (Continued)
in the table. Of this total, $63.5 million was matched by interest rate swaps
with major financial institutions. Gains and losses related to customer swaps
are not material. The current credit exposure on interest rate swaps is the
replacement cost in the event of nonperformance by counterparties for those
contracts in a gain position.

At December 31, 1994, U. S. Bancorp paid a fixed rate ranging from 4.21
percent to 8.48 percent and received a variable rate ranging from 5.31 percent
to 7.70 percent on interest rate swaps with notional amounts totaling $768
million. For those transactions where U. S. Bancorp received a fixed rate and
paid a variable rate, the fixed rate ranged from 3.82 percent to 9.75 percent
and the variable rate ranged from 5.1825 percent to 8.025 percent. The notional
amounts of such agreements totaled $64 million at December 31, 1994. The swap
agreements have original terms to maturity of one to ten years and remaining
terms to maturity of five months to nine years.

U. S. Bancorp acts as a principal in writing interest rate caps and floors
for customers. Purchased and written options primarily represent interest rate
caps and floors. These interest rate caps and floors enable customers to
transfer, modify, or reduce their interest rate risk and obligate one of the
parties to make payments if an interest rate index exceeds a specified upper
"capped" level or if the index falls below a specified lower "floor" level. As
principal, U. S. Bancorp is exposed to loss should a counterparty fail to
perform as agreed. Normal credit reviews on each counterparty are performed, and
exposure to the interest rate risk inherent in these items is managed by
entering into offsetting positions or other hedging techniques. Credit risk
exists for purchased options and is measured as the replacement cost in the
event of nonperformance by counterparties for those contracts in a gain
position, plus an amount for residual credit risk. Interest rate caps and floors
have maturities ranging from 1995 to the year 2000.

Foreign exchange contracts, or forward commitments to purchase and sell
foreign currencies, are agreements for delayed delivery of a foreign currency in
which the buyer agrees to purchase and the seller agrees to deliver, at a
specified future date, a specified amount at a specified exchange rate. U. S.
Bancorp is party to foreign exchange spot and forward contracts to meet the
needs of its customers. Customer transactions are generally covered by
offsetting positions to reduce risk arising from fluctuations in exchange rates.
Foreign exchange contracts generally relate to major foreign currencies and are
highly liquid. The foreign exchange contracts have original terms to maturity of
twelve months or less. Credit exposure for foreign exchange contracts is equal
to the unrealized gains in such contracts.

In conjunction with U. S. Bancorp's mortgage loan operations,
mortgage-backed securities are sold for delivery in future months, and over the
counter options on mortgage-backed securities are purchased to hedge closed
mortgage loans and to hedge interest rate guarantee commitments for unclosed
mortgage loans. Mortgage related derivative activities have been reduced
significantly since 1993 as a result of the sale of the majority of U. S.
Bancorp's mortgage operations in 1994.

To hedge prepayment risk in its mortgage loan servicing portfolio, U. S.
Bancorp entered into a hedging contract in 1993 with a notional amount of $1.5
billion, scheduled to terminate in September 1998. This contract was terminated
in 1994 and a loss recognized in earnings simultaneously with the sale of the
majority of U. S. Bancorp's purchased mortgage loan servicing rights portfolio.

Most of U. S. Bancorp's lending activity is with customers located within
the Pacific Northwest. An economic downturn in the Pacific Northwest would
likely have a negative impact on U. S. Bancorp's results of operations depending
on the severity of the downturn. U. S. Bancorp maintains a diversified portfolio
and does not have significant on- or off-balance sheet concentrations of credit
risk in any one industry.

16. Disclosures About Fair Value of Financial Instruments
The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of Statement of
Financial Accounting Standards No. 107, "Disclosures About Fair Value of
Financial Instruments". The estimated fair value amounts have been determined
using available market

62
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

16. Disclosures About Fair Value of Financial Instruments (Continued)
information and appropriate valuation methodologies. However, considerable
judgment is necessarily required to interpret market data to develop the
estimates of fair value. Accordingly, the estimates presented herein are not
necessarily indicative of the amounts U. S. Bancorp could realize in a current
market exchange. The use of different market assumptions and/or estimation
methodologies may have a material effect on the estimated fair value amounts.

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to estimate
that value. Potential tax ramifications related to the realization of unrealized
gains and losses that would be incurred in an actual sale and/or settlement have
not been taken into consideration.

CASH AND SHORT-TERM INVESTMENTS. For these short-term instruments, the
carrying amount is a reasonable estimate of fair value.

SECURITIES AND EQUITY INVESTMENTS. For securities held to maturity,
available for sale, or for trading purposes, fair value equals quoted market
price or dealer quotes. If quoted market price is not available, fair value is
estimated using quoted market prices for similar securities with like
maturities, interest rate and type.

The fair value of $44 million and $27 million at December 31, 1994 and 1993,
respectively, of various investments in limited partnership equity investments
was not available through market sources, and was not practicable to estimate.
In such cases, fair value indicated was equal to carrying value.

LOANS. Fair values are estimated for portfolios of loans with similar
financial characteristics. Loans are segregated by type, such as commercial,
real estate, including residential mortgage, consumer and bank card. Each loan
category is further segregated by fixed and variable rate, performing and
nonperforming categories. For variable rate loans, carrying value approximates
fair value. Fair value of fixed rate loans is calculated by discounting
contractual cash flows.

For performing fixed rate loans, the discount rate is estimated using the
rates currently offered for loans of similar characteristics which reflect the
credit and interest rate risk inherent in the loan. Performing loans include
certain loans that are internally classified largely due to weakening financial
strength of the borrowers or concern about specific industries. These loans have
been specifically provided for in the allowance for credit losses. The fair
value of these loans is shown net of this allocated allowance. Consumer and bank
card loans have no allocated allowance since they are charged-off upon becoming
90 and 180 days past due, respectively. The fair value of performing fixed rate
loans, except for performing residential mortgage loans and consumer loans, is
calculated by discounting contractual cash flows. For performing residential
mortgage and consumer loans, fair value is estimated by discounting contractual
cash flows adjusted for prepayment estimates. Acceleration of the payment of
principal is based on the monthly cash flow yield as compared to the discount
rate. The prepayment estimates are based upon internal historical data for
consumer loans, and market prepayment history for mortgage-backed securities
with similar characteristics for real estate mortgage loans.

Loans held for sale, primarily residential mortgage loans and student loans,
are carried on the books at the lower of cost or market. The fair value of
mortgage loans is estimated for the various loan portfolios based upon quoted
market prices for securities backed by similar loans. Commitments to sell
residential mortgages, which represent agreements to sell loans to permanent
investors at a specific contractual price or yield, are valued using market
prices for securities backed by similar loans and are reflected in the fair
value of the mortgage loans held for sale, to the extent that these commitments
relate to mortgage loans already originated. The fair value of student loans is
estimated to be equal to the carrying value, as these loans are sold within a
short time of their origin.

Fair value for significant nonperforming loans is primarily based on recent
internal estimates or external appraisals. Fair value for smaller nonperforming
loans is not readily available through market sources as there

63
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

16. Disclosures About Fair Value of Financial Instruments (Continued)
are no quoted market prices. It is not practicable to estimate the fair value of
these nonperforming loans because of the significant cost. These nonperforming
loans were carried on the balance sheet at $23 million and $35 million at
December 31, 1994 and 1993, respectively.

The fair value estimate for bank card loans does not include the value that
relates to estimated cash flows from possible future loans generated from
existing cardholders over the remaining life of the portfolio.

DEPOSIT LIABILITIES. The fair value of deposits with no stated maturity,
such as noninterest-bearing deposits, savings and interest checking accounts,
and money market accounts, is equal to the amount payable on demand as of
December 31, 1994 and 1993. The fair value of certificates of deposit is based
on the discounted value of contractual cash flows. The discount rate is
estimated using the rates currently offered for deposits of similar remaining
maturities. The fair value does not include the benefit that results from the
low cost funding provided by the deposit liabilities compared to the cost of
borrowing funds in the market.

SHORT- AND LONG-TERM DEBT. For federal funds purchased and security
repurchase agreements, commercial paper and other short-term debt, the carrying
amount is a reasonable estimate of fair value because of the relatively short
period of time between the origination of the instrument and its expected
realization.

The fair value of medium-term notes and underwritten senior and subordinated
debt is calculated based on the discounted value of the contractual cash flows.
The discount rate used is the result of the implied treasury forward rates plus
a risk premium. The risk premium was the difference between the rates currently
offered for newly issued notes and the treasury yield curve at December 31, 1994
and 1993.

ACCEPTANCES AND OTHER ASSETS AND LIABILITIES. The carrying amount of
financial instruments in these classifications is a reasonable estimate of fair
value due to their short-term nature. These classifications are not presented in
the table.

PREFERRED STOCK. The fair value of U. S. Bancorp's preferred stock is its
quoted market price.

64
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

16. Disclosures About Fair Value of Financial Instruments (Continued)
The estimated fair values of U. S. Bancorp's financial instruments at
December 31, 1994 and 1993 are presented below. Bracketed amounts in the
carrying value columns represent either reduction of asset accounts,
liabilities, or commitments representing potential cash outflows. Bracketed
amounts in the fair value columns represent estimated cash outflows required to
currently settle the obligations at current market rates.

<TABLE>
<CAPTION>
1994 1993
---------------------------- ----------------------------
Carrying Carrying
Amount Fair Value Amount Fair Value
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
(In Thousands)
Financial Assets:
Cash and short-term investments.................... $ 1,928,857 $ 1,928,857 $ 1,560,896 $ 1,560,896
Securities and equity investments.................. 2,973,156 2,917,976 3,676,436 3,716,423
Loans held for sale................................ 148,179 148,179 850,327 850,968
Loans
Commercial....................................... 7,434,427 7,365,382 6,893,153 6,830,301
Real estate...................................... 3,613,718 3,600,825 3,311,080 3,368,091
Consumer......................................... 2,908,896 2,784,102 2,368,552 2,393,763
Bank card........................................ 829,077 829,077 829,818 829,818
Allowance for credit losses...................... (305,802) -- (270,229) --
------------- ------------- ------------- -------------
Loans, net....................................... 14,480,316 14,579,386 13,132,374 13,421,973
Financial Liabilities:
Deposits
Noninterest-bearing deposits..................... (4,021,659) (4,021,659) (3,909,617) (3,909,617)
Savings, NOW and interest checking............... (3,683,649) (3,683,649) (3,941,710) (3,941,710)
Money market deposit accounts.................... (3,176,920) (3,176,920) (2,955,170) (2,955,170)
Time deposits.................................... (4,166,138) (4,189,961) (4,704,204) (4,769,302)
Federal funds purchased and security repurchase
agreements........................................ (2,783,503) (2,783,503) (1,954,176) (1,954,176)
Commercial paper................................... (171,454) (171,454) (143,140) (143,140)
Other short-term borrowings........................ (393,587) (393,587) (308,105) (308,105)
Long-term debt..................................... (994,870) (982,081) (1,051,578) (1,080,548)
Preferred stock.................................... (150,000) (141,000) (150,000) (156,000)
Off-Balance Sheet Financial Instruments:
Commitments to extend credit, standby letters of
credit and commercial letters of credit......... -- (25,805) -- (20,539)
Interest rate swaps
On-balance sheet asset......................... 1,865 5,299 4,290 6,116
On-balance sheet liability..................... (166) (7,339) (3,027) (416)
Financial futures contracts
On-balance sheet asset......................... (5,714) -- (402) --
On-balance sheet liability..................... 709 -- 636 --
Foreign exchange contracts
On-balance sheet asset......................... (876) (68,400) (1,048) (64,858)
On-balance sheet liability..................... 684 72,144 996 60,735
Purchased and written options
On-balance sheet asset......................... -- 1,161 (60) 1,290
On-balance sheet liability..................... 952 (1,288) 133 (15)
Other off-balance sheet financial instruments
On-balance sheet asset......................... -- -- (848) 1,625
On-balance sheet liability..................... -- -- -- --
</TABLE>

65
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

16. Disclosures About Fair Value of Financial Instruments (Continued)
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS. The amounts shown under carrying
value represent accruals, deferred gains or losses, and margin requirements
arising from the related unrecognized financial instruments. Fair values for U.
S. Bancorp's off-balance sheet instruments are based on quoted market prices
(futures); current settlement value (foreign exchange contracts and forwards);
fees currently charged to enter into similar agreements, taking into account the
remaining terms of the agreement and the counterparties' credit standing (loan
commitments); or, if there are no relevant comparables, on pricing models or
formulas using current assumptions (interest rate swaps and options).

LIMITATIONS. The fair value estimates are made at a discrete point in time
based on relevant market information and information about the financial
instruments. Because no market exists for a significant portion of these
financial instruments, fair value estimates are based on judgments regarding
future expected loss experience, current economic conditions, risk
characteristics of various financial instruments, and other factors. These
estimates are subjective in nature and involve uncertainties and matters of
significant judgment and, therefore, cannot be determined with precision.
Changes in assumptions could significantly affect the estimates. Accordingly,
the estimates presented herein are not necessarily indicative of what U. S.
Bancorp could realize in a current market exchange. In addition, the fair value
estimates are based on existing on- and off-balance sheet financial instruments
without attempting to estimate the value of anticipated future business and the
value of assets and liabilities that are not considered financial instruments.
U. S. Bancorp has significant assets and liabilities that are not considered
financial instruments, and they have not been incorporated into the fair value
estimates. For example, U. S. Bancorp has not estimated fair value for the
mortgage banking, bank card, trust or brokerage operations. Other significant
assets and liabilities that are not considered financial instruments include
deferred tax liabilities, premises and equipment, goodwill and other
intangibles.

66
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

17. U. S. Bancorp (Parent Company Only) Summary Financial Information

BALANCE SHEET

<TABLE>
<CAPTION>
December 31,
----------------------
1994 1993
---------- ----------
(In Thousands)
<S> <C> <C>
ASSETS
Cash.................................... $ 775 $ 408
Federal funds sold...................... 63,100 40,000
Other short-term investments............ 9 2,643
Securities available for sale, at fair
value (cost: 1994 -- $118,889; 1993 --
$125,912).............................. 137,501 136,487
Trading account securities.............. -- 23,641
Loans
Banking subsidiaries.................. 219,109 369,945
Nonbank subsidiaries.................. 115,766 175,086
Other................................. 15,667 14,341
---------- ----------
Total loans......................... 350,542 559,372
Investment in subsidiaries
Banking............................... 1,947,321 1,921,965
Nonbank............................... 39,442 52,343
Other equity investments................ 32,888 27,750
Other assets............................ 237,376 213,933
---------- ----------
$2,808,954 $2,978,542
---------- ----------
---------- ----------

LIABILITIES AND SHAREHOLDERS' EQUITY
Commercial paper........................ $ 171,454 $ 143,140
Other short-term borrowings............. 40,000 42,200
Other liabilities....................... 189,701 177,521
Long-term debt.......................... 630,514 797,486
---------- ----------
Total liabilities....................... 1,031,669 1,160,347
Shareholders' equity.................... 1,777,285 1,818,195
---------- ----------
$2,808,954 $2,978,542
---------- ----------
---------- ----------
</TABLE>

67
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

17. U. S. Bancorp (Parent Company Only) Summary Financial
Information (Continued)

STATEMENT OF INCOME

<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------
1994 1993 1992
-------- -------- --------
(In Thousands)
<S> <C> <C> <C>
Revenues
Dividends from subsidiaries
Banking -- cash......................... $180,032 $159,206 $170,006
Banking -- noncash...................... 250 745 --
Nonbank -- cash......................... 1,117 4,150 4,433
Nonbank -- noncash...................... 254 23,257 --
Interest from subsidiaries
Banking................................. 20,127 19,228 12,521
Nonbank................................. 8,136 9,027 14,032
Other interest............................ 6,018 6,956 6,147
Equity investment income (loss)........... (5,432) 26,940 15,166
Trading account gains (losses)............ (1,379) (473) (311)
Other noninterest revenues................ 2,100 1,249 230
-------- -------- --------
Total revenues............................ 211,223 250,285 222,224
-------- -------- --------
Expenses
Employee compensation and benefits........ 48,697 51,701 35,042
Interest expense.......................... 66,113 74,425 77,798
Restructuring charge...................... 36,589 -- --
Other operating expenses.................. 73,445 49,192 52,203
Less intercompany charges for services.... (65,657) (56,205) (48,511)
-------- -------- --------
Net expenses.............................. 159,187 119,113 116,532
-------- -------- --------
Income before income taxes and equity in
undistributed income of subsidiaries and
accounting changes....................... 52,036 131,172 105,692
Income tax benefit........................ (41,127) (19,371) (23,430)
-------- -------- --------
Income before equity in undistributed
income of subsidiaries and accounting
changes.................................. 93,163 150,543 129,122
Equity in undistributed income (loss) of
subsidiaries
Banking................................. 71,068 132,175 81,767
Nonbank (1)............................. (12,736) (24,769) (2,815)
Cumulative effect of accounting changes... -- -- (59,890)
-------- -------- --------
Net income................................ $151,495 $257,949 $148,184
-------- -------- --------
-------- -------- --------
<FN>
- ------------------------
(1) The equity in undistributed loss of subsidiaries includes dividends paid
in excess of current year earnings for certain subsidiaries.
</TABLE>

68
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

17. U. S. Bancorp (Parent Company Only) Summary Financial
Information (Continued)

STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
(In Thousands)
<S> <C> <C> <C>
Operating Activities
Net income................................... $ 151,495 $ 257,949 $ 148,184
Adjustments to reconcile net income to cash
used in operating activities:
Cumulative effect of accounting changes.... -- -- 59,890
Undistributed earnings of subsidiaries..... (58,332) (107,406) (78,952)
Noncash dividends included in undistributed
earnings of subsidiaries.................. (504) (24,002) --
Depreciation and amortization.............. 28,750 20,771 15,053
Noncash portion of restructuring charge.... 21,952 -- --
Net (gain) loss on sale of equity
investments............................... 5,875 (28,359) (16,288)
Gain on sale of securities available for
sale...................................... (124) -- --
Loss on sale of trading securities......... 1,379 473 311
Net gains on sale of premises and
equipment................................. (218) (96) (14)
Change in trading account securities....... 22,263 2,108 (460)
Change in other assets..................... 25,039 (5,805) (5,086)
Change in other liabilities................ (27,961) 109,642 3,297
--------- --------- ---------
Net cash provided by operating activities...... 169,614 225,275 125,935
--------- --------- ---------
Investing Activities
Proceeds from maturities of interest-bearing
deposits.................................... 77,305 14,402 500,900
Purchase of interest-bearing deposits........ (76,912) (7,042) (490,897)
Proceeds from maturities of securities held
to maturity................................. -- 30,450 616
Purchase of securities held to maturity...... -- (41,016) (10,636)
Proceeds from sale of securities available
for sale.................................... 70,961 -- --
Purchase of securities available for sale.... (75,301) -- --
Proceeds from sales of equity investments.... 987 99,446 30,995
Purchase of equity investments............... (8,262) (22,339) (24,854)
Principal collected on loans................. 377,262 387,120 410,012
Loans made to subsidiaries and others........ (168,398) (397,492) (577,675)
Equity contributed to subsidiaries........... (9,964) (38,764) (81,315)
Proceeds from sales of premises and
equipment................................... 2,592 669 25
Purchases of premises and equipment.......... (47,358) (44,953) (23,595)
Acquisitions, net of cash and cash
equivalents................................. -- -- (35,490)
--------- --------- ---------
Net cash provided by (used in) investing
activities.................................... 142,912 (19,519) (301,914)
--------- --------- ---------
Financing Activities
Net change in short-term borrowings.......... 26,114 3,426 (25,489)
Proceeds from issuance of long-term debt..... -- 210,925 322,242
Repayment of long-term debt.................. (167,200) (318,500) (204,750)
Dividends paid............................... (102,892) (93,573) (78,660)
Proceeds from issuance of common stock....... 12,021 6,554 10,746
Proceeds from issuance of preferred stock.... -- -- 144,790
Repurchase of common stock................... (57,102) -- --
--------- --------- ---------
Net cash provided by (used in) financing
activities.................................... (289,059) (191,168) 168,879
--------- --------- ---------
Net change in cash and cash equivalents........ 23,467 14,588 (7,100)
Cash and cash equivalents at beginning of
year.......................................... 40,408 25,820 32,920
--------- --------- ---------
Cash and cash equivalents at end of year....... $ 63,875 $ 40,408 $ 25,820
--------- --------- ---------
--------- --------- ---------
Supplemental disclosures:
Cash paid during the period for:
Interest..................................... $ 69,809 $ 75,143 $ 78,374
Income taxes................................. 101,050 85,452 72,031
Non-cash investing activities:
Noncash equity contributed to subsidiaries... $ 504 $ 20,208 $ 833
Transfer from securities held to maturity and
other equity investments to securities
available for sale.......................... -- 125,912 --
Fair value adjustment to securities available
for sale.................................... 8,037 10,575 --
Income tax effect related to fair value
adjustment.................................. 3,344 4,300 --
</TABLE>

69
<PAGE>
U. S. BANCORP AND SUBSIDIARIES
QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
1994 1993
---------------------------------- ----------------------------------
4 3 2 1 4 3 2 1
------- ------- ------- ------- ------- ------- ------- -------
(In Millions, Except Per Share)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest income............... $395.7 $377.9 $361.9 $344.6 $354.9 $362.1 $362.7 $354.0
Interest expense.............. 146.0 130.4 124.8 116.7 119.7 123.5 129.1 133.3
------- ------- ------- ------- ------- ------- ------- -------
Net interest income........... 249.7 247.5 237.1 227.9 235.2 238.6 233.6 220.7
Provision for credit losses... 26.9 34.6 25.6 19.8 28.9 17.5 25.4 21.1
------- ------- ------- ------- ------- ------- ------- -------
Net interest income after
provision for credit
losses....................... 222.8 212.9 211.5 208.1 206.3 221.1 208.2 199.6
Gain on sale of operations and
loans........................ 1.1 52.2 8.5 1.1 4.3 .2 .8 4.0
Other noninterest revenues.... 96.1 88.1 103.4 105.6 144.2 142.0 121.4 114.9
------- ------- ------- ------- ------- ------- ------- -------
Total noninterest revenues.... 97.2 140.3 111.9 106.7 148.5 142.2 122.2 118.9
Restructuring charge.......... -- -- -- 100.0 -- -- -- --
Other noninterest expenses.... 224.5 265.8 249.6 255.4 256.8 261.6 235.4 229.0
------- ------- ------- ------- ------- ------- ------- -------
Total noninterest expenses.... 224.5 265.8 249.6 355.4 256.8 261.6 235.4 229.0
------- ------- ------- ------- ------- ------- ------- -------
Income (loss) before income
taxes and accounting
changes...................... 95.5 87.4 73.8 (40.6) 98.0 101.7 95.0 89.5
Provision (benefit) for income
taxes........................ 29.6 24.7 22.5 (12.2) 31.0 35.9 31.4 28.0
------- ------- ------- ------- ------- ------- ------- -------
Net income (loss)............. $ 65.9 $ 62.7 $ 51.3 $ (28.4) $ 67.0 $ 65.8 $ 63.6 $ 61.5
------- ------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- ------- -------
Per common share
Net income (loss)........... $.63 $.60 $.49 $(.32) $.64 $.63 $.61 $.59
------- ------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- ------- -------
Dividends declared.......... $.25 $.25 $.22 $.22 $.22 $.22 $.22 $.19
------- ------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- ------- -------
U. S. Bancorp common stock
High........................ $25 7/8 $28 1/8 $28 5/8 $28 5/8 $27 1/8 $27 $28 1/8 $28 7/8
Low......................... 22 1/8 25 1/4 24 1/2 23 1/2 22 3/4 24 3/8 22 24 1/2
Close....................... 22 5/8 25 1/2 25 7/8 25 1/4 25 26 3/8 25 25 3/8
Average daily reported trading
volume for the quarter....... 321,213 308,236 381,603 561,597 250,983 166,424 312,970 328,600
</TABLE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

70
<PAGE>
PART III
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The information required by Item 10, Directors and Executive Officers of the
Registrant, is incorporated herein by reference to U. S. Bancorp's definitive
Proxy Statement dated March 13, 1995 ("Proxy Statement"), pages 1-5, under the
headings "Voting Securities and Principal Shareholders" and "Proposal 1:
Election of Directors" or appears under the heading "Executive Officers of the
Registrant" on pages 8-10 of this report. The information required by Item 11,
Executive Compensation, is incorporated herein by reference to the Proxy
Statement, pages 7-13 and 17 under the headings "Executive Compensation" and
"Compensation Committee Interlocks and Insider Participation." The information
required by Item 12, Security Ownership of Certain Beneficial Owners and
Management, is incorporated herein by reference to the Proxy Statement, pages
1-3 under the heading "Voting Securities and Principal Shareholders." The
information required by Item 13, Certain Relationships and Related Transactions,
is incorporated herein by reference to the Proxy Statement, pages 17-18, under
the heading "Transactions with U. S. Bancorp."

71
<PAGE>
PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) 1. and 2.
The financial statements and supplementary data listed in the index set
forth in Item 8 of this report are filed as part of this report.

All schedules are omitted because of the absence of the conditions under
which they are required or because the required information is included in
the financial statements or related notes.

(a) 3.
Exhibits are listed in the Exhibit Index beginning on page 75 of this
report. Each management contract or compensatory plan or arrangement required to
be filed as an exhibit to this report is listed under Item 10, "Executive
Compensation Plans and Arrangements and Other Management Contracts," in the
Exhibit Index.

(b) Reports on Form 8-K:
No reports on Form 8-K were filed by U. S. Bancorp during the quarter ended
December 31, 1994.

72
<PAGE>
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
its behalf by the undersigned, thereunto duly authorized.

U. S. Bancorp
----------------------------------
(Registrant)

Date: March 13, 1995 By: /S/ GERRY B.
-------------------------------------- CAMERON
-------------------------------
Gerry B. Cameron
Chairman of the Board

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on the 13th day of March, 1995.

Signature Title
- --------------------------------------- ---------------------------------------

Principal Executive Officer and
Director:

/S/ GERRY B. Chairman of the Board,
CAMERON Chief Executive Officer, and President
- ---------------------------------------
Gerry B. Cameron

Principal Financial and Accounting
Officer:

/S/ STEVEN P. Executive Vice President
ERWIN and Chief Financial Officer
- ---------------------------------------
Steven P. Erwin

Other Directors:

ROGER L. BREEZLEY* Director
- ---------------------------------------
Roger L. Breezley

FRANKLIN G. DRAKE* Director
- ---------------------------------------
Franklin G. Drake

JOSHUA GREEN III* Director
- ---------------------------------------
Joshua Green III

ROBERT S. MILLER, JR.* Director
- ---------------------------------------
Robert S. Miller, Jr.

PAUL A. REDMOND* Director
- ---------------------------------------
Paul A. Redmond

N. STEWART ROGERS* Director
- ---------------------------------------
N. Stewart Rogers

ANDREW V. SMITH* Director
- ---------------------------------------
Andrew V. Smith

73
<PAGE>
<TABLE>
<CAPTION>
Signature Title
- --------------------------------------- ---------------------------------------

<S> <C>
BENJAMIN R. WHITELEY* Director
- ---------------------------------------
Benjamin R. Whiteley

*By R. D.
GEDDES
- ---------------------------------------
R. D. Geddes
ATTORNEY-IN-FACT
</TABLE>

74
<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibits
- -----------
<S> <C> <C>
3.1 Restated Articles of Incorporation, U. S. Bancorp, as amended, incorporated by reference to
Exhibit 19B to the registrant's quarterly report on Form 10-Q for the quarter ended March
31, 1992.
3.2 Articles of Amendment establishing U. S. Bancorp's 8 1/8% Cumulative Preferred Stock, Series
A, incorporated by reference to Exhibit 19A to the registrant's quarterly report on Form
10-Q for the quarter ended June 30, 1992.
3.3 Bylaws, U. S. Bancorp, as amended August 18, 1994.
4 The registrant has incurred long-term indebtedness as to which the amount involved is less
than 10 percent of the total assets of the registrant and its subsidiaries on a consolidated
basis. The registrant agrees to furnish copies of the instruments relating to such
indebtedness to the Commission upon request.
10 EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS AND OTHER MANAGEMENT CONTRACTS
10.1 U. S. Bancorp 1985 Stock Option and SAR Plan, as amended, incorporated by reference to
Exhibit 10.2 to the registrant's annual report on Form 10-K for 1993.
10.2 U. S. Bancorp Deferred Compensation Plan for Non-Employee Directors, amended and restated
effective January 1, 1990, incorporated by reference to Exhibit (10)(C) to the registrant's
annual report on Form 10-K for 1991.
10.3 First Amendment and Restatement of the U. S. Bancorp Executive Annual Incentive Plan,
incorporated by reference to Exhibit 10.2 to the registrant's quarterly report on Form 10-Q
for the quarter ended September 30, 1994.
10.4 First Amendment and Restatement of U. S. Bancorp Management Annual Incentive Plan effective
August 9, 1994.
10.5 U. S. Bancorp Supplemental Benefits Plan, as amended and restated effective February 17,
1994, incorporated by reference to Exhibit 10.7 to the registrant's annual report on Form
10-K for 1993, and as amended by the First Amendment thereto, incorporated by reference to
Exhibit 10.1 to the registrant's quarterly report on Form 10-Q for the quarter ended June
30, 1994.
10.6 Registration Rights Agreement between U. S. Bancorp and certain shareholders of Peoples Ban
Corporation, incorporated by reference to Exhibit 2(B) to the registrant's report on Form
8-K dated June 16, 1987 (File No. 0-3505).
10.7 Peoples Ban Corporation Deferred Compensation Agreement with Joshua Green III, incorporated
by reference to Exhibit (10)(N) to the registrant's annual report on Form 10-K for 1987
(File No. 0-3505).
10.8 Description of Retirement Benefits of Joshua Green III, incorporated by reference to Exhibit
10.6 to the registrant's quarterly report on Form 10-Q for the quarter ended June 30, 1993.
10.9 Copy of resolutions of the Board of Directors of U. S. Bancorp adopted February 17, 1994,
relating to the Executive Committee of U. S. Bancorp, incorporated by reference to Exhibit
10.12 to the registrant's annual report on Form 10-K for 1993.
10.10 Form of Director Indemnification Agreement entered into between U. S. Bancorp and Messrs.
Breezley, Cameron, Drake, Green, Miller, Redmond, Rogers, Smith and Whiteley, incorporated
by reference to Exhibit 19 to the registrant's quarterly report on Form 10-Q for the quarter
ended June 30, 1988.
10.11 Second Amendment and Restatement of U. S. Bancorp 1990 Non-Employee Director Stock Option
Plan, incorporated by reference to Exhibit 10.2 to the registrant's quarterly report on Form
10-Q for the quarter ended June 30, 1993, and as amended by the First Amendment thereto,
incorporated by reference to Exhibit 10.2 to the registrant's quarterly report on Form 10-Q
for the quarter ended June 30, 1994.
</TABLE>

75
<PAGE>
<TABLE>
<S> <C> <C>
10.12 First Restatement of U. S. Bancorp 1991 Executive Deferred Compensation Plan as amended
effective December 15, 1992, incorporated by reference to Exhibit (10)(P) to the
registrant's annual report on Form 10-K for 1992.
10.13 Change in Control Agreement with Mr. Cameron dated August 19, 1993, as amended by resolution
of the Board of Directors of U.S. Bancorp adopted June 16, 1994.
10.14 Form of Change in Control Agreement with certain other executive officers of the registrant,
including Messrs. Duim, Eskildsen, Hatfield and Sznewajs, incorporated by reference to
Exhibit 19B to the registrant's quarterly report on Form 10-Q for the quarter ended
September 30, 1991.
10.15 U. S. Bancorp Deferred Compensation Trust Agreement effective January 1, 1990, incorporated
by reference to Exhibit (10)(U) to the registrant's annual report on Form 10-K for 1991.
10.16 U. S. Bancorp 1993 Non-Employee Director Stock Option Plan, incorporated by reference to
Exhibit 10.1 to the registrant's quarterly report on Form 10-Q for the quarter ended June
30, 1993.
10.17 U. S. Bancorp 1993 Stock Incentive Plan, as amended and restated November 17, 1994.
10.18 Description of health insurance premium reimbursement plan for U. S. Bancorp directors.
12.1 U. S. Bancorp and Subsidiaries--Computation of Ratios of Consolidated Earnings to Fixed
Charges.
12.2 U. S. Bancorp and Subsidiaries--Capital Ratios.
12.3 U. S. Bancorp and Subsidiaries--Computation of Ratios on a Before Accounting Change Basis.
21 Subsidiaries of the registrant.
23 Independent Auditors' Consent.
24 Power of attorney of certain officers and directors.
27 Financial Data Schedule
</TABLE>

<PAGE>
Exhibit 3.3

BYLAWS
of
U. S. BANCORP

ARTICLE I
MEETINGS OF SHAREHOLDERS

Section 1.1. MEETINGS. The regular Annual Meeting of the Shareholders of this
Corporation for the election of directors and for the transaction of such other
business as properly may come before the meeting shall be held in Portland,
Oregon, or other place duly authorized by the Board of Directors, on the third
Tuesday of April at such time as the Board of Directors may determine.

If for any cause an election of directors is not made on the same day as the
Annual Meeting, the Board of Directors shall order the election to be held on
some subsequent day as soon thereafter as practicable according to the
provisions of law, and notice thereof shall be given in the manner herein
provided for the Annual Meeting.

Business to be conducted at an Annual Meeting (other than procedural matters)
shall be limited to (i) business specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors, (ii)
business otherwise properly brought before the meeting by or at the direction of
the Board of Directors or the Chairman of the Board, or (iii) business properly
brought before the meeting by a shareholder of record of any class of capital
stock entitled to vote upon such business, provided that such shareholder shall
first have given written notice, in the time and manner specified for
shareholder notice of nominations for directors set forth in Section 1.2 of
these Bylaws, briefly describing such business and stating his intention to
present such business at the Annual Meeting.

Special meetings of the shareholders may be called by the Board of Directors,
the Chairman of the Board, the Chief Executive Officer, any Vice Chairman or the
President. A special meeting shall be called upon receipt of a written demand
therefor stating the purpose for which the meeting is to be called by any
shareholder or shareholders owning in the aggregate not less than ten percent of
the stock entitled to vote at such meeting. It shall be the duty of the
Secretary to send out notices of such meetings to be held in Portland, Oregon,
or other convenient place authorized by the Board of Directors and at such time
as may be fixed by the Board of Directors. If the Board of Directors shall fail
to fix a time or place, the meeting shall be held at such time as shall be fixed
by the Chairman of the Board, the Chief Executive Officer, any Vice Chairman,
the President, or the Secretary. Business conducted at a special meeting (other
than procedural matters) shall be limited to the matters stated in the notice
thereof (or any supplement thereto).

<PAGE>

- 1 -

(As amended 8/18/94 - Article V, Section 5.2 Stock Certificates)

Notice of such annual and special meetings shall be mailed postage prepaid not
less than ten nor more than sixty days prior to the date thereof, addressed to
each shareholder of record at his or her address appearing on the books of the
Corporation.

The certificate of the Secretary of this Corporation shall be sufficient proof
of the giving of said notice.

The Board of Directors may adopt rules governing the order of business and
conduct of any shareholders' meeting. Subject to the effect of any such rules,
the Chairman of the Board (or other officer presiding at a shareholders'
meeting) shall have general authority to determine the order of business and, in
the Chairman's discretion, to regulate the conduct of such meeting.

Section 1.2. NOMINATIONS FOR DIRECTOR. Nominations for election to the Board of
Directors may be made by the Board of Directors or by any shareholder of record
of any outstanding class of capital stock entitled to vote for the election of
directors. Nominations, other than those made by or on behalf of the existing
Board of Directors, shall be made in writing and shall be delivered or mailed to
the Chairman of the Board of the Corporation not less than twenty-five days nor
more than sixty days prior to any meeting of shareholders called for the
election of directors, provided, however, that if less than thirty days' notice
of the meeting is given to shareholders, such nominations shall be mailed or
delivered to the Chairman of the Board not later than the close of business on
the fifth day following the day on which the notice of the meeting was mailed.

Section 1.3. DISPUTED Ballots. In the event a dispute arises regarding the
validity or tabulation of a ballot, vote, or proxy, the chairman of the meeting
may appoint a committee of three directors or other persons who are not
employees of the Corporation to resolve the dispute. The decision of the
committee shall be final and binding upon all parties to the dispute.

Section 1.4. Proxies. At all meetings of shareholders, a shareholder may vote
by proxy executed in writing by the shareholder or by his or her duly authorized
attorney-in-fact. Such proxy shall be filed with the Secretary of the
Corporation before or at the time of the meeting. No proxy shall be valid after
11 months from the date of its execution unless otherwise expressly provided in
the proxy.

Section 1.5. OUORUM. MANNER OF ACTING. Shares entitled to vote as a separate
voting group may take action on a matter only if a quorum of those shares exists
with respect to the matter. A

<PAGE>

majority of the votes entitled to be cast on the matter by a voting group,
represented in person or by proxy, shall constitute a quorum of that voting
group for action on that matter. If a quorum exists, action on a matter, other
than the election of directors, shall be approved by a voting group if the votes
cast within the voting group favoring the action exceed the votes cast opposing
the action unless the Oregon Business Corporation Act

- 2 -

(As amended 8/18/94 - Article V, Section 5.2. Stock Certificates)

or the articles of incorporation require a greater number of affirmative votes.
Directors shall be elected by a plurality of the votes cast by the shares
entitled to vote in the election at a meeting at which a quorum is present.
Once a share is represented for any purpose at a meeting, it shall be deemed
present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for that
adjourned meeting.

ARTICLE II
DIRECTORS

Section 2.1. Board OF DIRECTORS. The Board of Directors (herein sometimes
referred to as the "Board") shall have power to manage and direct the business
and affairs of the Corporation.

Section 2.2. Number. The Board shall consist of not less than five nor more
than twenty-five persons, the exact number within such minimum and maximum
limits to be fixed and determined from time to time by resolution of a majority
of the full Board; provided, however, that a majority of the full Board of
Directors may not increase the number of directors to a number which exceeds by
more than four the number of directors last elected by shareholders, but in no
event shall the number of directors exceed twenty-five.

Section 2.3. ORGANIZATION MEETING. The Secretary, upon receiving the returns of
the Judges of Election as aforesaid, shall cause the same to be recorded upon
the minute book of the Corporation and shall notify the directors-elect of their
election. Promptly after the adjournment of the meeting of the shareholders at
which they were elected, the newly elected Board shall meet at a convenient
place for the purpose of organizing and to transact such business as properly
may come before the Board and no notice of such organization meeting shall be
required. If at that time there is not a quorum in attendance, the members
present may adjourn from time to time until a quorum is secured.

Section 2.4. REGULAR MEETINGS. The Board of Directors may establish a schedule
of regular meetings for the transaction of business, the day and hour of which
may be specified by

<PAGE>

resolution adopted in advance of such regular meetings. In the event of a
failure of the Board of Directors to designate such day and hour, the Chairman
of the Board may designate the day and hour upon which such meeting shall be
held, which shall be specified in the notice of such meeting.

Section 2.5. SPECIAL MEETINGS. The Board of Directors may also hold special
meetings upon call of any officer who is a member of the Board of Directors, or
any three or more directors. Notice of special meetings of the Board of
Directors shall be given by the Secretary or Assistant Secretary of the
Corporation, or in case of their absence, refusal or inability to act, by any
other officer who is a member of the Board of Directors, or by any

- 3 -

(As amended 8/18/94 - Article V, Section 5.2. Stock Certificates)

three or more directors by giving 24 hours' notice to the last known address of
each director. Calls for such special meetings must state in general terms the
object of the meeting.

Section 2.6. RETIREMENT. Officer directors may be requested to resign from the
Board upon the date of their retirement as an officer of the Corporation. Each
other member of the Board of Directors will not be eligible for re-election as a
director at the Annual Meeting of the Shareholders following the date on which
such director shall reach the age of 70 years.

Section 2.7. QUORUM. A majority of the number of directors from time to time
fixed as constituting the Board of Directors pursuant to Section 2.2 shall
constitute a quorum at any meeting, except when otherwise provided by law; but a
lesser number may adjourn any meeting, from time to time, and the meeting may be
held, as adjourned, without further notice.

Section 2.8. VACANCIES. When any vacancy occurs among the directors, the
remaining members of the Board, in accordance with the laws of Oregon and with
the provisions of Section 2.2 of these Bylaws, may appoint a director to fill
such vacancy at any meeting of the Board.

Section 2.9. Notice. Notice of meetings of the Board of Directors or any
committee appointed by the Board of Directors may be written or oral, and may be
communicated in person, by telephone, telegraph, teletype, or other form of wire
or wireless communication, or by mail or private courier.

ARTICLE III
COMMITTEES

Section 3.1. Executive COMMITTEE. The Board of Directors may appoint an
Executive Committee consisting of such number of

<PAGE>

members as the Board may from time to time determine. The members may be
officers or directors of the Corporation, or both. A majority of the members
shall constitute a quorum at any meeting of the Executive Committee. The
Executive Committee shall continue to act until succeeded and shall have the
general executive management of the Corporation, subject to the Board of
Directors. The Executive Committee shall in addition have such other duties as
may be specifically delegated to it by these Bylaws or by specific action of the
Board of Directors. AR acts done and powers and authority conferred by the
Executive Committee from time to time shall be deemed to be and may be certified
as being done or conferred under authority of the Board of Directors; provided,
however, that all acts of the Executive Committee shall be reported to the Board
of Directors and shall be subject to confirmation. Unless specifically reversed
as to prospective effect, actions of the Executive Committee shall be considered
as confirmed.

- 4 -

(As amended 8/18/94 - Article V, Section 5.2. Stock Certificates)

The Executive Committee shall have power to discount, purchase and sell bills,
notes and other evidences of debt, to buy and sell bills of exchange, to buy and
sell stocks and other securities (other than shares of the Corporation), to buy,
hold, sell and exchange coin, bullion and other commodities, to invest in other
property, real or personal, and to make reinvestments and changes of
investments, with full power to sell, exchange, transfer, assign, grant options
to buy, lease, encumber or otherwise alienate any of such property, to issue
letters of credit and otherwise to lend the credit of the Corporation, to
authorize loans and discounts and other extensions of credit, to guarantee the
obligations, undertakings and performance of others, to establish and maintain
with others accounts of all kinds, including but not limited to banking,
safekeeping, agency, custodial, trust and management accounts, to make reports
and applications to regulatory and supervisory authorities, and to manage the
Corporation, its affiliates and subsidiaries in the expansion or restriction of
their functions and activities and in the establishment of new affiliates and
subsidiaries, including obtaining any required consent of regulatory and
supervisory authorities, except such power as the Board (or a committee of the
Board) only, by law, is authorized to perform, and shall have the power to
delegate like authority, within such limits as it may fix, to designated
officers of the Corporation or to such other committee or committees of the
Corporation as may be appointed by the Executive Committee or by the Board of
Directors, and the power as well to delegate authority for all administrative
acts including, without limitation, the fixing of salaries for officers below
the level of President who are not members of the Executive Committee, fixing
rates of interest and like matters, providing that nothing contained in this
paragraph shall be construed to limit or restrict the authority of the

<PAGE>

Chief Executive Officer, any Vice Chairman, or the President to delegate powers
regarding such matters as authorized by Sections 4.3, 4.4 and 4.5 of these
Bylaws.

Section 3.2. Audit COMMITTEE. There shall be an Audit Committee composed of not
less than three members of the Board of Directors, no one of whom shall be an
active officer of the Corporation or any of its subsidiaries and each of whom
shall be independent of management of the Corporation. The Committee shall
include at least two members with banking or related financial management
expertise, and shall not include any large customers of the Corporation (as
determined pursuant to the Federal Deposit Insurance Corporation Improvement Act
of 1991 ("FDICIA"). The Committee shall be appointed by the Board of Directors
annually at its organization meeting or more often.

It shall be the duty of the Committee to recommend to the Board of Directors the
accounting firm to be selected as independent auditor of the Corporation and its
subsidiaries: to act on behalf of the Board in discussing with the appropriate
corporate officers any termination of the independent auditor and any
significant disagreements between the independent auditor and management,
meeting and reviewing with the independent auditor and the appropriate corporate
officers, matters relating to disclosure, corporate practices, regulatory and
financial reporting, accounting procedures and policies, and adequacy of
financial and accounting controls; to review the planned scope of the audits by
the independent auditor; and to review, as appropriate, before or after the
fact, compliance of the Corporation and its subsidiaries with laws and
regulations concerning loans to insiders, related party transactions and other

- 5 -

(As amended 8/18/94 - Article V, Section 5.2. Stock Certificates)

transactions involving potential conflicts of interest, and applicable federal
and state laws and regulations concerning dividend restrictions. The Committee
shall review (a) with the independent auditor, the results of the annual audit,
including the auditor's comment letter; (b) with the appropriate corporate
officers, the annual report to the Securities and Exchange Commission, the
annual report to shareholders, and the Proxy Statement; and (c) with management
and the independent auditor, the basis for the reports issued by the Corporation
under 12 CFR Part 363 and any successor or substitute regulations implementing
the provisions of Section 112 of FDICIA, and shall promptly report thereon to
the Board of Directors.

The Audit Committee, in collaboration with the internal Auditor, shall set the
scope, nature and frequency of examinations of the Corporation and its
subsidiaries (with the exception of each subsidiary bank which has established
and appointed a separate

<PAGE>

audit committee composed entirely of outside directors of such subsidiary bank
in compliance with the requirements of FDICIA (an "independent audit
committee")), and other responsibilities of the internal Auditor. The Committee
shall monitor the internal audit group including a review of the planned audit
activities, audit scope, and the degree of coordination with the independent
auditors of the annual audit plan for the Corporation and its subsidiaries. The
Committee shall periodically receive reports from the internal Auditor on
results of audits on nonbank subsidiaries and on each subsidiary bank which has
not established and appointed an independent audit committee, and on the status
of audit coverage of the Corporation. The Committee shall promptly submit its
report thereon and its recommendations to the Board of Directors of this
Corporation and of each applicable subsidiary.

The Committee shall perform such additional duties as may be requested or
directed by the Board of Directors from time to time. The Committee shall
additionally submit to the Board of Directors any recommendations relating to
the scope of its responsibilities it may have from time to time.

The Committee may at its discretion from time to time, without prior permission
of the Board of Directors or any corporate officers, consult or retain legal
counsel, whether internal counsel, this Corporation's regular outside counsel,
or such independent outside counsel as the Committee may select.

The Committee shall meet on call of the chairperson and shall keep minutes of
all of its meetings showing all matters considered by it and the action taken
thereon, and shall submit a report of such meetings at the next regular meeting
of the Board of Directors.

Section 3.3. OTHER COMMITTEES. The Board of Directors may appoint from time to
time, either from its own members or from persons outside its membership, other
committees for such purposes and with such powers as the Board may determine.

ARTICLE IV

- 6 -

(As amended 8/18/94 - Article V, Section 5.2. Stock Certificates)

TITLES, DUTIES, QUALIFICATIONS AND TERMS OF OFFICERS

Section 4.1. Officers. The officers of this Corporation shall be a Chief
Executive Officer, a President, one or more Vice Presidents (the number of Vice
Presidents and the designation of one or more of them as an Executive or Senior
Vice President to be determined by the Board of Directors), a Secretary and an

<PAGE>

Auditor, each of whom shall be appointed by the Board of Directors. One or more
Vice Chairmen and such other officers and assistant officers as may be deemed
necessary may be appointed by the Board of Directors or chosen in such other
manner as the Board of Directors shall by resolution prescribe. The same person
may fill more than one office or position.

The Board of Directors shall designate a member of the Board of Directors to be
the Chairman of the Board and may appoint the Chairman of the Board an officer
of this Corporation. Other officers may also be members of the Board of
Directors.

Section 4.2. CHAIRMAN OF THE BOARD. The Chairman of the Board shall preside
over meetings of shareholders and of the Board of Directors and shall perform
such duties as may be requested or directed by the Board of Directors.

Section 4.3. Chief EXECUTIVE Officer. The Chief Executive Officer shall be the
principal executive officer of the Corporation and, subject to the control of
the Board of Directors, shall supervise the carrying out of the policies adopted
or approved by the Board of Directors. The Chief Executive Officer shall
exercise general supervision over the business and affairs and personnel of the
Corporation, including without limitation the fixing of salaries for members of
the Executive Committee whose salaries are not fixed by the Board of Directors,
provided the salaries so fixed shall be reported to the Board of Directors.

Section 4.4. Vice CHAIRMAN, Each Vice Chairman shall perform such duties as may
be requested or directed by the Board of Directors or by the Chief Executive
Officer from time to time.

Section 4.5. President. The President shall perform such duties as may be
requested or directed by the Board of Directors or by the Chief Executive
Officer from time to time.

Section 4.6. Vice PRESIDENTS. Each Vice President shall have such powers and
duties as may be assigned by the Board of Directors, by the Chief Executive
Officer, or by the President. The Board of Directors shall designate a Vice
President to be the Chief Financial Officer of the Corporation, who shall be the
principal financial and accounting officer of the Corporation with
responsibility for keeping regular books of account, disbursement of corporate
funds, and preparation of financial reports. The Board of Directors shall also
designate a Vice President to be the Treasurer, who shall have general
responsibility for funding the operation of the Corporation and its subsidiaries
and shall, as and to the extent authorized by the Board of Directors or the
Executive Committee, borrow funds and issue securities on behalf of the
Corporation.

<PAGE>

- 7 -

(As amended 8/18/94 - Article V, Section 5.2. Stock Certificates)

Section 4.7. SECRETARY. The Board of Directors shall appoint a Secretary who
shall be the recording officer thereof and keep in written form the minutes of
the meetings of the Board of Directors and of the shareholders. The Secretary
shall attend to the giving of all notices required by these Bylaws to be given,
shall be the custodian of the corporate seal of the Corporation, and shall make
such reports and perform such other duties as are incident to the office of
Secretary, or as are assigned by the Board of Directors.

Section 4.8. AUDITOR. The Board of Directors shall appoint an internal Auditor
whose duty it shall be to make periodic examinations of the affairs of the
Corporation and its subsidiaries, with the exception that the examination of
each subsidiary bank which has established and appointed an independent audit
committee shall be the responsibility of the auditor appointed by the Board of
Directors of each such subsidiary bank, acting under the procedures and policies
delineated in the Bylaws of the bank. The Auditor shall collaborate with the
Audit Committee in determining the scope, nature and frequency of such
examinations. The Auditor shall also perform such other duties as may be
assigned by the Board of Directors or the Chief Executive Officer of the
Corporation. The results of such examinations and recommendations of the
Auditor, if any, shall be submitted in writing by the Auditor to the Chief
Executive Officer and to the Audit Committee.

ARTICLE V
STOCK AND STOCK CERTIFICATES

Section 5.1. Transfers. Shares of stock shall be transferable on the books of
the Corporation, and a transfer book shall be kept in which all transfers of
stock shall be recorded. Every person becoming a shareholder by such transfer
shall, in proportion to his or her shares, succeed to all rights and liabilities
of the prior holder of such shares.

Section 5.2. STOCK CERTIFICATES. Certificates of stock shall bear the signature
of the Chief Executive Officer, the Chairman of the Board, or of the President,
or of a Vice President and the Secretary or an Assistant Secretary of the
Corporation, and shall be signed manually or by facsimile process, and shall be
countersigned by an authorized officer of First Chicago Trust Company of New
York as transfer agent, and the seal, manual or facsimile, of the Corporation
shall be set forth thereon. No transfer shall be made of any certificate issued
except on the surrender of the certificate or certificates previously issued
therefor, or on proof of their loss and the furnishing of indemnity satisfactory
to an appropriate officer of the Corporation as designated in writing by the
Chief Executive Officer or the President of the Corporation.

<PAGE>

The Board of Directors shall have power and authority to make all such rules and
regulations as it may deem expedient concerning the issue, transfer,
registration, and replacement of lost certificates for shares of the capital
stock of the Corporation.

- 8 -

(As amended 8/18/94 - Article V, Section 5.2. Stock Certificates)

Section 5.3. Dividends. All declarations of dividends shall fix the date for
the payment thereof, and period of closing of stock books, and a record date,
prior to the payment of dividends, for the purpose of determining the
shareholders entitled to the same.

The transfer books may be closed for the purpose of the annual election of
directors, before meetings of shareholders, before the payment of dividends, for
the purpose of obtaining written consents of shareholders, or for any other
purpose, for such period not exceeding twenty days as the Board of Directors may
by resolution direct. In lieu of closing the transfer books the Board may in
its discretion fix a day and hour not less than ten days nor more than seventy
days prior to the holding of any meeting of shareholders or the day appointed
for the payment of any dividend or for any other notice, as the time as of which
shareholders entitled to notice of and to vote at such meeting, or to receive
such dividend or for such other purpose shall be determined, and only
shareholders of record at such time shall be entitled to notice of or to vote at
such meeting or to receive such dividend or to be treated as shareholders for
such other purposes.

ARTICLE VI
CORPORATE SEAL

The official seal of this Corporation shall be circular in form with the words
"corporate seal" and "Oregon" and the name of the Corporation appearing thereon.

ARTICLE VII
MISCELLANEOUS PROVISIONS

Section 7.1. Fiscal Year. The fiscal year of the Corporation shall be the
calendar year.

Section 7.2. Records. The organization papers of this Corporation, the returns
of the Judges of Election, the proceedings of all regular and special meetings
of the directors and of the shareholders, the Bylaws and any amendments hereto,
shall be recorded in a minute book; and the minutes of each meeting shall be
signed by the chairman and the secretary of the meeting.

<PAGE>
ARTICLE VIII
BYLAWS

Section 8.1. INSPECTION. A copy of the Bylaws, with all amendments thereto,
shall at all times be kept in a convenient place at the principal office of the
Corporation and shall be open for inspection to all shareholders, during
business hours.

- 9 -

(As amended 8/18/94 - Article V, Section 5.2. Stock Certificates)

Section 8.2. Amendments. These Bylaws may be changed or amended by the vote of
a majority of the whole number of directors.

- 10 -

(As amended 8/18/94 - Article V, Section 5.2. Stock Certificates)

<PAGE>
Exhibit 10.4

U. S. BANCORP
MANAGEMENT ANNUAL INCENTIVE PLAN
FIRST AMENDMENT AND RESTATEMENT

THIS MANAGEMENT ANNUAL INCENTIVE PLAN (the "Plan") was adopted by
U. S. Bancorp, an Oregon corporation ("Bancorp"), effective January 1, 1993, and
is amended and restated in the form of this First Amendment and Restatement
effective August 9, 1994. Capitalized terms that are not otherwise defined
herein have the meanings set forth in Article XI.

ARTICLE I
PURPOSE OF PLAN

The continued growth and success of Bancorp depend upon its ability to
attract and retain the services of key executives of the highest level of
competence and to provide incentives for their effective service and superior
performance. The purpose of the Plan is to advance the interests of Bancorp and
its shareholders through an annual incentive compensation program that will
attract, retain, and motivate key executives.

ARTICLE II
SPONSORING EMPLOYERS

Any corporation in which Bancorp owns (directly or indirectly) stock
possessing 50 percent or more of the combined voting power may, by resolution of
its board of directors, sponsor and maintain this Plan for its executives.
Bancorp and such corporations are referred to collectively as the "Sponsoring
Employers."

- 1 -
<PAGE>

ARTICLE III
ELIGIBILITY

All key executives (including officers who may also be directors) of
any Sponsoring Employer are eligible to participate in this Plan.

ARTICLE IV
PARTICIPATION

For each Plan Period, the Executive Committee shall determine which
eligible employees (other than members of the Executive Committee) shall
participate in the Plan. An executive who becomes eligible after the beginning
of a Plan Period may be designated by the Executive Committee to be a
Participant for the remaining portion of the Plan Period.

ARTICLE V
INCENTIVE AWARDS

5.1 ANNUAL INCENTIVE AWARDS.

For each Participant for each Plan Period, the Participant's Annual
Incentive Award (the "Award") shall be equal to the product of:

(a) The aggregate of the Weighted Component Percentages for the
Participant's Designated Components for the Plan Period;

(b) The Participant's Modifier Percentage, if any, for the Plan
Period; and

(c) The Participant's Target Award for the Plan Period.
However, in no event shall a Participant's Award for a Plan Period exceed
200 percent of the Participant's Target Award for the Plan Period.

- 2 -
<PAGE>

5.2 TARGET AWARD. For each Participant for each Plan Period, the
Executive Committee shall specify, prior to the beginning of the Plan Period, a
targeted incentive award (the "Target Award"). The Target Award may be
expressed, at the Executive Committee's discretion, as a fixed dollar amount or
as a percentage of a Participant's regular annualized base salary, as in effect
on the last day of the Plan Period.

5.3 DESIGNATED COMPONENTS. Awards under the Plan shall be based on
all or some of the following components:

CORPORATE COMPONENT - A component based on the extent that
Bancorp and its subsidiaries as a whole achieve specified corporate
performance levels.

OPERATING GROUP COMPONENT - A component based on the extent that
various Bancorp Operating Groups achieve specified performance levels.

STRATEGIC BUSINESS UNIT COMPONENT - A component based on the
extent that various Strategic Business Units achieve specified
performance levels.

STRATEGIC SUPPORT UNIT COMPONENT - A component based on the
extent that various Strategic Support Units achieve specified
performance levels.

SHARED-GOALS COMPONENT - A component that may be identified by
the Executive Committee with respect to high priority projects that
require a large degree of cooperation and joint involvement of more
than one Operating Group or Strategic Business Unit.

For each Participant for each Plan Period, the Executive Committee shall
designate which of the Components will determine the Participant's Award for the
Plan Period and shall assign each Designated Component a Component Weighting
Percentage which may be any whole

- 3 -
<PAGE>

number from zero to 100 percent. The sum of the Component Weighting Percentages
for all the Designated Components for a Participant for a Plan Period shall
equal 100 percent.

5.4 PARTICIPANT SCHEDULE. For each Participant for each Plan Period,
the Executive Committee shall cause to be prepared and furnished to the
Participant as close as possible to the beginning of the Plan Period a schedule
setting forth:

(a) The Participant's Target Award for the Plan Period;

(b) The Participant's Designated Components and the respective
Component Weighting Percentages for each Designated Component;

(c) For each Designated Component, success factors and the
respective Threshold, Target, and Outstanding Performance Levels for
each success factor and a description of the method selected by the
Executive Committee for combining the performance results for each
success factor into a single Component Performance Percentage for that
Component;

(d) The Participant's modifier goals, if any, and the respective
Threshold, Target, and Outstanding Performance Levels for each
modifier goal and a description of the method selected by the
Executive Committee for combining the performance results for each
modifier goal into a single Modifier Percentage for the Participant;

(e) An explanation (using examples) of how the Weighted
Component Percentages for the Participant's Designated Components and
the Modifier Percentage, if any, will be computed and how the
Participant's Award will be determined.

- 4 -
<PAGE>

5.5 SUCCESS FACTORS. Prior to the beginning of each Plan Period, the
Executive Committee shall determine a success factor or a combination of success
factors (generally not more than four) for each Component. For each such
success factor, the Executive Committee shall specify a Threshold Performance
Level, a Target Performance Level, and an Outstanding Performance Level. If the
Executive Committee selects two or more success factors for a particular
Component, the Executive Committee shall also specify a method of combining the
results of the separate success factors into a single Component Performance
Percentage.

5.6 MODIFIER GOALS. Prior to the beginning of each Plan Period, the
Executive Committee may determine for any Participant a modifier goal or a
combination of modifier goals to measure the performance of the Participant.
For each modifier goal, the Executive Committee shall specify a Threshold
Performance Level, a Target Performance Level, and an Outstanding Performance
Level. If the Executive Committee selects two or more modifier goals for a
Participant, the Executive Committee shall also specify a method of combining
the results of the separate modifier goals into a single Modifier Percentage.

5.7 PERFORMANCE PERCENTAGES. As soon as possible after the
completion of each Plan Period, the Executive Committee shall determine:

(a) For each Component, a Component Performance Percentage
representing the degree to which success factors for that Component were
achieved; and

(b) For each Participant:

(i) The aggregate of the Weighted Component
Percentages for the Participant's Designated Components for
the Plan Period; and

- 5 -
<PAGE>

(ii) A Modifier Percentage representing the degree to
which any modifier goals for that Participant were achieved.

5.7.1 COMPONENT PERFORMANCE PERCENTAGE. For each Component, based on
the level of achievement for each success factor, the Executive Committee shall
determine a Component Performance Percentage ranging from:

- 0 percent, for performance below the specified Threshold
Performance Level;

- A minimum value (not less than 50 percent), for performance
equal to the specified Threshold Performance Level; through

- 100 percent, for performance equal to the specified Target
Performance Level; to

- A maximum value (not more than 150 percent), for performance
equal to or greater than the specified Outstanding Performance Level.

If two or more success factors are specified for a Component, the Executive
Committee shall use the method specified pursuant to Section 5.5 for that
Component for that Plan Period to combine results into a single Component
Performance Percentage.

5.7.2 WEIGHTED COMPONENT PERCENTAGES. For each Designated Component
for each Participant, the Executive Committee shall compute a Weighted Component
Percentage equal to the Component Performance Percentage multiplied by the
Component Weighting Percentage designated for that Component.

5.7.3 MODIFIER PERCENTAGES. For each Participant for whom one or
more modifier goals are designated, the Executive Committee shall determine the
level of achievement with respect to each modifier goal specified for that
Participant. Based on the

- 6 -
<PAGE>

level of achievement for each modifier goal, the Executive Committee shall
determine a Modifier Percentage for each Participant ranging from:

- A minimum value (not less than 75 percent), for performance
equal to or below the specified Threshold Performance Level; through

- 100 percent, for performance equal to the specified Target
Performance Level; to

- A maximum value (not more than 125 percent), for performance
equal to or greater than the specified Outstanding Performance Level.
If two or more modifier goals are specified for a Participant, the Executive
Committee shall use the method specified pursuant to Section 5.6 for that Plan
Period to combine results into a single Modifier Percentage.

5.7.4 DETERMINING PERFORMANCE LEVELS. In determining the level of
achievement of success factors for any Component and of modifier goals for any
Participant, the Executive Committee may, in its sole discretion, take into
consideration developments, changes in circumstances, and nonrecurring and
extraordinary events that were not foreseen at the beginning of the Plan Period.

5.8 CALCULATION OF AWARD. The Executive Committee shall determine
the Award for each Participant for a Plan Period no later than three months
after the end of the Plan Period. If a Participant's job position changes
during the Plan Period, the Executive Committee may increase or decrease the
amount of a Participant's Award to reflect the change. Although Awards
generally shall be based on the procedures specified in this Article V, the
Executive Committee may adjust any Participant's Award to reflect additional or
extraordinary performance factors that, in the judgment of the Executive
Committee,

- 7 -
<PAGE>

should be considered in the overall performance of the Participant and the
Participant's Operating Group and Strategic Business Unit or Strategic Support
Unit for the Plan Period.

5.9 RIGHT TO RECEIVE AWARD. A Participant must continue employment
with a Sponsoring Employer until the end of a Plan Period in order to be
entitled to receive an Award for that Plan Period in accordance with the terms
of the Plan. If a Participant's employment with the Sponsoring Employers is
terminated before the end of the Plan Period for a reason other than death,
disability, Position Termination, or retirement, the Participant shall not be
entitled to any Award for that Plan Period. If a Participant's employment with
the Sponsoring Employers is terminated before the end of the Plan Period due to
death, disability, Position Termination, or retirement, the Executive Committee
shall determine whether, and to what extent, the Participant or the
Participant's beneficiary or estate shall be entitled to receive a pro-rata
portion of the Participant's Award for the Plan Period and on what basis such
proration shall be made.

5.10 PARTIAL PLAN PERIODS. If the Executive Committee designates a
Participant after the beginning of a Plan Period, as provided in Article IV, the
Executive Committee shall adjust any combination of the success factors and any
modifier goals for the Participant, the Threshold, Target, and Outstanding
Performance Levels for one or more of the success factors and modifier goals, or
the Participant's Target Award to take into account the Participant's
participation for less than the full Plan Period.

ARTICLE VI
PAYMENT OF AWARDS

Unless a Participant who is eligible to participate in the U. S.
Bancorp 1991 Executive Deferred Compensation Plan, or any successor or other
similar deferred

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<PAGE>

compensation plan maintained by one or more of the Sponsoring Employers, makes
an effective deferral election under such deferred compensation plan covering
Awards under this Plan, a Participant's Award shall be paid in a lump sum within
three months after the end of the Plan Period to which the payment relates.

ARTICLE VII
ADMINISTRATION

The Plan shall be administered by the Executive Committee. The
Executive Committee shall have the exclusive authority and responsibility for
all matters in connection with the operation and administration of the Plan.
The Executive Committee's powers and duties shall include, but shall not be
limited to, the following:

(a) Responsibility for the compilation and maintenance of all
records necessary in connection with the Plan;

(b) Authorizing the payment of all benefits and expenses of the
Plan as they become payable under the Plan; and

Decisions by the Executive Committee shall be final and binding upon
all parties affected by the Plan, including the beneficiaries of Participants.

The Executive Committee may rely on information and recommendations
provided by supervisory management. The Executive Committee may delegate to one
or more individual Executive Committee members or to supervisory management who
are not Executive Committee members the responsibility for decisions the
Executive Committee may make or actions the Executive Committee may take under
the terms of the Plan, subject to

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<PAGE>

the Executive Committee's reserved right to review the decisions or actions and
modify them when necessary or appropriate under the circumstances. The
Executive Committee shall not allow any employee to obtain control over
decisions or actions that affect that employee's Plan benefits.

ARTICLE VIII
MISCELLANEOUS

8.1 NONASSIGNABILITY OF BENEFITS. A Participant's benefits under the
Plan cannot be sold, transferred, anticipated, assigned, pledged, hypothecated,
seized by legal process, subjected to claims of creditors in any way, or
otherwise disposed of.

8.2 GOVERNING LAW. This Plan and any amendments shall be construed,
administered, and governed in all respects in accordance with applicable federal
law and the laws of the state of Oregon.

8.3 NO RIGHT OF CONTINUED EMPLOYMENT. Nothing in the Plan shall
confer upon any person the right to continue in the employ of any Sponsoring
Employer or interfere in any way with the right of any Sponsoring Employer to
terminate the person's employment at any time.

8.4 WITHHOLDING TAXES. The Sponsoring Employer shall withhold any
taxes required by law to be withheld in connection with payment of an Award
under this Plan.

ARTICLE IX
CLAIMS PROCEDURE

9.1 INITIAL CLAIM. Any person claiming an Award under this Plan
("Claimant") shall present a claim in writing to the Manager of the Human
Resources Group (the "Manager").

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<PAGE>

9.2 DECISION ON INITIAL CLAIM.

9.2.1 TIME PERIOD FOR DENIAL NOTICE. A decision shall be made on the
claim as soon as practicable and shall be communicated in writing by the Manager
to the Claimant within a reasonable period after the Manager receives the claim.
In no event shall the decision on an initial claim be given more than 90 days
after the date the claim was filed, unless special circumstances require an
extension of time for processing. If there is an extension, the Claimant shall
be notified of the extension within 90 days of the date the claim was filed.
The extension notice shall indicate the special circumstances and the date by
which a decision is expected. The extension shall not exceed 90 days from the
end of the initial response period.

9.2.2 CONTENTS OF NOTICE. If the claim is wholly or partially
denied, the notice of denial shall indicate:

(a) The specific reasons for the denial;

(b) The specific references to pertinent Plan provisions on
which the denial is based;

(c) A description of additional material or information
necessary for the Claimant to perfect the claim and an explanation of
why such material or information is necessary; and

(d) An explanation of the Plan's claim review procedure.

9.2.3 DEEMED DENIED. If written notice of the decision wholly or
partially denying the claim has not been furnished within 90 days after the
claim is filed, or if there has been an extension and no notice of a decision is
furnished by the end of the extension period, and if the claim has not been
granted within such period, the claim shall be deemed

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<PAGE>

denied as of the end of the 90-day or 180-day period for purposes of proceeding
to the review stage described in 9.3 and 9.4, below.

9.3 REVIEW OF DENIED CLAIM. If a Claimant receives a notice of
denial or, if the claim is deemed denied pursuant to 9.2 above, the Claimant may
request a review of the claim. The request for review is made by personally
delivering or mailing a written request for review, prepared by either the
Claimant or an authorized representative, to the Executive Committee. The
Claimant's request for review must be made within a reasonable period of time,
taking into consideration the nature of the benefit that is the subject of the
claim and other attendant circumstances. In no event shall the period for
requesting review expire less than 60 days after receipt of the notice of denial
or the date on which the claim is deemed denied if no notice is received. If
the written request for review is not made in a timely manner, the Claimant
shall be deemed to have waived the right to review. The Claimant or a duly
authorized representative may, at or after the time of making the request,
review all pertinent documents and submit issues and comments in writing.

9.4 DECISION ON REVIEW. A review shall be promptly made by the
Executive Committee after receipt of a timely filed request for review. A
decision on review shall be made and furnished in writing to the Claimant. The
decision shall be made not later than 60 days after receipt of the request for
review. If special circumstances require an extension of time for processing
(such as the need to hold a hearing), a decision shall be made and furnished to
the Claimant not later than 120 days after receipt of the request for review.
If an extension is required, the Claimant shall be notified of the extension
within 60 days after the request for review was filed. The written decision
shall include the reasons for the decision with reference to the provisions of
the Plan upon which the decision is based. The

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<PAGE>

decision shall be final and binding upon the Claimant and the Sponsoring
Employers and all other persons involved. If the decision on review is not
furnished within the applicable time period, the claim shall be deemed denied on
review.

The scope of any subsequent review of the benefit claim, judicial or
otherwise, shall be limited to a determination as to whether the Executive
Committee acted arbitrarily or capriciously in the exercise of its discretion.
In no event shall any such further review be on a de novo basis because the
Executive Committee has discretionary authority to determine eligibility for
benefits and to construe the terms of this Plan.

ARTICLE X
AMENDMENTS AND TERMINATION

The Executive Committee has the power to terminate this Plan at any
time or to amend this Plan at any time and in any manner that it may deem
advisable.

ARTICLE XI
DEFINITIONS

For purposes of this Plan, the following terms shall have the meanings set
forth in this Article XI:

AWARD--An annual incentive award under the Plan.
BANCORP--U. S. Bancorp, an Oregon corporation.
BOARD--The Board of Directors of U. S. Bancorp.
COMPONENT--One of the elements of performance used to determine Awards

under the Plan as described in Section 5.3, including the Corporate, Operating
Group, Strategic Business Unit, Strategic Support Unit, and one or more
Shared-Goals Components.

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<PAGE>

COMPONENT PERFORMANCE PERCENTAGE--A percentage, computed as provided
in Section 5.7.1, representing the degree to which success factors for a
component have been achieved.

COMPONENT WEIGHTING PERCENTAGE--A percentage specified by the
Executive Committee pursuant to Section 5.3 for each of a Participant's
Designated Components to represent the relative weight to be given to each
Component.

DESIGNATED COMPONENT--One of the Components designated by the
Executive Committee pursuant to Section 5.3 to determine the Award for a
Participant for a Plan Period.

EXECUTIVE COMMITTEE--Bancorp's Executive Committee, or any successor
committee designated by the Board.

MODIFIER PERCENTAGE--A percentage determined by the Executive
Committee pursuant to Section 5.7.3 representing the level of achievement with
respect to a Participant's modifier goals.

OPERATING GROUP--One of the principal operating groups for Bancorp and
its subsidiaries, including, but not limited to, banking, investor services,
real estate, emerging businesses, capital markets, and leasing and financial.

PARTICIPANT--An eligible employee designated by the Executive
Committee to participate in the Plan for all or a portion of a Plan Period.

PLAN PERIOD --A calendar year or other measurement period specified by
the Executive Committee.

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<PAGE>

POSITION TERMINATION--The elimination of a Participant's employment
position with a Sponsoring Employer.

SPONSORING EMPLOYER--Bancorp and the subsidiaries of Bancorp that
adopt the Plan as provided in Article II.

STRATEGIC BUSINESS UNIT--The subsidiary corporation or division of
Bancorp or a subsidiary corporation designated by the Executive Committee as a
relevant business unit for a Participant for a Plan Period.

STRATEGIC SUPPORT UNIT--The group or unit of Bancorp or a subsidiary
corporation performing a support function that is designated by the Executive
Committee as a relevant support unit for a Participant for a Plan Period.

TARGET AWARD--The targeted incentive award for a Participant for a
Plan Period specified by the Executive Committee as provided in Section 5.2.

WEIGHTED COMPONENT PERCENTAGE--A percentage, determined as provided in
Section 5.7.2, representing a Component Performance Percentage multiplied by a
Component Weighting Percentage.

IN WITNESS WHEREOF this First Amendment and Restatement of the Plan,
as approved by the Executive Committee, is executed this ____ day
of____________, 1994.

U. S. BANCORP

By: /s/ JUDITH L. RICE
----------------------------

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<PAGE>
Exhibit 10.13

U. S. BANK

CHANGE IN CONTROL AGREEMENT
(Three-Year Benefit)

June 23, 1993

Mr. Gerry B. Cameron
Vice Chairman
U. S. Bancorp
111 S.W. Fifth Avenue, T-31
Portland, Oregon 97204

Dear Mr. Cameron:

U. S. Bancorp (which, together with its wholly-owned subsidiaries, is
referred to as "Bancorp") considers the establishment and maintenance of its key
management group to be essential to the best interests of Bancorp and its
shareholders. Bancorp recognizes that, as is the case with many publicly-held
corporations, the possibility of a change in control may arise and that the
attendant uncertainty may result in the departure or distraction of key
management personnel to the detriment of Bancorp and its shareholders.
Accordingly, the Board of Directors of Bancorp (the "Board") has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of key members of Bancorp's management without
distraction from the possibility of a change in control of Bancorp. The Board
believes it important that, in the event of a proposal for transfer of control
of Bancorp, you be able to assess the proposal and advise the Board without
being influenced by the uncertainties of your own situation. The Board also
considers Bancorp's management one of Bancorp's most valuable assets and wishes
to take appropriate steps to preserve the management group through the
uncertainties which may attend any potential transaction involving a change in
control.

In order to induce you to remain in the employ of Bancorp, this letter
Agreement, which has been approved by the Board, sets forth the severance
compensation which Bancorp agrees will be provided to you in the event your
employment with Bancorp is terminated subsequent to a "Change In Control" of
Bancorp under the circumstances described below.

1. DEFINITIONS. For purposes of this Agreement, the following terms
will have the meanings set forth in this Section 1.

"AGREEMENT" - This letter agreement, including any extensions of the
term of this Agreement pursuant to Section 3.

<PAGE>
Mr. Gerry B. Cameron - 2 - June 23, 1993

"BANCORP" - U. S. Bancorp, an Oregon corporation, and its wholly-owned
subsidiaries.

"BANCORP SHARES" - Shares of the $5 par value common stock of Bancorp.

"BENEFIT PLAN" - Any plan, policy, or program of Bancorp (whether or
not on an insured basis) providing medical, dental, health, disability income,
life insurance or other death benefits, or similar types of benefits to
employees of Bancorp. Benefit Plan does not include any plan or arrangement
providing for vacation pay, bonuses or incentive compensation of any kind, or
current or deferred salary or similar compensation.

"BOARD" - The Bancorp board of directors.

"CAUSE" - Cause for termination shall mean commission of an act of
fraud, embezzlement, or theft constituting a felony or commission of an act (or
failure to take an action) intentionally against the interest of Bancorp which
causes Bancorp material injury. Notwithstanding the foregoing, you shall not be
deemed to have been terminated for Cause unless and until there shall have been
delivered to you a copy of a resolution duly adopted by the affirmative vote of
not less than two-thirds of the entire membership of the Board at a meeting of
the Board called and held for the purpose (after reasonable notice to you and an
opportunity for you, together with your counsel, to be heard before the Board),
finding that in the good faith opinion of the Board you were guilty of conduct
constituting Cause as defined in this Agreement and specifying the particulars
thereof in detail. The foregoing provisions shall not restrict the authority,
discretion, or power of the Board, by any action taken in compliance with
Bancorp's articles of incorporation and bylaws, to terminate your employment
with or without Cause. Rather, the foregoing provisions merely define, for
purposes of your contractual rights and remedies under this Agreement, the
circumstances in which termination of your employment will constitute
termination for Cause.

"CHANGE IN CONTROL" - A change in control of Bancorp shall mean:

(a) A change in control of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A as in effect on the
date hereof pursuant to the Exchange Act; provided that, without limitation,
such a change in control shall be deemed to have occurred at such time as any

<PAGE>
Mr. Gerry B. Cameron - 3 - June 23, 1993

Person hereafter becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of 30 percent or more of the combined
voting power of Bancorp Voting Securities; or

(c) There shall be consummated (i) any consolidation or merger of Bancorp
in which Bancorp is not the continuing or surviving corporation or pursuant to
which Voting Securities (other than fractional shares) would be converted into
cash, securities, or other property, other than a merger of Bancorp in which the
holders of Voting Securities immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation immediately
after the merger, or (ii) any sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of a majority (by value) of the
assets of Bancorp, provided that any such consolidation, merger, sale, lease,
exchange, or other transfer consummated at the insistence of an appropriate
banking regulatory agency shall not constitute a Change in Control; or

(d) Approval by the shareholders of Bancorp of any plan or proposal for the
liquidation or dissolution of Bancorp.

"CODE" - The Internal Revenue Code of 1986, as amended.

"DATE OF TERMINATION" - Shall mean (a) if this Agreement is terminated
for Disability, 30 days after Notice of Termination is given (provided that you
shall not have returned to the performance of your duties on a full-time basis
within such 30-day period), or (b) if your employment is terminated for any
other reason, the date on which a Notice of Termination is given; provided that
if within 30 days after any Notice of Termination is given the party receiving
such Notice of Termination notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be the date on which
the dispute is finally determined, either by mutual written agreement of the
parties or by a final judgment, order, or decree of a court of competent
jurisdiction (the time for appeal therefrom having

<PAGE>
Mr. Gerry B. Cameron - 4 - June 23, 1993

expired and no appeal having been perfected). The term of this Agreement shall
be extended until the Date of Termination.

"DISABILITY" - Termination of your employment with Bancorp for
"Disability" shall mean termination because of (a) your absence from your duties
with Bancorp on a full-time basis for 180 consecutive days as a result of your
incapacity due to physical or mental illness and (b) your failure to return to
performance of your duties with Bancorp on a full-time basis within 30 days
after a written Notice of Termination is given to you.

"EXCHANGE ACT" - The Securities Exchange Act of 1934, as amended.

"EXCISE TAX" - A tax imposed by Section 4999(a) of the Code, or any
successor provision, with respect to "excess parachute payments" as described in
Section 280G(b) of the Code.

"GOOD REASON" - Termination by you of your employment for "Good Reason"
shall mean termination based on any of the following:

(a) a change in your status or position or positions with Bancorp
which, in your reasonable judgment, represents a demotion from your status
or position or positions as in effect immediately prior to the Change in
Control, or a change in your duties or responsibilities which, in your
reasonable judgment, is inconsistent with such status or position or
positions, or any removal of you from or any failure to reappoint or reelect
you to such position or positions, except in connection with the termination
of your employment for Cause or Disability or as a result of your death or
the termination by you other than for Good Reason;

(b) a reduction by Bancorp in your base salary as in effect
immediately prior to the Change in Control;

(c) the failure by Bancorp to continue in effect any Plan in which you
are participating at the time of the Change in Control (or Plans providing
you with at least substantially similar benefits), other than as a result of
the normal expiration of any such Plan in accordance with its terms or a
modification of such Plan which modification is applicable to all employees
who participate in such Plan, as in effect at the time of the

<PAGE>
Mr. Gerry B. Cameron - 5 - June 23, 1993

Change in Control, or the taking of any action, or the failure to act, by
Bancorp which would adversely affect your continued participation in any of
such Plans on at least as favorable a basis to you as is the case on the
date of the Change in Control or which would materially reduce your benefits
in the future under any of such Plans or deprive you of any material benefit
enjoyed by you at the time of the Change in Control;

(d) the failure by Bancorp to provide and credit you with the number
of paid vacation days to which you are then entitled in accordance with
Bancorp's normal vacation policy as in effect immediately prior to the
Change in Control;

(e) Bancorp's requiring you to be based anywhere more than 35 miles
from where your office is located immediately prior to the Change in Control
except for required travel on Bancorp's business to an extent substantially
consistent with the business travel obligations which you undertook on
behalf of Bancorp prior to the Change in Control;

(f) the failure by Bancorp to obtain from any successor the assent to
this Agreement contemplated by subsection 6(a) hereof;

(g) any purported termination by Bancorp of your employment which is
not effected pursuant to a Notice of Termination satisfying the requirements
of this Agreement; and for purposes of this Agreement, no such purported
termination shall be effective; or

(h) any refusal by Bancorp to continue to allow you to attend to
matters or engage in activities not directly related to the business of
Bancorp which, prior to the Change in Control, you were permitted by the
Board to attend to or engage in.

"NOTICE OF TERMINATION" - Any notice of any termination of your employment
shall be communicated by written Notice of Termination to the other party
hereto. For purposes of this Agreement, a "Notice of Termination" of your
employment by Bancorp shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to

<PAGE>
Mr. Gerry B. Cameron - 6 - June 23, 1993

provide a basis for termination of your employment under the provision so
indicated.

"OTHER AGREEMENT" - A plan, arrangement, or agreement pursuant to which
an Other Payment is made.

"OTHER PAYMENT" - Any payment or benefit payable to you in connection
with a Change in Control of Bancorp pursuant to any plan, arrangement, or
agreement (other than this Agreement) with Bancorp, a person whose actions
result in such Change in Control, or any person affiliated with Bancorp or such
person.

"PERSON" - Any individual, corporation, partnership, group,
association, or other "person," as such term is used in Section 14(d) of the
Exchange Act, other than Bancorp or any employee benefit plan or plans sponsored
by Bancorp.

"PLAN" - Any compensation plan such as a plan providing for incentive
or deferred compensation, stock options, or other stock or stock-related grants
or awards or any employee benefit plan such as a thrift, investment, savings,
pension, profit sharing, medical, disability, accident, life insurance,
cafeteria, or relocation plan or any other plan, policy, or program of Bancorp
providing similar types of benefits to employees of Bancorp.

"SEVERANCE PAYMENTS" - The payments described in subsection 4(d) of
this Agreement.

"TOTAL PAYMENTS" - All payments or benefits payable to you in
connection with a Change in Control of Bancorp, including Severance Payments
under this Agreement and Other Payments.

"VOTING SECURITIES" - Bancorp's issued and outstanding securities
ordinarily having the right to vote at elections of Bancorp's Board.

2. AGREEMENT TO PROVIDE SERVICES; RIGHT TO TERMINATE; CONFIDENTIALITY.

(a) TERMINATION PRIOR TO CERTAIN OFFERS. Except in the event of a
Change in Control, and except as otherwise provided in subsection 2(b) of
this Agreement or in any written employment agreement between you and
Bancorp, either Bancorp or you may terminate your employment at any time,
subject to Bancorp paying whatever severance benefits as are provided for
pursuant to applicable

<PAGE>
Mr. Gerry B. Cameron - 7 - June 23, 1993

Bancorp Plans or compensation agreements other than this Agreement. If, and
only if, termination of your employment with Bancorp occurs after a Change in
Control, the provisions of this Agreement regarding the payment of Severance
Payments shall apply.

(b) CONTINUATION OF SERVICES SUBSEQUENT TO CERTAIN OFFERS. In the
event a tender offer or exchange offer is made by a Person for more than
30 percent of Bancorp's Voting Securities, you agree that you will not
leave the employ of Bancorp (other than as a result of Disability) and
will render services to Bancorp in the capacity in which you then serve
until such tender offer or exchange offer has been abandoned or
terminated or a Change in Control has occurred. In the event that,
during the period you are obligated to continue in the employ of Bancorp
pursuant to this subsection 2(b), Bancorp reduces your compensation,
your obligations under this subsection 2(b) shall terminate.

(c) TERMINATION FOR CAUSE. Bancorp may terminate your employment
for Cause whether or not a Change in Control has occurred.

(d) CONFIDENTIALITY. You acknowledge that (i) by reason of the
capacity in which you have been employed, you have financial information
regarding Bancorp which has not been publicly disclosed and which is
confidential to Bancorp, and (ii) disclosure of such financial
information could cause irreparable harm to Bancorp. You agree that you
will not disclose, without prior written consent of Bancorp, any
financial or other confidential business information regarding Bancorp
which has not been publicly disclosed by Bancorp.

3. TERM OF AGREEMENT. This Agreement shall commence on the date
hereof and shall continue in effect until December 31, 1993; provided, however,
that commencing on January 1, 1994, and each January 1 thereafter, the term of
this Agreement shall automatically be extended for one additional year unless at
least 90 days prior to such January 1, Bancorp or you shall have given notice
that this Agreement shall not be extended; and provided, further, that if a
Change in Control shall occur while this Agreement is in effect, the term of
this Agreement shall automatically be extended for a period of 3 calendar years
beyond the calendar year in which such Change in Control occurs. Except as
provided in subsection 2(a) of this Agreement, this Agreement

<PAGE>
Mr. Gerry B. Cameron - 8 - June 23, 1993

shall terminate if you or Bancorp terminate your employment prior to a Change in
Control.

4. TERMINATION FOLLOWING CHANGE IN CONTROL. In the event that your
employment with Bancorp is terminated, whether by you or by Bancorp, within
3 years from the date of occurrence of any event constituting a Change in
Control (it being recognized that more than one such event may occur in which
case the 3-year period shall run from the date of occurrence of each such
event), you shall be entitled to the following respective benefits:

(a) DISABILITY. During any period that you are unable to perform your
duties hereunder as a result of incapacity due to physical or mental
illness, you shall continue to receive your full base salary at the rate
then in effect until your employment with Bancorp is terminated by Bancorp
for Disability. Thereafter, your benefits shall be determined in accordance
with Bancorp's Disability Income Program. If Bancorp's Disability Income
Program is modified or terminated following a Change in Control, Bancorp
shall substitute another plan or program with benefits applicable to you
substantially similar to those provided by the Disability Income Program
prior to its modification or termination.

(b) TERMINATION UPON DEATH. In the event of your death while an
employee of Bancorp, Bancorp shall pay to your representative your full base
salary through the date of your death at the rate in effect on the date of
the Change in Control, together with all benefits, including death benefits,
to which you are then entitled under Plans in which you are a participant,
and Bancorp shall have no further obligations to you under this Agreement.

(c) TERMINATION FOR CAUSE OR WITHOUT GOOD REASON. If your employment
is terminated by Bancorp for Cause, or by you other than for Good Reason,
Bancorp shall pay you your full base salary through the Date of Termination
at the rate in effect on the date the Change in Control occurs, together
with all benefits to which you are then entitled under Plans in which you
are a participant, and Bancorp shall have no further obligations to you
under this Agreement.

(d) TERMINATION WITHOUT CAUSE OR WITH GOOD REASON. If your employment
with Bancorp is terminated (other than

<PAGE>
Mr. Gerry B. Cameron - 9 - June 23, 1993

for Disability or upon your death) by Bancorp without Cause or by you with
Good Reason, subject to the limitations set forth in Sections 7 and 12,
Bancorp shall pay you, upon demand, the following amounts ("Severance
Payments"):

(i) your full base salary through the Date of
Termination at the rate in effect on the date the Change in
Control occurs;

(ii) in lieu of any further salary payments to you for
periods subsequent to the Date of Termination, an amount of
severance pay equal to three times the sum of (A) your annual
base salary, at the rate in effect on the date the Change in
Control occurs, plus (B) the average annual incentive
compensation (if any) paid to you or accrued to your benefit
(prior to any deferrals) in respect of the two fiscal years
last ended prior to the fiscal year in which the Change in
Control occurs;

(iii) all legal fees and expenses incurred by you as a
result of such termination (including all such fees and
expenses, if any, incurred in contesting or disputing any such
termination or in seeking to obtain or enforce any right or
benefit provided by this Agreement); and

(iv) reimbursement in full of all reasonable amounts
paid or incurred by you for outplacement services in
connection with obtaining other employment.

The amount of Severance Payments otherwise payable pursuant to this
Agreement shall be reduced by (A) amounts payable to you pursuant to
Bancorp's Severance Benefits Plan or any successor plan providing
severance benefits to Bancorp employees and (B) amounts payable to you
(after any adjustment or reduction to reflect payments described in clause
(A)) as salary continuation and incentive compensation pursuant to any
employment agreement between you and Bancorp which is in effect as of the
Date of Termination. The payments provided for in this paragraph shall be
made not later than the fifth day following the Date of Termination;
provided, however, that if the amounts of such payments

<PAGE>
Mr. Gerry B. Cameron - 10 - June 23, 1993

cannot be finally determined on or before such day, Bancorp shall pay to you
on such day an estimate, as determined in good faith by Bancorp, of the
minimum amount of such payments, and shall pay the remainder of such
payments (together with interest at the rate of 10 percent per annum) as
soon as the amount thereof can be determined but in no event later than the
30th day after the Date of Termination. In the event that the amount of the
estimated payments exceeds the amount subsequently determined to have been
due, such excess shall constitute a loan by Bancorp to you, payable on the
fifth day after demand by Bancorp (together with interest at the rate of
10 percent per annum).

(e) RELATED BENEFITS. Unless you die or your employment is terminated
by Bancorp for Cause or Disability, or by you other than for Good Reason,
Bancorp shall maintain in full force and effect, for the continued benefit\
of you for three years after the Date of Termination, all Benefit Plans in
which you were entitled to participate immediately prior to the Date of
Termination, provided that your continued participation is possible under
the general terms and provisions of such Benefit Plans; provided, however,
that if you become eligible to participate in a benefit plan, program, or
arrangement of another employer which confers benefits upon you
substantially similar to those provided by one or more Benefit Plans, you
shall cease to receive benefits under this subparagraph in respect of such
Benefit Plan or Plans. In the event that your participation in any Benefit
Plan is barred by the provisions of such Benefit Plan, Bancorp shall arrange
to provide you with benefits substantially similar to those which you are
entitled to receive under such Benefit Plan.

(f) NO MITIGATION. You shall not be required to mitigate the amount
of any payment provided for in this Section 4 by seeking other employment or
otherwise, nor, except as expressly set forth in subsection 4(e), shall the
amount of any payment provided for in this Section 4 be reduced by any
compensation earned by you as the result of employment by another employer
after the Date of Termination, or otherwise.

5. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when

<PAGE>
Mr. Gerry B. Cameron - 11 - June 23, 1993

delivered or mailed by United States registered mail, return receipt requested,
postage prepaid, addressed to the respective addresses set forth on the first
page of this Agreement, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notices of
change of address shall be effective only upon receipt.

6. SUCCESSORS; BINDING AGREEMENT.

(a) This Agreement shall inure to the benefit of, and be binding
upon, any corporate or other successor or assignee of Bancorp which
shall acquire, directly or indirectly, by merger, consolidation or
purchase, or otherwise, all or substantially all of the business or
assets of Bancorp. Bancorp shall require any such successor, by an
agreement in form and substance reasonably satisfactory to you,
expressly to assume and agree to perform this Agreement in the same
manner and to the same extent as Bancorp would be required to perform if
no such succession had taken place.

(b) This Agreement shall inure to the benefit of and be
enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and legatees.
If you should die while any amount would still be payable to you
hereunder if you had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to your devisee, legatee, or other designee or, if there
is no such designee, to your estate.

7. REDUCTION IN SEVERANCE PAYMENTS TO AVOID EXCESS PARACHUTE TAX
PAYMENTS.

(a) REDUCTION. In the event that any portion of the Total
Payments received by you in connection with a Change in Control of
Bancorp would not be deductible, in whole or in part, for federal income
tax purposes as a result of Section 280G of the Code, the Severance
Payments otherwise payable under this Agreement shall be reduced until
(i) no portion of the Total Payments is not deductible pursuant to
Section 280G of the Code or (ii) the Severance Payments are reduced to
zero.

(b) APPLICATION. For purposes of this limitation:

<PAGE>
Mr. Gerry B. Cameron - 12 - June 23, 1993

(i) No portion of the Total Payments, the receipts or
enjoyment of which you have effectively waived in writing
prior to the date of payment of the Severance Payments, shall
be taken into account;

(ii) No portion of the Total Payments shall be taken
into account which, in the opinion of tax counsel selected by
Bancorp and reasonably acceptable to you ("Tax Counsel"), does
not constitute a "parachute payment" within the meaning of
Section 280G of the Code;

(iii) The Severance Payments shall be reduced only to
the extent necessary so that the Total Payments (other than
those referred to in paragraphs (b)(i) and (ii) above) in
their entirety constitute, in the opinion of Tax Counsel,
reasonable compensation for services actually rendered within
the meaning of Section 280G(b)(4) of the Code; and

(iv) The value of any noncash benefit or any deferred
payment or benefit included in the Total Payments, and whether
or not all or a portion of any payment or benefit is a
"parachute payment" for purposes of paragraph (b)(ii) above,
shall be determined by Bancorp's independent accountants in
accordance with the principles of Section 280(G)(d)(3) and (4)
of the Code.

(c) EFFECT ON OTHER AGREEMENTS. In the event that any Other Agreement
has a provision that requires a reduction in the Other Payment governed by
such Other Agreement to avoid or eliminate an "excess parachute payment" for
purposes of Section 280G of the Code, the reduction in Severance Payments
pursuant to this Section 7 shall be given effect before any reduction in the
Other Payment pursuant to the Other Agreement. To the extent possible,
Bancorp and you agree that reductions in benefits under any Bancorp Plan
shall be reduced (only to the extent necessary to avoid a nondeductible
excess parachute payment) in the following order of priority:

<PAGE>
Mr. Gerry B. Cameron - 13 - June 23, 1993

(i) Severance Payments under this Agreement;

(ii) Benefit Plan benefit continuation;

(iii) Any benefit payable under Bancorp's Supplement
Benefits Plan or a successor plan or a plan providing similar
benefits; and

(iv) The acceleration in the exercisability of any stock
option or other stock related award granted by Bancorp.

8. MISCELLANEOUS. No provision of this Agreement may be modified,
waived, or discharged unless such modification, waiver, or discharge is agreed
to in a writing signed by you and the Chairman of the Board or President of
Bancorp. No waiver by either party hereto at any time of any breach by the
other party hereto of, or of compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same, or at any prior or
subsequent, time. No agreements or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity,
interpretation, construction, and performance of this Agreement shall be
governed by the laws of the State of Oregon.

9. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.

10. PAYMENTS DURING CONTROVERSY. Notwithstanding the pendency of any
dispute or controversy, Bancorp will continue to pay you your full compensation
in effect when the notice giving rise to the dispute was given (including, but
not limited to, base salary and installments of incentive compensation) and
continue you as a participant in all Plans in which you were participating when
the notice giving rise to the dispute was given, until the dispute is finally
resolved in accordance with the procedure described in Section 1 in connection
with the definition of "Date of Termination." Amounts paid under this section
are in addition to all other amounts due under this Agreement and shall not be
offset against or reduce any other amounts due under this Agreement. You shall
be entitled to seek specific performance of your right to be paid until the Date
of

<PAGE>
Mr. Gerry B. Cameron - 14 - June 23, 1993

Termination during the pendency of any dispute or controversy arising under or
in connection with this Agreement.

11. WITHHOLDING. Bancorp shall withhold from any payment of Severance
Payments or any other benefits under this Agreement all federal, state, and
local taxes as shall be required pursuant to any law or governmental regulation
or ruling.

12. REGULATORY LIMITATIONS. Notwithstanding any other provision of
this Agreement, Bancorp shall have no obligation to make any payments to you
pursuant to Section 4 of this Agreement if, or to the extent, such payments are
prohibited by any applicable law or regulation, including without limitation the
FDIC's regulations regarding Golden Parachute and Indemnification Payments
promulgated under the Comprehensive Thrift and Bank Fraud Prosecution and
Taxpayer Recovery Act of 1990.

13. EARLIER AGREEMENT SUPERSEDED. This Agreement replaces and
completely supersedes the Change in Control Agreement (Two-Year Benefit) between
you and Bancorp dated April 16, 1992.

If this letter correctly sets forth our agreement on the subject matter
hereof, kindly sign and return to Bancorp the enclosed copy of this letter,
which will then constitute our agreement on this subject.

Sincerely,

U. S. BANCORP

By /s/ JUDITH L. RICE
---------------------------

Agreed to this 19th day
------
of August , 1993.
-------------

/s/ GERRY B. CAMERON
- ---------------------------
Employee
<PAGE>
- 15 -

AMENDMENT ADOPTED JUNE 16, 1994
BY U. S. BANCORP BOARD OF DIRECTORS

RESOLVED that the provisions of the Change in Control Agreement between
U. S. Bancorp and Gerry B. Cameron dated August 19, 1993, and the U. S. Bancorp
Supplemental Benefits Plan relating to change in control benefits for Mr.
Cameron be amended to delete the provisions in the Agreement and Plan that
reduce benefits to the extent that they constitute "excess parachute payments"
within the meaning of Internal Revenue Code Section 280G.

RESOLVED FURTHER that the Change in Control Agreement dated August 19,
1993, be further amended to provide for payment to Mr. Cameron, in addition to
the severance payment described in the Change in Control Agreement, in an amount
equal to:

1. The excise tax imposed on Mr. Cameron by Internal Revenue Code
Section 4999 with respect to any benefit payable to Mr. Cameron under
the Change in Control Agreement or the Supplemental Benefits Plan that
constitute "excess parachute payments"; plus

2. All federal and state income taxes and excise taxes imposed on
Mr. Cameron with respect to the payment of (A) the excise tax described
in the preceding paragraph 1 and (B) the taxes described in this
paragraph 2.

<PAGE>
Exhibit 10.17

U. S. BANCORP
1993 STOCK INCENTIVE PLAN
AS AMENDED AND RESTATED
NOVEMBER 17, 1994
<PAGE>

U. S. BANCORP
1993 STOCK INCENTIVE PLAN

TABLE OF CONTENTS

PAGE

ARTICLE 1 ESTABLISHMENT AND PURPOSE . . . . . . . . . . . . . . . . . . . . 1
1.1 Establishment; Restatement . . . . . . . . . . . . . . . . . . . . 1
1.2 Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Other Option Plans . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE 2 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Gender and Number. . . . . . . . . . . . . . . . . . . . . . . . . 7

ARTICLE 3 ADMINISTRATION. . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 Composition of the Committee . . . . . . . . . . . . . . . . . . . 7
3.3 Authority of the Committee . . . . . . . . . . . . . . . . . . . . 7
3.4 Delegation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.5 Liability of Committee Members . . . . . . . . . . . . . . . . . . 8
3.6 Costs of Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE 4 DURATION OF THE PLAN AND SHARES SUBJECT TO THE PLAN . . . . . . . 8
4.1 Duration of the Plan . . . . . . . . . . . . . . . . . . . . . . . 8
4.2 Shares Subject to the Plan . . . . . . . . . . . . . . . . . . . . 8

ARTICLE 5 ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

ARTICLE 6 AWARDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.1 Types of Awards. . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.2 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.3 Nonuniform Determinations. . . . . . . . . . . . . . . . . . . . . 10
6.4 Award Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.5 Provisions Governing All Awards. . . . . . . . . . . . . . . . . . 10

ARTICLE 7 OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.1 Types of Options . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.2 General; Limitation on Number of Options . . . . . . . . . . . . . 14
7.3 Option Price . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.4 Option Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.5 Time of Exercise . . . . . . . . . . . . . . . . . . . . . . . . . 15
- i -
<PAGE>
7.6 Special Rules for Incentive Stock Options. . . . . . . . . . . . . 15
7.7 Restricted Shares. . . . . . . . . . . . . . . . . . . . . . . . . 15
7.8 Reload Options . . . . . . . . . . . . . . . . . . . . . . . . . . 15

ARTICLE 8 STOCK APPRECIATION RIGHTS . . . . . . . . . . . . . . . . . . . . 16
8.1 General; Limitation on Number of SARs. . . . . . . . . . . . . . . 16
8.2 Nature of Stock Appreciation Right . . . . . . . . . . . . . . . . 16
8.3 Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.4 Form of Payment. . . . . . . . . . . . . . . . . . . . . . . . . . 16

ARTICLE 9 RESTRICTED SHARE AWARDS . . . . . . . . . . . . . . . . . . . . . 16
9.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9.3 Restriction Period . . . . . . . . . . . . . . . . . . . . . . . . 17
9.4 Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.5 Settlement of Restricted Share Awards. . . . . . . . . . . . . . . 18
9.6 Rights as a Shareholder. . . . . . . . . . . . . . . . . . . . . . 18

ARTICLE 10 PERFORMANCE SHARE AWARDS . . . . . . . . . . . . . . . . . . . . 18
10.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.2 Nature of Performance Share Awards. . . . . . . . . . . . . . . . 18
10.3 Performance Cycles. . . . . . . . . . . . . . . . . . . . . . . . 18
10.4 Performance Goals . . . . . . . . . . . . . . . . . . . . . . . . 18
10.5 Determination of Awards . . . . . . . . . . . . . . . . . . . . . 19
10.6 Timing and Form of Payment. . . . . . . . . . . . . . . . . . . . 19
10.7 Rights as a Shareholder . . . . . . . . . . . . . . . . . . . . . 19

ARTICLE 11 OTHER STOCK BASED AND COMBINATION AWARDS . . . . . . . . . . . . 20
11.1 Other Stock-Based Awards. . . . . . . . . . . . . . . . . . . . . 20
11.2 Combination Awards. . . . . . . . . . . . . . . . . . . . . . . . 20

ARTICLE 12 DEFERRAL ELECTIONS . . . . . . . . . . . . . . . . . . . . . . . 20

ARTICLE 13 DIVIDEND EQUIVALENTS . . . . . . . . . . . . . . . . . . . . . . 21

ARTICLE 14 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, ETC. . . . . . . . . 21
14.1 Plan Does Not Restrict Bancorp. . . . . . . . . . . . . . . . . . 21
14.2 Adjustments by the Committee. . . . . . . . . . . . . . . . . . . 21

ARTICLE 15 AMENDMENT AND TERMINATION. . . . . . . . . . . . . . . . . . . . 22

ARTICLE 16 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . 22
16.1 Tax Withholding . . . . . . . . . . . . . . . . . . . . . . . . . 22
16.2 Unfunded Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 22
16.3 Payments to Trust . . . . . . . . . . . . . . . . . . . . . . . . 22
16.4 Annulment of Awards . . . . . . . . . . . . . . . . . . . . . . . 22
- ii -
<PAGE>
16.5 Engaging in Competition With Bancorp. . . . . . . . . . . . . . . 23
16.6 Other Bancorp Benefit and Compensation Programs . . . . . . . . . 23
16.7 Securities Law Restrictions . . . . . . . . . . . . . . . . . . . 23
16.8 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 23

ARTICLE 17 SHAREHOLDER APPROVAL . . . . . . . . . . . . . . . . . . . . . . 24
- iii -
<PAGE>
U. S. BANCORP
1993 STOCK INCENTIVE PLAN

ARTICLE 1
ESTABLISHMENT AND PURPOSE

1.1 ESTABLISHMENT; RESTATEMENT. U. S. Bancorp, an Oregon corporation
("Bancorp"), established the U. S. Bancorp 1993 Stock Incentive Plan (the
"Plan") effective as of October 21, 1993, amended and restated the Plan
effective February 17, 1994, and further amended and restated the Plan in the
present form effective November 17, 1994, subject to shareholder approval as
provided in Article 17.

1.2 PURPOSE. The purpose of the Plan is to promote and advance the
interests of Bancorp and its shareholders by enabling Bancorp to attract,
retain, and reward key employees of Bancorp and its Subsidiaries. It is also
intended to strengthen the mutuality of interests between such employees and
Bancorp's shareholders. The Plan is designed to serve these purposes by
offering stock options and other equity-based incentive awards, thereby
providing a proprietary interest in pursuing the long-term growth,
profitability, and financial success of Bancorp.

1.3 OTHER OPTION PLANS. The Plan shall be separate from the
following existing plans (the "Prior Plans"):

U. S. Bancorp 1973 Nonqualified Stock Option Plan (the "1973
Plan")

U. S. Bancorp 1984 Incentive Stock Option Plan (the "1984 Plan")

U. S. Bancorp 1985 Stock Option and SAR Plan (the "1985 Plan")

The Plan shall neither affect the operation of the Prior Plans nor be affected
by the Prior Plans, except as follows:

(a) No further stock options will be granted under any of the
Prior Plans after the date the Plan is approved by Bancorp's
shareholders as described in Article 17; and

(b) The number of Shares which may be made subject to Awards
under the Plan shall be adjusted, pursuant to Section 4.2, to reflect
cancellation or expiration of options previously granted under the
Prior Plans.
- 1 -
<PAGE>
ARTICLE 2
DEFINITIONS

2.1 DEFINED TERMS. For purposes of the Plan, the following terms
shall have the meanings set forth below:

"ACQUIRING PERSON" shall mean any person or related person or
related persons which constitute a "group" for purposes of Section 13(d) and
Rule 13d-5 under the Securities Exchange Act of 1934 (the "Exchange Act"), as
such Section and Rule are in effect as of the Grant Date; provided, however,
that the term Acquiring Person shall not include (a) Bancorp or any of its
Subsidiaries, (b) any employee benefit plan of Bancorp or any of its
Subsidiaries, (c) any entity holding voting capital stock of Bancorp for or
pursuant to the terms of any such employee benefit plan, or (d) any person or
group solely because such person or group has voting power with respect to
capital stock of Bancorp arising from a revocable proxy or consent given in
response to a public proxy or consent solicitation made pursuant to the Exchange
Act.

"AWARD" means an award or grant made to a Participant of Options,
Stock Appreciation Rights, Restricted Share Awards, Performance Share Awards, or
Other Stock-Based Awards pursuant to the Plan.

"AWARD AGREEMENT" means an agreement as described in Section 6.4
evidencing an Award under the Plan.

"BOARD" means the Board of Directors of Bancorp.

"CHANGE IN CONTROL" shall mean:

(a) A change in control of Bancorp of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A as in effect on the Grant Date pursuant to the Exchange
Act; provided that, without limitation, such a change in control shall
be deemed to have occurred at such time as any Acquiring Person
hereafter becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of 30 percent or more
of the combined voting power of Voting Securities; or

(b) During any period of 12 consecutive calendar months,
individuals who at the beginning of such period constitute the Board
cease for any reason to constitute at least a majority thereof unless
the election, or the nomination for election, by Bancorp shareholders
of each new director was approved by a vote of at least a majority of
the directors then still in office who were directors at the beginning
of the period; or
- 2 -
<PAGE>
(c) There shall be consummated (i) any consolidation or merger
of Bancorp in which Bancorp is not the continuing or surviving
corporation or pursuant to which Voting Securities would be converted
into cash, securities, or other property, other than a merger of
Bancorp in which the holders of Voting Securities immediately prior to
the merger have the same proportionate ownership of common stock of
the surviving corporation immediately after the merger, or (ii) any
sale, lease, exchange, or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of the
assets of Bancorp, provided that any such consolidation, merger, sale,
lease, exchange, or other transfer consummated at the insistence of an
appropriate banking regulatory agency shall not constitute a Change in
Control; or

(d) Approval by the shareholders of Bancorp of any plan or
proposal for the liquidation or dissolution of Bancorp.

"CHANGE IN CONTROL DATE" shall mean the first date following the Grant
Date on which a Change in Control has occurred.

"CODE" means the Internal Revenue Code of 1986, as amended and in
effect from time to time, or any successor thereto, together with rules,
regulations, and interpretations promulgated thereunder. Where the context so
requires, any reference to a particular Code section shall be construed to refer
to the successor provision to such Code section.

"COMMITTEE" means the Compensation Committee of the Board (or a
successor committee appointed by the Board to administer the Plan as provided in
Article 3 of the Plan).

"COMMON STOCK" means the $5 par value Common Stock of Bancorp or any
security of Bancorp issued in substitution, exchange, or lieu thereof.

"CONTINUING RESTRICTION" means a Restriction described in Sections
6.5(g), 16.4, 16.5, and 16.7 of the Plan and any other Restrictions expressly
designated by the Committee in an Award Agreement as a Continuing Restriction.

"BANCORP" means U. S. Bancorp, an Oregon corporation, or any successor
corporation.

"DISABILITY" means the condition of being permanently "disabled"
within the meaning of Section 22(e)(3) of the Code, namely being unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months. However, the Committee may, by

- 3 -
<PAGE>

resolution, change the foregoing definition of "Disability" or may adopt a
different definition for purposes of specific Awards.

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
and in effect from time to time, or any successor statute. Where the context so
requires, any reference to a particular section of the Exchange Act, or to any
rule promulgated under the Exchange Act, shall be construed to refer to
successor provisions to such section or rule.

"FAIR MARKET VALUE" - For all purposes of the Plan, the "Fair Market
Value" of Shares on a particular day shall be determined without regard to any
restrictions (other than a restriction which, by its terms, will never lapse)
and shall mean:

(a) The low sale price as reported for that day in THE WALL
STREET JOURNAL by the National Market System of the National
Association of Securities Dealers Automated Quotation System (NASDAQ);
or

(b) If the low sale price is not reported in THE WALL STREET
JOURNAL for that day, the low sale price quoted by NASDAQ for that
day.

If no sale price is reported in THE WALL STREET JOURNAL or quoted by
NASDAQ for that day, the low sale price reported or quoted for the immediately
preceding day on which it was reported or quoted shall be used. In the event
Common Stock becomes listed on a stock exchange, the Committee may, by
resolution, revise the foregoing definition of Fair Market Value by reference to
trading prices as reported for such stock exchange.

"INCENTIVE STOCK OPTION" or "ISO" means any Option granted pursuant
to the Plan that is intended to be and is specifically designated in its Award
Agreement as an "incentive stock option" within the meaning of Section 422 of
the Code.

"NONQUALIFIED OPTION" or "NQO" means any Option granted pursuant to
the Plan that is not a Statutory Option.

"OPTION" includes a Statutory Option, an ISO, and an NQO.

"OTHER STOCK-BASED AWARD" means an Award as defined in Section 11.1.

"PARTICIPANT" means an employee of Bancorp or a Subsidiary who is
granted an Award under the Plan.

"PERFORMANCE SHARE AWARD" means an Award granted pursuant to the
provisions of Article 10 of the Plan, the Vesting of which is contingent on
performance attainment.
- 4 -
<PAGE>
"PERFORMANCE CYCLE" means a designated performance period pursuant to
the provisions of Section 10.3 of the Plan.

"PERFORMANCE GOAL" means a designated performance objective pursuant
to the provisions of Section 10.4 of the Plan.

"PERFORMANCE SHARE" means a Share granted under and subject to a
Performance Share Award.

"PLAN" means this U. S. Bancorp 1993 Stock Incentive Plan, as set
forth herein and as it may be hereafter amended and from time to time.

"PRIOR PLANS" mean the previous stock option plans of Bancorp
described in Section 1.3.

"ROAA" or "RETURN ON AVERAGE ASSETS" means a performance goal equal
to, for any fiscal period, the ratio, expressed as a percentage, of Bancorp's
net income for the period (excluding extraordinary gains from the sale of
assets) to the daily average of the book value of Bancorp's assets during the
period.

"REPORTING PERSON" means a Participant who is subject to the reporting
requirements of Section 16(a) of the Exchange Act.

"RESTRICTED SHARE" means a Share granted under and subject to a
Restricted Share Award.

"RESTRICTED SHARE AWARD" means an Award granted pursuant to the
provisions of Article 9 of the Plan.

"RESTRICTION" means a provision in the Plan or in an Award Agreement
which limits the exercisability or transferability, or which governs the
forfeiture, of an Award or the Shares, cash, or other property payable pursuant
to an Award.

"RETIREMENT" means retirement under the U. S. Bancorp Retirement Plan.
However, the Committee may, by resolution, change the foregoing definition of
"Retirement" or may adopt a different definition for purposes of specific
Awards.

"SHARE" means a share of Common Stock.

"STATUTORY OPTION" means an Incentive Stock Option or any other form
of stock option that is intended to meet the requirements specified in the Code
(as the Code may be amended from time to time) for favorable income tax
treatment for the Participant, for Bancorp, or for both.
- 5 -
<PAGE>
"STOCK APPRECIATION RIGHT" or "SAR" means an Award providing a benefit
based on the appreciation of Common Stock granted pursuant to the provisions of
Article 8 of the Plan.

"SUBSIDIARY" means a "subsidiary corporation" of Bancorp, within the
meaning of Section 425 of the Code, namely any corporation in which Bancorp
directly or indirectly controls 50 percent or more of the total combined voting
power of all classes of stock having voting power.

"TSR" or "TOTAL SHAREHOLDER RETURN" means a performance goal equal to,
for any fiscal year, the ratio, expressed as a percentage, of:

(a) The excess of:

(1) The average daily stock price (based on the mean
between the high and low stock trading prices for each day)
of the Shares for each trading day of the last fiscal
quarter of a fiscal year of Bancorp (or, for purposes of a
short fiscal period, of the last fiscal quarter of such
period); less

(2) The average daily stock price (computed in the
same manner as described above) of the Shares for the last
fiscal quarter of the preceding fiscal year (the "Base
Price"); plus

(3) The sum of all cash dividends paid with respect to
the Shares during the fiscal year (or, for purposes of a
short fiscal period, during the portion of the fiscal year),
treating each cash dividend as if it was reinvested in
Shares at the Base Price on the dividend payment date; over

(b) The Base Price.

"VEST" or "VESTED" means:

(a) In the case of an Award that requires exercise, to be or to
become immediately and fully exercisable and free of all Restrictions
(other than Continuing Restrictions);

(b) In the case of an Award that is subject to forfeiture, to be
or to become nonforfeitable, freely transferable, and free of all
Restrictions (other than Continuing Restrictions);

(c) In the case of an Award that is required to be earned by
attaining specified Performance Goals, to be or to become earned and
nonforfeitable,
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freely transferable, and free of all Restrictions (other than Continuing
Restrictions); or

(d) In the case of any other Award as to which payment is not
dependent solely upon the exercise of a right, election, exercise, or
option, to be or to become immediately payable and free of all
Restrictions (except Continuing Restrictions).

"VOTING SECURITIES" shall mean Bancorp's issued and outstanding
securities ordinarily having the right to vote at elections of directors.

2.2 GENDER AND NUMBER. Except where otherwise indicated by the
context, any masculine or feminine terminology used in the Plan shall also
include the opposite gender; and the definition of any term in Section 2.1 in
the singular shall also include the plural, and vice versa.

ARTICLE 3
ADMINISTRATION

3.1 GENERAL. The Plan shall be administered by the Committee or a
successor committee as described in Section 3.2.

3.2 COMPOSITION OF THE COMMITTEE. The Committee shall consist of not
less than a sufficient number of members of the Board who are "disinterested
persons" within the meaning of Rule 16b-3 under the Exchange Act. The Board may
from time to time remove members from, or add members to, the Committee.
Vacancies on the Committee, however caused, shall be filled by the Board. The
Board may, without amendment of the Plan, transfer the duties of the Committee
to another committee meeting the requirements of Rule 16b-3.

3.3 AUTHORITY OF THE COMMITTEE. The Committee shall have full power
and authority to administer the Plan in its sole discretion, including the
authority to:

(a) Construe and interpret the Plan and any Award Agreement;

(b) Promulgate, amend, and rescind rules and procedures
relating to the implementation of the Plan;

(d) Determine the number and types of Awards to be granted to
each such Participant;

(e) Determine the number of Shares, or Share equivalents, to
be subject to each Award;
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(f) Determine the option price, purchase price, base price, or
similar feature for any Award; and

(g) Determine all the terms and conditions of all Award
Agreements, consistent with the requirements of the Plan.

Decisions of the Committee, or any delegate as permitted by the Plan, shall be
final, conclusive, and binding on all Participants.

3.4 DELEGATION. Notwithstanding the foregoing, the
Committee may delegate to one or more officers of Bancorp the authority to
exercise on behalf of the Committee any power, authority, or discretion of the
Committee with respect to Awards granted to Participants who are not Reporting
Persons. Matters which the Committee may delegate include, but are not limited
to: (a) determining the recipients, types, amounts, and terms of Awards to be
granted to Participants who are not Reporting Persons; (b) the acceleration of
the time when such an Award becomes Vested; and (c) elections and determinations
with respect to exercise or payment of such an Award.

3.5 LIABILITY OF COMMITTEE MEMBERS. No member of the Committee shall
be liable for any action or determination made in good faith with respect to the
Plan, any Award, or any Participant.

3.6 COSTS OF PLAN. The costs and expenses of administering the Plan
shall be borne by Bancorp.

ARTICLE 4
DURATION OF THE PLAN AND SHARES SUBJECT TO THE PLAN

4.1 DURATION OF THE PLAN. The Plan is effective October 21, 1993,
subject to approval by Bancorp's shareholders as provided in Article 17. The
Plan shall remain in effect until Awards have been granted covering all the
available Shares or the Plan is otherwise terminated by the Board. Termination
of the Plan shall not affect outstanding Awards.

4.2 SHARES SUBJECT TO THE PLAN.

(a) SHARES. The shares which may be made subject to Awards under the
Plan shall be Shares of Common Stock, which may be either authorized and
unissued Shares or reacquired Shares. No fractional Shares shall be issued
under the Plan.

(b) GENERAL LIMITATION ON AWARDS. Subject to adjustment pursuant to
Article 14, the maximum number of Shares for which Awards may be granted under
the Plan shall not exceed 6,000,000 Shares, plus the number of Shares that
remain available for grants of options under the Prior Plans as of the date the
Plan is approved by Bancorp's shareholders as provided in Article 17. The
aggregate number of Shares which may be subject to
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Awards under the Plan and options under the Prior Plans (including options
previously granted and exercised or outstanding under the Prior Plans as of the
effective date of the Plan) shall not exceed 8,250,000 Shares, as adjusted under
the Plan and the Prior Plans to reflect changes in capitalization.

(c) ANNUAL LIMITATION. Subject to adjustment pursuant to Article 14,
the maximum number of Shares for which Restricted Share Awards may be granted
during any calendar year shall not exceed 400,000 Shares.

(d) CANCELLATION OR EXPIRATION OF AWARDS. If an Award under the Plan
(or any option previously granted under the Prior Plans) is canceled or expires
for any reason prior to having been fully Vested or exercised by a Participant
or is settled in cash in lieu of Shares or is exchanged for other Awards, all
Shares covered by such Awards (or options under the Prior Plans) shall again
become available for additional Awards under the Plan.

ARTICLE 5
ELIGIBILITY

Officers and other key employees of Bancorp and its Subsidiaries
(including employees who may also be directors of Bancorp or a Subsidiary) who,
in the Committee's judgment, are or will be contributors to the long-term
success of Bancorp shall be eligible to receive Awards under the Plan.

ARTICLE 6
AWARDS

6.1 TYPES OF AWARDS. The types of Awards that may be granted under
the Plan are:

(a) Options governed by Article 7 of the Plan;

(b) Stock Appreciation Rights governed by Article 8 of the
Plan;

(d) Performance Share Awards governed by Article 10 of the
Plan; and

(e) Other Stock-Based Awards or combination awards governed by
Article 11 of the Plan.

In the discretion of the Committee, any Award may be granted alone, in addition
to, or in tandem with other Awards under the Plan.
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6.2 GENERAL. Subject to the limitations of the Plan, the Committee
may cause Bancorp to grant Awards to such Participants, at such times, of such
types, in such amounts, for such periods, with such option prices, purchase
prices, or base prices, and subject to such terms, conditions, limitations, and
restrictions as the Committee, in its discretion, shall deem appropriate.
Awards may be granted as additional compensation to a Participant or in lieu of
other compensation to such Participant. A Participant may receive more than one
Award and more than one type of Award under the Plan.

6.3 NONUNIFORM DETERMINATIONS. The Committee's determinations under
the Plan or under one or more Award Agreements, including without limitation,
(a) the selection of Participants to receive Awards, (b) the type, form, amount,
and timing of Awards, (c) the terms of specific Award Agreements, and (d)
elections and determinations made by the Committee with respect to exercise or
payments of Awards, need not be uniform and may be made by the Committee
selectively among Participants and Awards, whether or not Participants are
similarly situated.

6.4 AWARD AGREEMENTS. Each Award shall be evidenced by a written
Award Agreement between Bancorp and the Participant. Award Agreements may,
subject to the provisions of the Plan, contain any provision approved by the
Committee.

6.5 PROVISIONS GOVERNING ALL AWARDS. All Awards shall be subject to
the following provisions:

(a) ALTERNATIVE AWARDS. If any Awards are designated in their
Award Agreements as alternative to each other, the exercise of all
or part of one Award automatically shall cause an immediate equal
(or pro rata) corresponding termination of the other alternative
Award or Awards.

(b) RIGHTS AS SHAREHOLDERS. No Participant shall have any
rights of a shareholder with respect to Shares subject to an Award
until such Shares are issued in the name of the Participant.

(c) EMPLOYMENT RIGHTS. Neither the adoption of the Plan nor
the granting of any Award shall confer on any person the right to
continued employment with Bancorp or any Subsidiary, nor shall it
interfere in any way with the right of Bancorp or a Subsidiary to
terminate such person's employment at any time for any reason,
with or without cause.

(d) NONTRANSFERABLE. Each Award (other than Shares after they
Vest) shall not be transferable otherwise than by will or the laws
of descent and distribution and shall be exercisable (if exercise
is required) during the lifetime of the Participant, only by the
Participant or, in the event the Participant becomes legally
incompetent, by the Participant's guardian or legal
representative. Notwithstanding the foregoing, Awards may be
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<PAGE>
surrendered to Bancorp pursuant to Section 6.5(h) in connection with the
payment of the purchase or option price of another Award.

(e) TERMINATION OF EMPLOYMENT. The terms and conditions under
which an Award may be exercised, if at all, after a Participant's
termination of employment shall be determined by the Committee and
specified in the applicable Award Agreement.

(f) PAYMENT OF PURCHASE PRICE AND WITHHOLDING. The Committee,
in its discretion, may include in any Award Agreement a provision
permitting the Participant to pay the purchase or option price, if
any, for the Shares or other property issuable pursuant to the
Award, or the Participant's federal, state, or local tax, or tax
withholding, obligation with respect to such issuance in whole or
in part by any one or more of the following:

(i) By delivering previously owned Shares (including
Restricted Shares or Performance Shares, whether or not
Vested);

(ii) By surrendering other outstanding Vested Awards
under the Plan denominated in Shares or in Share equivalent
units;

(iii) By reducing the number of Shares or other
property otherwise Vested and issuable pursuant to the
Award;

(iv) By delivering to Bancorp a promissory note
payable on such terms and over such period as the Committee
shall determine;

(v) By delivery (in a form satisfactory to the
Committee) of an irrevocable direction to a securities
broker acceptable to the Committee:

(A) To sell Shares subject to the Award and
to deliver all or a part of the sales proceeds to
Bancorp in payment of all or a part of the option
price and taxes or withholding taxes attributable
to the issuance; or

(B) To pledge Shares subject to the Award to
the broker as security for a loan and to deliver
all or a part of the loan proceeds to Bancorp in
payment of all or a part of the option
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<PAGE>
price and taxes or withholding taxes attributable to the
issuance; or

(vi) In any combination of the foregoing or in any
other form approved by the Committee.

If Restricted Shares or Performance Shares are surrendered in full
or partial payment of the purchase or option price of Shares
issuable under an Award, a corresponding number of the Shares
issued upon exercise of the Award shall be Restricted Shares or
Performance Shares subject to the same Restrictions as the
surrendered Restricted Shares or Performance Shares. Shares
withheld or surrendered as described above shall be valued based
on their Fair Market Value on the date of the transaction. Any
Shares withheld or surrendered with respect to a Reporting Person
shall be subject to such additional conditions and limitations as
the Committee may impose to comply with the requirements of the
Exchange Act.

(g) REPORTING PERSONS. With respect to all
Awards granted to Reporting Persons:

(i) Options (or other Awards
requiring exercise) shall not be
exercisable until at least six months
after the date the Award was granted,
except in the case of the death or
Disability of the Participant; and

(ii) Shares issued pursuant to any
Award (other than Options or other
Awards requiring exercise) may not be
sold by the Participant for at least six
months after acquisition, except in the
case of the death or Disability of the
Participant;

provided, however, that (unless an Award Agreement
expressly provides otherwise) the limitation of
this Section 6.5(g) shall apply only if or to the
extent required by Rule 16b-3 under the Exchange
Act. Award Agreements for Awards to Reporting
Persons shall also comply with any future
restrictions imposed by such Rule 16b-3.

(h) SERVICE PERIODS. At the time of
granting Awards, the Committee may specify, by
resolution or in the Award Agreement, the period
or periods of service performed or to be performed
by the Participant in connection with the grant of
the Award.

(i) CHANGE IN CONTROL PROVISIONS. Each
Award Agreement with respect to an Award granted
after November 17, 1994, shall include a provision
that as of a Change in Control Date:
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<PAGE>
(A) An Option or other
Award requiring exercise shall
become fully and immediately
exercisable, notwithstanding
any other limitations on
exercise;

(B) An Award subject to
Restrictions shall become
fully Vested; or

(C) A Performance Share
or other Award subject to
Performance Goals (other than
an Option Award where the
exercisability of the Option
is wholly or partially based
on attaining Performance
Goals, which shall be governed
by paragraph A above) shall be
deemed to have been earned to
the extent of the greater of:

(1) A number
of Shares determined
by the Committee
based on the extent
to which the
Performance Goals
specified in the
Award Agreement have
been achieved during
the portion of the
Performance Cycle
ending on the last
day of the last
fiscal quarter of
Bancorp ending on or
before the Change in
Control Date; or

(2) A pro rata
number of Shares
equal to the product
of the Target Shares
identified in the
Award Agreement
multiplied by a
fraction with a
numerator equal to
the whole number of
calendar months
beginning on or
after the Grant Date
and ending on or
before the Change in
Control Date and a
denominator equal to
the number of
calendar months in
the entire
Performance Cycle
specified in the
Award Agreement.

Each Award Agreement with respect to outstanding
Option Awards (other than Option Awards where the
exercisability of the Option can be accelerated
based on attaining Performance Goals) granted
before November 17, 1994,
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<PAGE>
shall be amended to include similar Change in Control provisions.
However, each Award Agreement that includes a Change in Control
provision shall be subject to the following limitation:

If the Committee in good faith
adopts a resolution that (i) the use of
the pooling method of accounting with
respect to the Change in Control
transaction would be materially
beneficial to Bancorp, and (ii) the
acceleration of the exercisability,
Vesting, or earning of the Award in
connection with the Change in Control
would have a materially adverse effect
on Bancorp's ability to use the pooling
method of accounting with respect to the
Change in Control, then the Award shall
not be accelerated on account of the
Change in Control.

Unless the Committee expressly provides otherwise
in a specific Award Agreement, an Award shall
become exercisable, become Vested, or become
earned as of a Change in Control Date only if, or
to the extent, such acceleration in the
exercisability, Vesting, or earning of the Award
does not result in an "excess parachute payment"
within the meaning of Section 280G(b) of the Code.

ARTICLE 7
OPTIONS

7.1 TYPES OF OPTIONS. Options granted under the Plan may be in the
form of Statutory Options (including Incentive Stock Options) or Nonqualified
Options. The grant of each Option and the Award Agreement governing each Option
shall identify the Option as an ISO, other Statutory Option, or an NQO. In the
event the Code is amended to provide for tax-favored forms of Statutory Options
other than or in addition to Incentive Stock Options, the Committee may grant
Options under the Plan meeting the requirements of such forms of Statutory
Options.

7.2 GENERAL; LIMITATION ON NUMBER OF OPTIONS. Options shall be
subject to the terms and conditions set forth in Article 6 and this Article 7
and Award Agreements governing Options shall contain such additional terms and
conditions, not inconsistent with the express provisions of the Plan, as the
Committee shall deem desirable. The number of Shares subject to Options granted
under the Plan to any Participant during any five-calendar-year period shall not
exceed 500,000.

7.3 OPTION PRICE. Each Award Agreement for Options shall state the
option exercise price per Share of Common Stock purchasable under the Option,
which shall not be less than 100 percent of the Fair Market Value of a Share on
the date an Option is granted.
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<PAGE>
7.4 OPTION TERM. The Award Agreement for each Option shall specify
the term, which shall not exceed 10 years from the date of grant, during which
the Option may be exercised, as determined by the Committee.

7.5 TIME OF EXERCISE. The Award Agreement for each Option shall
specify, as determined by the Committee:

(a) The time or times when the Option shall become exercisable
and whether the Option shall become exercisable in full or in
graduated amounts based on: (i) continuation of employment over a
period specified in the Award Agreement, (ii) satisfaction of
performance goals or criteria specified in the Award Agreement, or
(iii) a combination of continuation of employment and satisfaction
of performance goals or criteria;

(b) Such other terms, conditions, and restrictions as to when
the Option may be exercised as shall be determined by the
Committee; and

(c) The extent, if any, that the Option shall remain
exercisable after the Participant ceases to be an employee of
Bancorp or a Subsidiary.

An Award Agreement for an Option may, in the discretion of the Committee,
provide whether, and to what extent, the time when an Option becomes exercisable
shall be accelerated or otherwise modified in the event of the death,
Disability, or Retirement of the Participant. The Committee may, at any time in
its discretion, accelerate the time when all or any portion of an outstanding
Option becomes exercisable.

7.6 SPECIAL RULES FOR INCENTIVE STOCK OPTIONS. In the case of an
Option designated as an Incentive Stock Option, the terms of the Option and the
Award Agreement shall conform with the statutory and regulatory requirements
specified pursuant to Section 422 of the Code, as in effect on the date such ISO
is granted. ISOs may be granted only to employees of Bancorp or a Subsidiary.
ISOs may not be granted under the Plan after ten years following the date
specified in Section 4.1, unless the ten-year limitation of Section 422(b)(2) of
the Code is removed or extended.

7.7 RESTRICTED SHARES. In the discretion of the Committee, the Award
Agreement for an Option may provide that the Shares issuable upon exercise of an
Option shall be Restricted Shares, subject to Restrictions specified in the
Award Agreement.

7.8 RELOAD OPTIONS. The Committee, in its discretion, may provide in
an Award Agreement for an Option that in the event all or a portion of the
Option is exercised by the Participant using previously acquired Shares, the
Participant shall automatically be granted (subject to the available pool of
Shares subject to grants of Awards as specified in Section 4.2 of the Plan) a
replacement Option (with an option price equal to the Fair Market Value of a
Share on the date of such exercise) for a number of Shares equal to (or equal to
a portion of) the number of Shares surrendered upon exercise of the Option.
Such
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<PAGE>
Reload Option features may be subject to such terms and conditions as the
Committee shall determine, including without limitation, a condition that the
Participant retain the Shares issued upon exercise of the Option for a specified
period of time.

ARTICLE 8
STOCK APPRECIATION RIGHTS

8.1 GENERAL; LIMITATION ON NUMBER OF SARS. Stock Appreciation Rights
or SARs shall be subject to the terms and conditions set forth in Article 6 and
this Article 8 and Award Agreements governing Stock Appreciation Rights shall
contain such additional terms and conditions, not inconsistent with the express
terms of the Plan, as the Committee shall deem desirable. The number of Shares
subject to SARs granted under the Plan to any Participant during any
five-calendar-year period shall not exceed 500,000.

8.2 NATURE OF STOCK APPRECIATION RIGHT. A Stock Appreciation Right
is an Award entitling a Participant to receive an amount equal to the excess
(or, if the Committee shall determine at the time of grant, a portion of the
excess) of the Fair Market Value of a Share of Common Stock on the date of
exercise of the SAR over the base price, as described below, on the date of
grant of the SAR, multiplied by the number of Shares with respect to which the
SAR shall have been exercised. The base price shall be designated by the
Committee in the Award Agreement for the SAR and shall be the Fair Market Value
of a Share on the grant date of the SAR or such other higher price as the
Committee shall determine.

8.3 EXERCISE. A Stock Appreciation Right may be exercised by a
Participant in accordance with procedures established by the Committee. The
Committee may also provide that a SAR shall be automatically exercised on one or
more specified dates or upon the satisfaction of performance goals or criteria
or one or more other conditions specified by the Committee in the SAR Award
Agreement. In the case of SARs granted to Reporting Persons, exercise of the
SAR shall be limited by the Committee to the extent required to comply with the
applicable requirements of Rule 16b-3 under the Exchange Act.

8.4 FORM OF PAYMENT. Payment upon exercise of a Stock Appreciation
Right may be made in cash, in installments, in Shares, or in any other manner or
combination of such methods, or in any other form as the Committee, in its
discretion, shall determine.

ARTICLE 9
RESTRICTED SHARE AWARDS

9.1 GENERAL. Restricted Share Awards shall be subject to the terms
and conditions of Article 6 and this Article 9 and Award Agreements governing
Restricted Shares shall contain such additional terms and conditions, not
inconsistent with the express provisions of the Plan, as the Committee shall
deem desirable.
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<PAGE>
9.2 NATURE OF RESTRICTED SHARE AWARDS. A Restricted Share is an
Award of Shares transferred to a Participant subject to such terms and
conditions as the Committee deems appropriate, including, without limitation,
restrictions on the sale, assignment, transfer, or other disposition of such
Restricted Shares and may include a requirement that the Participant forfeit
such Restricted Shares back to Bancorp upon termination of Participant's
employment for specified reasons within a specified period of time or upon other
conditions, as set forth in the Award Agreement for such Restricted Shares.
Each Participant receiving a Restricted Share may be issued a stock certificate
in respect of such Shares, registered in the name of such Participant, and
bearing a legend referring to the Restrictions set forth in the Award Agreement,
and shall execute a stock power in blank with respect to the Shares evidenced by
such certificate. The certificate evidencing such Restricted Shares and the
stock power shall be held in custody by Bancorp until the Restrictions thereon
shall have lapsed.

9.3 RESTRICTION PERIOD. Award Agreements for Restricted Share Awards
shall provide that Restricted Shares may not be transferred, and may provide
that, in order for a Participant to Vest in such Restricted Shares, the
Participant must remain in the employment of Bancorp or its Subsidiaries,
subject to relief for reasons specified in the Award Agreement, for a period
commencing on the grant date of the Award and ending on such later date or dates
as the Committee may designate at the time of the Award (the "Restriction
Period"). During the Restriction Period, a Participant may not sell, assign,
transfer, pledge, encumber, or otherwise dispose of a Restricted Share Award or
the Restricted Shares received under or governed by the Restricted Share Award
(other than surrender to Bancorp pursuant to Section 6.5(h)). The Committee, in
its sole discretion, may provide for the lapse of restrictions in installments
during the Restriction Period. Upon expiration of the applicable Restriction
Period (or lapse of Restrictions during the Restriction Period where the
Restrictions lapse in installments) the Participant shall be entitled to
settlement of the Restricted Share Award or portion thereof, as the case may be.
Although Restricted Share Awards shall usually Vest based on continued
employment and Performance Share Awards under Article 10 shall usually Vest
based on attainment of Performance Goals, the Committee, in its discretion, may
condition Vesting of Restricted Share Awards on attainment of Performance Goals
as well as continued employment. In such case, the Restriction Period for such
a Restricted Share Award shall include the period prior to satisfaction of the
Performance Goals. The Committee, in its discretion, may accelerate the Vesting
of any Restricted Share Award.

9.4 FORFEITURE. If a Participant ceases to be an employee of Bancorp
or a Subsidiary during the Restriction Period for any reason other than reasons
which may be specified in an Award Agreement (such as death, Disability, or
Retirement) or otherwise fails to satisfy the conditions specified in an Award
Agreement, the Award Agreement may require that all non-Vested Restricted Shares
previously granted to the Participant be forfeited and returned to Bancorp.
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<PAGE>
9.5 SETTLEMENT OF RESTRICTED SHARE AWARDS. Upon Vesting of a
Restricted Share Award, the legend on such Shares will be removed and the
Participant's stock power will be returned and the Shares will no longer be
Restricted Shares.

9.6 RIGHTS AS A SHAREHOLDER. A Participant shall have, with respect
to unforfeited Restricted Shares for which a certificate has been issued in the
Participant's name under a Restricted Share Award, all the rights of a
shareholder of Bancorp, including the right to vote the Shares, and the right to
receive any cash dividends. Stock dividends issued with respect to Restricted
Shares shall be treated as additional Restricted Shares covered by the
Restricted Share Award and shall be subject to the same Restrictions.

ARTICLE 10
PERFORMANCE SHARE AWARDS

10.1 GENERAL. Performance Share Awards shall be subject to the terms
and conditions set forth in Article 6 and this Article 10 and Award Agreements
governing Performance Share Awards shall contain such other terms and conditions
not inconsistent with the express provisions of the Plan, as the Committee shall
deem desirable.

10.2 NATURE OF PERFORMANCE SHARE AWARDS. A Performance Share Award
is an Award of Shares granted to a Participant subject to such terms and
conditions as the Committee deems appropriate, including, without limitation,
the requirement that the Participant forfeit such Award or a portion thereof in
the event specified performance criteria are not met within a designated period
of time. A Participant receiving a Performance Share Award may (but need not)
be issued a stock certificate in respect of such Shares, registered in the name
of Participant, and bearing a legend referring to the terms and conditions set
forth in the Award Agreement and shall execute a stock power in blank with
respect to the Shares evidenced by such certificate. Any certificate evidencing
such Performance Shares and the stock power shall be held in custody by Bancorp
until the Performance Goals are satisfied.

10.3 PERFORMANCE CYCLES. For each Performance Share Award, the
Committee shall designate a performance period (the "Performance Cycle") with a
duration to be determined by the Committee in its discretion within which
specified Performance Goals are to be attained. There may be several
Performance Cycles in existence at any one time and the duration of Performance
Cycles may differ from each other.

10.4 PERFORMANCE GOALS. The Committee shall establish Performance
Goals for each Performance Cycle on the basis of such criteria and to accomplish
such objectives as the Committee may from time to time select. Performance
Goals selected by the Committee may include performance criteria for Bancorp, a
Subsidiary, or an operating group, division, or unit of Bancorp and its
Subsidiaries. During any Performance Cycle, the Committee may adjust the
Performance Goals for such Performance Cycle as it deems equitable in
recognition of unusual or nonrecurring events affecting Bancorp, changes in
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<PAGE>
applicable tax laws or accounting principles, or such other factors as the
Committee may determine.

10.5 DETERMINATION OF AWARDS. As soon as practicable after the end
of a Performance Cycle, the Committee shall determine the extent to which
Performance Share Awards have been earned on the basis of performance in
relation to the established Performance Goals.

10.6 TIMING AND FORM OF PAYMENT. Settlement of earned Performance
Shares shall be made to the Participant as soon as practicable after the
expiration of the Performance Cycle and the Committee's determination under
Section 10.5 by the issuance and delivery of unrestricted Shares equal to the
number of earned Performance Shares or by a combination of cash and Performance
Shares, as determined by the Committee.

10.7 RIGHTS AS A SHAREHOLDER. Unless a stock certificate is issued
with respect to a Performance Share Award as provided in Section 10.2, a
Participant shall not have any rights as a shareholder with respect to unearned
Performance Shares. With respect to unearned Performance Shares for which a
certificate has been issued in the Participants name under a Performance Share
Award, a Participant shall have all the rights of a shareholder of Bancorp,
including the right to vote the Shares, and the right to receive any cash
dividends. Stock dividends issued with respect to Performance Shares shall be
treated as additional Performance Shares covered by the Performance Share Award
and shall be subject to the same terms and conditions.

10.8 AWARDS FOR EXECUTIVE OFFICERS. All Performance Share Awards to
executive officers of Bancorp and its Subsidiaries shall be subject to the
following specific requirements:

(a) The Performance Goals shall be Bancorp's Return on Average
Assets ("ROAA") and the extent (expressed as a percentage) by
which Bancorp's Total Shareholder Return ("TSR") exceeds the
median TSR of the Standard and Poors Regional Banks index (the
"TSR Percentage").

(b) The maximum number of Shares which may be granted to any
executive officer pursuant to Performance Share Awards granted in
any calendar year shall not exceed 60,000 (subject to adjustment
pursuant to Article 14.

(c) For Performance Share Awards granted prior to November 17,
1994, upon the occurrence of a Change in Control Date prior to the
expiration of a Performance Cycle, the number of Performance
Shares shall (except as otherwise provided in this Section 10.8(c)
or in Section 10.8(d)) be determined based on the achievement of
the ROAA and TSR Percentage goals during the portion of the
Performance Cycle ending on the last day of the last fiscal
quarter of Bancorp ending on or before the Change in Control
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<PAGE>
Date. However, if the Committee in good faith adopts a resolution that
(i) the use of the pooling method of accounting with respect to the
Change in Control transaction would be materially beneficial to Bancorp
and (ii) the computation of earned Performance Shares as described in
this Section 10.8(c) would have a materially adverse effect on Bancorp's
ability to use the pooling method, then the provisions of this
Section 10.8(c) shall not apply and the earned Performance Shares shall
be computed based on the full Performance Cycle.

(d) Unless the Committee expressly provides otherwise in a
specific Award Agreement, the acceleration of the earning of the
Performance Shares pursuant to the provisions of paragraph 10.8(c)
shall occur only if, or to the extent, such acceleration of the
earning of the Performance Shares does not result in an "excess
parachute payment" within the meaning of Section 280G(b) of the
Code.

ARTICLE 11
OTHER STOCK BASED AND COMBINATION AWARDS

11.1 OTHER STOCK-BASED AWARDS. The Committee may grant other Awards
under the Plan pursuant to which Shares are or may in the future be acquired, or
Awards denominated in or measured by Share equivalent units, including Awards
valued using measures other than the market value of Shares. Other Stock-Based
Awards are not restricted to any specified form or structure and may include,
without limitation, Share purchase warrants, other rights to acquire Shares, and
securities convertible into or redeemable for Shares. The number of Shares
subject to Other Stock-Based Awards granted to any Participant during any
five-calendar-year period shall not exceed 500,000. Such Other Stock-Based
Awards may be granted either alone, in addition to, or in tandem with, any other
type of Award granted under the Plan.

11.2 COMBINATION AWARDS. The Committee may also grant Awards under
the Plan in tandem or combination with other Awards or in exchange of Awards, or
in tandem or combination with, or as alternatives to, grants or rights under any
other employee plan of Bancorp, including the plan of any acquired entity. No
action authorized by this section shall reduce the amount of any existing
benefits or change the terms and conditions thereof without the Participant's
consent.

ARTICLE 12
DEFERRAL ELECTIONS

If a Participant in the Plan who is eligible to participate in the
U. S. Bancorp 1991 Executive Deferred Compensation Plan, or any successor or
other similar deferred compensation plan maintained by Bancorp or a Subsidiary,
makes an effective deferral election under such deferred compensation plan which
covers Awards under this Plan, the payment of cash (or, if permitted by such
deferred compensation plan, the delivery of
- 20 -
<PAGE>
Shares) that would otherwise be due to such Participant by virtue of the
exercise, earn out, or Vesting of an Award under this Plan may be deferred under
the terms of the deferred compensation plan.

ARTICLE 13
DIVIDEND EQUIVALENTS

Restricted Share Awards and Performance Share Awards for which no
certificate is issued in the Participants name before Vesting (and other Awards
other than Options or Awards requiring exercise) may, at the discretion of the
Committee, earn dividend equivalents. In respect of any such Award which is
outstanding on a dividend record date for Common Stock, the Participant may be
credited with an amount equal to the amount of cash or stock dividends that
would have been paid on the Shares covered by such Award, had such covered
Shares been issued and outstanding on such dividend record date. The Committee
shall establish such rules and procedures governing the crediting of dividend
equivalents, including the timing, form of payment, and payment contingencies of
such dividend equivalents, as it deems are appropriate or necessary.

ARTICLE 14
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, ETC.

14.1 PLAN DOES NOT RESTRICT BANCORP. The existence of the Plan and
the Awards granted under the Plan shall not affect or restrict in any way the
right or power of the Board or the shareholders of Bancorp to make or authorize
any adjustment, recapitalization, reorganization, or other change in Bancorp's
capital structure or its business, any merger or consolidation of the Bancorp,
any issue of bonds, debentures, preferred or prior preference stocks ahead of or
affecting Bancorp's capital stock or the rights thereof, the dissolution or
liquidation of Bancorp or any sale or transfer of all or any part of its assets
or business, or any other corporate act or proceeding.

14.2 ADJUSTMENTS BY THE COMMITTEE. In the event of any change in
capitalization affecting the Common Stock of Bancorp, such as a stock dividend,
stock split, recapitalization, merger, consolidation, split-up, combination or
exchange of shares or other form of reorganization, or any other change
affecting the Common Stock, such proportionate adjustments, if any, as the
Committee, in its sole discretion, may deem appropriate to reflect such change,
shall be made with respect to the aggregate number of Shares for which Awards in
respect thereof may be granted under the Plan, the maximum number of Shares
which may be sold or awarded to any Participant, the number of Shares covered by
each outstanding Award, and the base price or purchase price per Share in
respect of outstanding Awards. The Committee may also make such adjustments in
the number of Shares covered by, and price or other value of any outstanding
Awards in the event of a spin-off or other distribution (other than normal cash
dividends), of Bancorp assets to shareholders.
- 21 -
<PAGE>
ARTICLE 15
AMENDMENT AND TERMINATION

Without further approval of Bancorp's shareholders, the Board may at
any time terminate the Plan, or may amend it from time to time in such respects
as the Board may deem advisable, except that the Board may not, without approval
of the shareholders, make any amendment which would (i) materially increase the
benefits accruing to Participants under the Plan, (ii) materially increase the
aggregate number of shares of Common Stock which may be issued under the Plan
(except for adjustments pursuant to Article 14 of the Plan), or (iii) materially
modify the requirements as to eligibility for participation in the Plan.
Without further shareholder approval, the Board or the Committee may amend the
Plan to take into account changes in applicable securities, federal income tax
laws, and other applicable laws. Further, should the provisions of Rule 16b-3,
or any successor rule, under the Exchange Act be amended, the Board or the
Committee, without further shareholder approval, may amend the Plan as necessary
to comply with any modifications to such rule.

ARTICLE 16
MISCELLANEOUS

16.1 TAX WITHHOLDING. Bancorp shall have the right to deduct from
any settlement of any Award under the Plan, including the delivery or vesting of
Shares, any federal, state, or local taxes of any kind required by law to be
withheld with respect to such payments or to take such other action as may be
necessary in the opinion of Bancorp to satisfy all obligations for the payment
of such taxes. The recipient of any payment or distribution under the Plan
shall make arrangements satisfactory to Bancorp for the satisfaction of any such
withholding tax obligations. Bancorp shall not be required to make any such
payment or distribution under the Plan until such obligations are satisfied.

16.2 UNFUNDED PLAN. The Plan shall be unfunded and Bancorp shall not
be required to segregate any assets that may at any time be represented by
Awards under the Plan. Any liability of Bancorp to any person with respect to
any Award under the Plan shall be based solely upon any contractual obligations
that may be effected pursuant to the Plan. No such obligation of Bancorp shall
be deemed to be secured by any pledge of, or other encumbrance on, any property
of Bancorp.

16.3 PAYMENTS TO TRUST. The Committee is authorized to cause to be
established a trust agreement or several trust agreements whereunder the
Committee may make payments of amounts due or to become due to Participants in
the Plan.

16.4 ANNULMENT OF AWARDS. Any Award Agreement may provide that the
grant of an Award payable in cash is revocable until cash is paid in settlement
thereof or that grant of an Award payable in Shares is revocable until the
Participant becomes entitled to the certificate (without Restriction or legend)
in settlement thereof. In the event the employment of a Participant is
terminated for cause (as defined below), any Award which
- 22 -
<PAGE>
is revocable shall be annulled as of the date of such termination for cause.
For the purpose of this Section 16.4, the term "for cause" shall have (in the
event the Participant has an employment agreement) the meaning set forth in the
Participant's employment agreement or otherwise means any discharge (or removal)
for material or flagrant violation of the policies and procedures of Bancorp or
for other job performance or conduct which is materially detrimental to the best
interests of Bancorp, as determined by the Committee.

16.5 ENGAGING IN COMPETITION WITH BANCORP. Any Award Agreement may
provide that, if a Participant terminates employment with Bancorp or a
Subsidiary for any reason whatsoever, and within a period of time (as specified
in the Award Agreement) after the date of such termination accepts employment
with any competitor of (or otherwise engages in competition with) Bancorp, the
Committee, in its sole discretion, may require such Participant to return to
Bancorp the economic value of any Award that is realized or obtained (measured
at the date of exercise, Vesting, or payment) by such Participant at any time
during the period beginning on the date that is six months prior to the date of
such Participant's termination of employment with Bancorp.

16.6 OTHER BANCORP BENEFIT AND COMPENSATION PROGRAMS. Payments and
other benefits received by a Participant under an Award made pursuant to the
Plan shall not be deemed a part of a Participant's regular, recurring
compensation for purposes of the termination indemnity or severance pay law of
any state or country and shall not be included in, nor have any effect on, the
determination of benefits under any other employee benefit plan or similar
arrangement provided by Bancorp or a Subsidiary unless expressly so provided by
the Award Agreement or by such other plan or arrangements. Awards under the
Plan may be made in combination with or in tandem with, or as alternatives to,
grants, awards, or payments under any other Bancorp or Subsidiary plans,
arrangements, or programs. The Plan notwithstanding, Bancorp or any Subsidiary
may adopt such other compensation programs and additional compensation
arrangements as it deems necessary to attract, retain, and reward employees for
their service with Bancorp and its Subsidiaries.

16.7 SECURITIES LAW RESTRICTIONS. No Shares shall be issued under
the Plan unless counsel for Bancorp shall be satisfied that such issuance will
be in compliance with applicable federal and state securities laws.
Certificates for Shares delivered under the Plan may be subject to such
stop-transfer orders and other restrictions as the Committee may deem advisable
under the rules, regulations, and other requirements of the Securities and
Exchange Commission, any stock exchange upon which the Common Stock is then
listed, and any applicable federal or state securities law. The Committee may
cause a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.

16.8 GOVERNING LAW. Except with respect to references to the Code or
federal securities laws, the Plan and all actions taken thereunder shall be
governed by and construed in accordance with the laws of the state of Oregon.
- 23 -
<PAGE>
ARTICLE 17
SHAREHOLDER APPROVAL

The amendment and restatement of the Plan effective November 17, 1994,
is expressly subject to the approval of the Plan, as amended and restated, by
the holders of a majority of the Shares present, or represented, and entitled to
vote on such approval at the 1995 annual meeting of Bancorp's shareholders.
- 24 -

<PAGE>
Exhibit 10.18

DESCRIPTION OF HEALTH INSURANCE PREMIUM
REIMBURSEMENT PLAN FOR U. S. BANCORP DIRECTORS

U. S. Bancorp shall reimburse a portion of the cost of premiums
incurred by any non-employee director of U. S. Bancorp for health care insurance
coverage of such director and his or her dependents upon the director's request,
provided that no portion of such premiums are reimbursed or subsidized by any
other employer. Such reimbursement and the criteria for eligibility shall be
subject to the same conditions and limits as are applicable to active employees
of U. S. Bancorp.

<PAGE>
Exhibit 12.1

U. S. BANCORP AND SUBSIDIARIES
COMPUTATION OF RATIOS OF CONSOLIDATED EARNINGS TO FIXED CHARGES

<TABLE>
<CAPTION>
For the Years Ended December 31,
-----------------------------------------------------
1994 1993 1992 1991 1990
--------- --------- --------- --------- ---------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Considering Interest on Deposits as an Operating Expense
Net income.................................................. $ 151,495 $ 257,949 $ 148,184 $190,926 $190,791
Accounting changes.......................................... -- -- 59,890 -- --
Income taxes................................................ 64,601 126,300 92,548 84,534 75,058
--------- --------- --------- --------- ---------
Earnings before income taxes and accounting changes....... 216,096 384,249 300,622 275,460 265,849
--------- --------- --------- --------- ---------
Add fixed charges
Interest on borrowed funds including capitalized
interest................................................. 173,826 139,890 183,214 245,685 313,807
Interest income from federal funds sold (A)............... (2,591) (4,233) (10,851) (23,207) (23,129)
Interest component of leases (B).......................... 15,174 13,985 12,888 11,932 10,505
--------- --------- --------- --------- ---------
Total fixed charges......................................... 186,409 149,642 185,251 234,410 301,183
Less capitalized interest................................. (93) (96) (470) (1,532) (77)
--------- --------- --------- --------- ---------
Fixed charges............................................... 186,316 149,546 184,781 232,878 301,106
--------- --------- --------- --------- ---------
Earnings before income taxes, accounting changes and fixed
charges.................................................... $ 402,412 $ 533,795 $ 485,403 $508,338 $566,955
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Ratio of earnings to total fixed charges.................... 2.16x 3.57x 2.62x 2.17x 1.88x
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Considering Interest on Deposits as Fixed Charges
Fixed charges as shown above................................ $ 186,316 $ 149,642 $ 185,251 $234,410 $301,183
Interest on deposits........................................ 344,194 365,791 448,372 625,166 712,103
--------- --------- --------- --------- ---------
Total fixed charges......................................... 530,510 515,433 633,623 859,576 1,013,286
Less capitalized interest................................... (93) (96) (470) (1,532) (77)
--------- --------- --------- --------- ---------
Fixed charges............................................... 530,417 515,337 633,153 858,044 1,013,209
Add earnings before income taxes and accounting changes..... 216,096 384,249 300,622 275,460 265,849
--------- --------- --------- --------- ---------
Earnings before income taxes, accounting changes and fixed
charges.................................................... $ 746,513 $ 899,586 $ 933,775 $1,133,504 $1,279,058
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Ratio of earnings to fixed charges.......................... 1.41x 1.75x 1.47x 1.32x 1.26x
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
<FN>
- ------------------------------
(A) Approximates interest expense related to federal funds purchased
transactions for purposes other than the funding of banking subsidiaries'
operations.
(B) Interest component of leases includes imputed interest on capitalized
leases and approximately one-third of rental expense, which approximates
the interest component of operating leases.
</TABLE>

<PAGE>
Exhibit 12.2

U. S. BANCORP AND SUBSIDIARIES
CAPITAL RATIOS

<TABLE>
<CAPTION>
1994 1993 1992 1991 1990
------------- ------------- ------------- ------------- -------------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Total assets as reported.............. $ 21,816,409 $ 21,415,490 $ 20,741,147 $ 18,875,137 $ 18,547,518
Shareholders equity as reported....... 1,777,285 1,818,195 1,631,308 1,406,380 1,267,095
Tier 1 capital........................ 1,627,619 1,608,921 1,476,022 1,260,806 1,109,051
Total capital......................... 2,192,037 2,154,778 1,993,196 1,640,360 1,602,550
Weighted risk assets.................. 19,873,947 18,372,104 17,274,808 16,686,657 16,627,459
Adjusted quarterly average assets..... 21,178,250 21,024,728 20,605,400 18,420,444 18,742,377

Ratios
Tier 1 capital to weighted risk
assets............................... 8.19% 8.76% 8.54% 7.56% 6.67%
Total capital to weighted risk
assets............................... 11.03% 11.73% 11.54% 9.83% 9.64%
Tier 1 capital to adjusted quarterly
average assets (leverage ratio)...... 7.69% 7.65% 7.16% 6.84% 5.92%
</TABLE>

<PAGE>
Exhibit 12.3

U. S. BANCORP AND SUBSIDIARIES

COMPUTATION OF RATIOS ON A BEFORE ACCOUNTING CHANGE BASIS

<TABLE>
<CAPTION>
Year Ended
December 31,
1992
------------
(In
Thousands)
<S> <C>
Income before cumulative effect of accounting changes............................................... $ 208,074
Less preferred dividend requirement................................................................. (5,349)
------------
Income before cumulative effect of accounting changes applicable to common stock.................... $ 202,725
------------
------------
Average common equity before accounting changes..................................................... $1,468,593
Adjustment for cumulative effect of accounting changes.............................................. (59,890)
------------
Average common equity, adjusted for accounting changes.............................................. $1,408,703
------------
------------
Return on average common equity..................................................................... 13.80%
</TABLE>

<PAGE>
ORGANIZATION CHART OF
U. S. BANCORP SUBSIDIARIES
AS OF MARCH 1, 1995

STATE OR OTHER
JURISDICTION OF
INCORPORATION OR
SUBSIDIARY NAME ORGANIZATION

ARIEL GLEN L. P., INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
BANDON L. P., INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
BOARDMAN L. P., INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
BOULDER CREEK L. P., INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
BRANDENWOOD L. P., INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
BRISTOL SQUARE L. P., INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
COMPASS GROUP, INC. Washington
(Wholly-owned subsidiary of U. S. Bancorp)
EATON L. P., INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
FAWNBROOK L. P., INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
FB II L. P., INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
FIRST STATE BANK OF OREGON Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
GRAHAM L. P., INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
HERITAGE PLACE L. P., INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
KING'S GARDEN L. P., INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)

<PAGE>

STATE OR OTHER
JURISDICTION OF
INCORPORATION OR
SUBSIDIARY NAME ORGANIZATION

KIRKLAND L. P., INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
MCKENZIE MEADOW L. P., INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
MEADOWBROOK L. P., INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
MEMBERSHIP SERVICES, INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
MT. HOOD LIFE INSURANCE, INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
1000 VIRGINIA L. P., INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
QUALIVEST CAPITAL MANAGEMENT, INC. Oregon
(Wholly-owned subsidiary of United States National Bank
of Oregon)
ST. JAMES L. P., INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
ST. JOHN'S COMMON L. P., INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
TIGARD PALOMINO L. P., INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
TRUCKEE PINES L. P., INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
U. S. BANCORP CAPITAL CORPORATION Washington
(Wholly-owned subsidiary of U. S. Bank of Washington,
National Association)
U. S. BANCORP FINANCIAL, INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
dba U. S. Bancorp Financial (Los Angeles County, CA)
U. S. BANCORP INSURANCE Oregon
(Wholly-owned subsidiary of First State Bank of Oregon)

2
<PAGE>

STATE OR OTHER
JURISDICTION OF
INCORPORATION OR
SUBSIDIARY NAME ORGANIZATION

U. S. BANCORP INSURANCE AGENCY, INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
dba Mt. Hood Insurance Agency
(Arizona, Montana, Washington and Wyoming)
dba Mt. Hood Credit Life Insurance Agency, Inc.
(Arizona, Montana, Oregon, Utah, Washington)
U. S. BANCORP LEASING & FINANCIAL Oregon
(Wholly-owned subsidiary of United States National Bank of Oregon)
dba U. S. Bancorp Leasing & Financial, Inc.
(Arizona and Washington)
U. S. BANCORP MORTGAGE COMPANY Oregon
(Wholly-owned subsidiary of United States National Bank of Oregon)
U. S. BANCORP SECURITIES Oregon
(Wholly-owned subsidiary of United States National Bank of Oregon)
dba U. S. Bancorp Brokerage, Inc. (Washington)
U. S. BANK (CANADA) Canada
(Wholly-owned subsidiary of United States National Bank of Oregon)
U. S. BANK INSURANCE AGENCY, INC. Oregon
(Wholly-owned subsidiary of United States National Bank of Oregon)
dba U. S. Bank Insurance (Oregon)
U. S. BANK OF CALIFORNIA California
(Wholly-owned subsidiary of U. S. Bancorp)
dba U. S. Bank (California)
dba U. S. Bank Insurance (Oregon)
U. S. BANK OF IDAHO, NATIONAL ASSOCIATION United States
(Wholly-owned subsidiary of U. S. Bancorp)
U. S. BANK OF NEVADA Nevada
(Wholly-owned subsidiary of U. S. Bancorp)
U. S. BANK OF SOUTHWEST WASHINGTON Washington
(Wholly-owned subsidiary of U. S. Bancorp)
dba U. S. Bank (Washington)

3
<PAGE>

STATE OR OTHER
JURISDICTION OF
INCORPORATION OR
SUBSIDIARY NAME ORGANIZATION

U. S. BANK OF WASHINGTON, NATIONAL ASSOCIATION United States
(Wholly-owned subsidiary of U. S. Bancorp)
dba U. S. Bank (Washington)
U. S. BANK, NATIONAL ASSOCIATION United States
(Wholly-owned subsidiary of Membership Services, Inc.)
U. S. RESTCO INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp; trade name,
Atwaters)
U. S. SAVINGS BANK OF WASHINGTON Washington
(Wholly-owned subsidiary of U. S. Bancorp)
U.S. TRADE SERVICES, INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
U. S. WORLD TRADE CORPORATION Oregon
(Wholly-owned subsidiary of U. S. Bancorp)
UNITED STATES NATIONAL BANK OF OREGON United States
(Wholly-owned subsidiary of U. S. Bancorp)
dba U. S. Bank
dba CES Associates (Oregon)
dba USBANCO (Oregon)
WILLIAMS & MORRIS L. P., INC. Oregon
(Wholly-owned subsidiary of U. S. Bancorp)

<PAGE>
Exhibit 23

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration Statement Nos.
2-99615, 33-18706, 33-28785, 33-39765, 33-39860, 33-39861, 33-71904, and
33-83158 of U.S. Bancorp on Form S-8 and Nos. 33-15492, 33-43407, 33-48249,
33-64318, and 33-86472 on Form S-3 of our report dated March 6, 1995 (which
expresses an unqualified opinion and includes an explanatory paragraph
relating to U.S. Bancorp's changes in method of accounting for investment
securities and postretirement and postemployment benefits), appearing in the
Annual Report on Form 10-K of U.S. Bancorp for the year ended December 31,
1994.

DELOITTE & TOUCHE LLP

March 6, 1995

<PAGE>
Exhibit 24

POWER OF ATTORNEY

Each person whose signature appears below designates and appoints GERRY B.
CAMERON, STEVEN P. ERWIN, ROBERT D. GEDDES, SHERYL W. DAWSON, and DEBORAH B.
GOLDBERG, and each of them, true and lawful attorneys-in-fact and agents to sign
the annual report on Form 10-K of U. S. Bancorp, an Oregon corporation, for the
year ended December 31, 1994, and to file said report, with all exhibits
thereto, with the Securities and Exchange Commission under the Securities
Exchange Act of 1934. Each person whose signature appears below also grants
full power and authority to these attorneys-in-fact and agents to perform every
act and execute any instruments that they deem necessary or desirable in
connection with said report, as fully as he could do in person, hereby ratifying
and confirming all that the attorneys-in-fact and agents or their substitutes
may lawfully do or cause to be done.

IN WITNESS WHEREOF, this power of attorney has been executed by each of the
undersigned as of the 16th day of February, 1995.

SIGNATURE TITLE
- --------- -----

Chairman and Chief Executive Officer, President
/s/ GERRY B. CAMERON and Director (Principal Executive Officer)
- ------------------------
Gerry B. Cameron
Executive Vice President and Chief Financial
Officer (Principal Financial and Principal
/s/ STEVEN P. ERWIN Accounting Officer)
- ------------------------
Steve P. Erwin

/s/ ROGER L. BREEZLEY Director
- ------------------------
Roger L. Breezley

/s/ FRANKLIN G. DRAKE Director
- ------------------------
Franklin G. Drake

/s/ JOSHUA GREEN III Director
- ------------------------
Joshua Green III

/s/ ROBERT S. MILLER, JR. Director
- ------------------------
Robert S. Miller, Jr.

/s/ PAUL A. REDMOND Director
- ------------------------
Paul A. Redmond

/s/ N. STEWART ROGERS Director
- ------------------------
N. Stewart Rogers

/s/ ANDREW W. SMITH Director
- ------------------------
Andrew V. Smith

/s/ BENJAMIN R. WHITELEY Director
- ------------------------
Benjamin R. Whiteley

<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 1,488,743
<INT-BEARING-DEPOSITS> 1,461
<FED-FUNDS-SOLD> 429,366
<TRADING-ASSETS> 137,194
<INVESTMENTS-HELD-FOR-SALE> 1,369,437
<INVESTMENTS-CARRYING> 1,404,835
<INVESTMENTS-MARKET> 1,342,638
<LOANS> 15,605,717
<ALLOWANCE> 305,802
<TOTAL-ASSETS> 21,816,409
<DEPOSITS> 15,048,366
<SHORT-TERM> 3,348,544
<LIABILITIES-OTHER> 422,115
<LONG-TERM> 994,870
<COMMON> 0
150,000
490,690
<OTHER-SE> 1,136,595
<TOTAL-LIABILITIES-AND-EQUITY> 21,816,409
<INTEREST-LOAN> 1,258,197
<INTEREST-INVEST> 175,150
<INTEREST-OTHER> 46,738
<INTEREST-TOTAL> 1,480,085
<INTEREST-DEPOSIT> 344,194
<INTEREST-EXPENSE> 517,927
<INTEREST-INCOME-NET> 962,158
<LOAN-LOSSES> 106,868
<SECURITIES-GAINS> (8,145)
<EXPENSE-OTHER> 1,095,315
<INCOME-PRETAX> 216,096
<INCOME-PRE-EXTRAORDINARY> 151,495
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 151,495
<EPS-PRIMARY> 1.40
<EPS-DILUTED> 1.40
<YIELD-ACTUAL> 5.35
<LOANS-NON> 170,802
<LOANS-PAST> 15,612
<LOANS-TROUBLED> 11,307
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 270,229
<CHARGE-OFFS> 106,012
<RECOVERIES> 35,958
<ALLOWANCE-CLOSE> 305,802
<ALLOWANCE-DOMESTIC> 191,487
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 114,315

</TABLE>