U.S. Bancorp, Successor In Interest to West One Bancorp and Subsidiaries, formerly known as Moore Financial Group, Inc. - Page 5

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          in 1981.  During the years in issue, 1986 through 1988, Moore               
          Financial was the parent corporation of IFNB.5                              
               In 1986, IFNB was a "bank", as defined in section 581, that            
          was entitled to and did use the cash method of accounting for               
          Federal income tax purposes.6                                               
               Also during 1986, IFNB was the largest commercial and                  
          agricultural lender in Idaho.  As a large commercial bank, IFNB             
          made numerous loans of different maturities in the ordinary                 
          course of its business, including loans of less than 1 year, 1-             
          year loans, and loans of more than 1 year.                                  
               The short-term obligations in issue here all had periods to            
          maturity of 1 year or less and consisted of the following:                  
          Principal         Accrued Interest                                          
          Description                   Balances           as of 12/31/86             
          Time deposits with banks   1$164,000,000             1$970,214              
          CD's with banks               243,000,000            22,373,410             
          Consumer loans                16,626,503              381,325               
          Commercial and                                                              
          agricultural loans        3356,888,213            36,092,248                
          Total                 4580,514,716              49,817,197                  




               5 After the years at issue (in 1989) Moore Financial changed           
          its name to West One Bancorp (West One).  In 1995, West One                 
          merged into U.S. Bancorp (Old Bancorp).  In 1997, Old Bancorp               
          merged into First Bank System, Inc., a bank holding company,                
          which changed its name to U.S. Bancorp (the petitioner in this              
          case).                                                                      
               6 IFNB switched to the accrual method of accounting for                
          1987, as required by sec. 448, enacted by TRA 1986.  See supra              
          note 4.                                                                     




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