OMAHA, NEB. ( TheStreet) -- U.S. Bancorp ( USB - Get Report) shares have risen a mere 4.8% year-to-date, but it's enough to keep Warren Buffett's Berkshire Hathaway ( BRK.A) invested.

Berkshire Hathaway on Monday released copies of a letter sent to the Securities and Exchange Commission in May, in which the insurance firm justified its accounting treatment for U.S. Bancorp and other stock investments, including Kraft ( KFT), according to Reuters.

The SEC inquired earlier this year why Berkshire Hathaway did not write down losses taken on shares in the two companies. According to the article, the SEC sent a letter to the company in April asking why it was not using write downs on shares that it held for over a year which had the potential for $1.86 billion in unrealized losses.

Compared to what Berkshire Hathaway paid for the two stocks when it originally took equity positions, U.S. Bancorp's stock was down 27% as of the end of 2009 and 18% on its Kraft investment, according to a Bloomberg report.

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In a response, Berkshire predicted that shares of the two companies would eventually move higher than the original cost of each stock, based on their earnings potential.

"We believe it is reasonably possible that the market prices of Kraft Foods and U.S. Bancorp will recover to our cost within the next one to two years assuming that there are no material adverse events affecting these companies or the industries in which they operate," Berkshire CFO Marc Hamburg said in the letter, according to Reuters.

The KBW Bank Index is down 4.2% year-to-date.

As of June 30, Berkshire Hathaway was one of the largest institutional owners of U.S Bancorp shares, holding approximately 69 million shares, or 3.6% of the bank's stock, according to Yahoo! Finance. That stake was worth $1.63 billion as of Friday's close, up roughly 5% from June 30.

U.S. Bancorp is the fifth largest bank in the country behind Bank of America ( BAC - Get Report), JPMorgan Chase ( JPM - Get Report), Citigroup ( C - Get Report) and Wells Fargo ( WFC - Get Report). Last week, U.S. Bancorp reported another solid quarter of profit, topping Wall Street estimates. It is one of the few banks these days that is profitably lending - a key indicator to bank investors these days.

The stock got yet another vote of confidence on Friday when it received a buy upgrade by Oppenheimer.

U.S. Bancorp shares were falling marginally on Monday.

--Written by Laurie Kulikowski in New York.

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