Within the Company, financial performance is measured by major lines of business based on the products and services provided to customers through its distribution channels. These operating segments are components of the Company about which financial information is prepared and is evaluated regularly by management in deciding how to allocate resources and assess performance. The Company has five reportable operating segments:

Corporate and Commercial Banking

Corporate and Commercial Banking offers lending, equipment finance and small-ticket leasing, depository services, treasury management, capital markets services, international trade services and other financial services to middle market, large corporate, commercial real estate, financial institution,

non-profit

and public sector clients.

Consumer and Business Banking

Consumer and Business Banking delivers products and services through banking offices, telephone servicing and sales,

on-line

services, direct mail, ATM processing and mobile devices. It encompasses community banking, metropolitan banking and indirect lending, as well as mortgage banking.

Wealth Management and Investment Services

Wealth Management and Investment Services provides private banking, financial advisory services, investment management, retail brokerage services, insurance, trust, custody and fund servicing through four businesses: Wealth Management, Global Corporate Trust & Custody, U.S. Bancorp Asset Management and Fund Services.

Payment Services

Payment Services includes consumer and business credit cards, stored-value cards, debit cards, corporate, government and purchasing card services, consumer lines of credit and merchant processing.

Treasury and Corporate Support

Treasury and Corporate Support includes the Company’s investment portfolios, funding, capital management, interest rate risk management, income taxes not allocated to business segments, including most investments in

tax-advantaged

projects, and the residual aggregate of those expenses associated with corporate activities that are managed on a consolidated basis.

Basis of Presentation

Business segment results are derived from the Company’s business unit profitability reporting systems by specifically attributing managed balance sheet assets, deposits and other liabilities and their related income or expense. The allowance for credit losses and related provision expense are allocated to the business segments based on the related loan balances managed. Goodwill and other intangible assets are assigned to the business segments based on the mix of business of an entity acquired by the Company. Within the Company, capital levels are evaluated and managed centrally; however, capital is allocated to the business segments to support evaluation of business performance. Business segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements. Generally, the determination of the amount of capital allocated to each business segment includes credit allocations following a Basel III regulatory framework. Interest income and expense is determined based on the assets and liabilities managed by the business segment. Because funding and asset liability management is a central function, funds transfer-pricing methodologies are utilized to allocate a cost of funds used or credit for funds provided to all business segment assets and liabilities, respectively, using a matched funding concept. Also, each business unit is allocated the taxable-equivalent benefit of

tax-exempt

products. The residual effect on net interest income of asset/liability management activities is included in Treasury and Corporate Support. Noninterest income and expenses directly managed by each business segment, including fees, service charges, salaries and benefits, and other direct revenues and costs are accounted for within each segment’s financial results in a manner similar to the consolidated financial statements. Occupancy costs are allocated based on utilization of facilities by the business segments. Generally, operating losses are charged to the business segment when the loss event is realized in a manner similar to a loan

charge-off.

Noninterest expenses incurred by centrally managed operations or business segments that directly support another business segment’s operations are charged to the applicable business segment based on its utilization of those services, primarily measured by the volume of customer activities, number of employees or other relevant factors. These allocated expenses are reported as net shared services expense within noninterest expense. Certain activities that do not directly support the operations of the business segments or for which the business segments are not considered financially accountable in evaluating their performance are not charged to the business segments. The income or expenses associated with these corporate activities is reported within the Treasury and Corporate Support business segment. Income taxes are assessed to each business segment at a standard tax rate with the residual tax expense or benefit to arrive at the consolidated effective tax rate included in Treasury and Corporate Support.

Designations, assignments and allocations change from time to time as management systems are enhanced, methods of evaluating performance or product lines change or business segments are realigned to better respond to the Company’s diverse customer base. During 2020, certain organization and methodology changes were made and, accordingly, 2019 results were restated and presented on a comparable basis.

Business segment results for the three months ended March 31 were as follows:


	Corporate and Commercial Banking				Consumer and Business Banking				Wealth Management and Investment Services
(Dollars in Millions)	2020		2019		2020		2019		2020		2019
Condensed Income Statement
Net interest income (taxable-equivalent basis)	$	797	$	778	$	1,541	$	1,581	$	283	$	293
Noninterest income		274		208		757		535		464		430
Securities gains (losses), net		–		–		–		–		–		–
Total net revenue		1,071		986		2,298		2,116		747		723
Noninterest expense		429		420		1,344		1,266		444		432
Other intangibles		–		1		4		5		3		3
Total noninterest expense		429		421		1,348		1,271		447		435
Income before provision and income taxes		642		565		950		845		300		288
Provision for credit losses		425		23		123		70		23		(3	)
Income before income taxes		217		542		827		775		277		291
Income taxes and taxable-equivalent adjustment		54		136		207		194		69		73
Net income		163		406		620		581		208		218
Net (income) loss attributable to noncontrolling interests		–		–		–		–		–		–
Net income attributable to U.S. Bancorp	$	163	$	406	$	620	$	581	$	208	$	218
Average Balance Sheet
Loans	$	103,397	$	98,702	$	146,704	$	141,795	$	10,594	$	9,818
Other earning assets		4,555		3,168		4,967		2,389		281		245
Goodwill		1,647		1,647		3,475		3,475		1,617		1,617
Other intangible assets		7		9		2,405		2,882		44		54
Assets		115,404		107,338		161,750		154,720		13,936		13,183

Noninterest-bearing deposits		29,329		30,211		27,986		26,574		13,184		13,275
Interest-bearing deposits		80,704		71,223		133,802		127,303		68,702		54,135
Total deposits		110,033		101,434		161,788		153,877		81,886		67,410

Total U.S. Bancorp shareholders’ equity		15,815		15,346		14,929		14,998		2,465		2,442


	Payment Services						Treasury and Corporate Support						Consolidated Company
(Dollars in Millions)	2020			2019			2020			2019			2020			2019
Condensed Income Statement
Net interest income (taxable-equivalent basis)	$	652		$	617		$	(26	)	$	17		$	3,247		$	3,286
Noninterest income		794	(a)		851	(a)		186			262			2,475	(b)		2,286	(b)
Securities gains (losses), net		–			–			50			5			50			5
Total net revenue		1,446			1,468			210			284			5,772	(c)		5,577	(c)
Noninterest expense		731			722			326			207			3,274			3,047
Other intangibles		35			31			–			–			42			40
Total noninterest expense		766			753			326			207			3,316			3,087
Income before provision and income taxes		680			715			(116	)		77			2,456			2,490
Provision for credit losses		262			286			160			1			993			377
Income before income taxes		418			429			(276	)		76			1,463			2,113
Income taxes and taxable-equivalent adjustment		105			107			(151	)		(105	)		284			405
Net income		313			322			(125	)		181			1,179			1,708
Net (income) loss attributable to noncontrolling interests		–			–			(8	)		(9	)		(8	)		(9	)
Net income attributable to U.S. Bancorp	$	313		$	322		$	(133	)	$	172		$	1,171		$	1,699
Average Balance Sheet
Loans	$	33,688		$	32,414		$	3,274		$	3,381		$	297,657		$	286,110
Other earning assets		399			448			139,863			127,134			150,065			133,384
Goodwill		2,811			2,814			144			–			9,694			9,553
Other intangible assets		535			513			28			–			3,019			3,458
Assets		38,562			38,615			165,155			149,543			494,807			463,399

Noninterest-bearing deposits		1,402			1,157			2,241			2,216			74,142			73,433
Interest-bearing Deposits		114			111			5,340			9,161			288,662			261,933
Total deposits		1,516			1,268			7,581			11,377			362,804			335,366

Total U.S. Bancorp shareholders’ equity		6,081			5,974			11,856			12,829			51,146			51,589

(a)	Presented net of related rewards and rebate costs and certain partner payments of $530 million and $529 million for the three months ended March 31, 2020 and 2019, respectively.

(b)	Includes revenue generated from certain contracts with customers of $1.7 billion for the three months ended March 31, 2020 and 2019 .

(c)

The Company, as a lessor, originates retail and commercial leases either directly to the consumer or indirectly through dealer networks. Under these arrangements, the Company recorded $238 million and $239 million of revenue for the three months ended March 31, 2020 and 2019, respectively, primarily consisting of interest income on sales-type and direct financing leases.