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 according to the volume and credit quality of the loan balances managed, but with the impact of changes in economic forecasts recorded in Treasury and Corporate Support. 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 2021, certain organization and methodology changes were made and, accordingly, 2020 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)	2021			2020			2021			2020			2021			2020
Condensed Income Statement
Net interest income (taxable-equivalent basis)	$	666		$	784		$	1,625		$	1,531		$	204		$	284
Noninterest income		259			271			617			757			492			466
Total net revenue		925			1,055			2,242			2,288			696			750
Noninterest expense		406			443			1,388			1,336			459			449
Other intangibles		–			–			3			4			2			3
Total noninterest expense		406			443			1,391			1,340			461			452
Income (loss) before provision and income taxes		519			612			851			948			235			298
Provision for credit losses		(40	)		424			(44	)		123			7			23
Income (loss) before income taxes		559			188			895			825			228			275
Income taxes and taxable-equivalent adjustment		140			47			224			206			57			69
Net income (loss)		419			141			671			619			171			206
Net (income) loss attributable to noncontrolling interests		–			–			–			–			–			–
Net income (loss) attributable to U.S. Bancorp	$	419		$	141		$	671		$	619		$	171		$	206
Average Balance Sheet
Loans	$	94,872		$	103,368		$	153,177		$	146,718		$	12,443		$	10,608
Other earning assets		4,308			4,555			10,203			4,967			279			281
Goodwill		1,647			1,647			3,475			3,574			1,619			1,617
Other intangible assets		5			7			2,491			2,411			42			44
Assets		107,022			115,308			175,541			161,886			15,662			13,950

Noninterest-bearing deposits		51,020			29,370			39,186			27,866			20,277			13,232
Interest-bearing deposits		67,750			80,657			166,876			133,718			71,629			68,842
Total deposits		118,770			110,027			206,062			161,584			91,906			82,074

Total U.S. Bancorp shareholders’ equity		13,074			14,182			13,453			13,422			2,634			2,571

	Payment Services						Treasury and Corporate Support						Consolidated Company
(Dollars in Millions)	2021			2020			2021			2020			2021			2020
Condensed Income Statement
Net interest income (taxable-equivalent basis)	$	628		$	661		$	(34	)	$	(13	)	$	3,089		$	3,247
Noninterest income		785	(a)		794	(a)		228			237			2,381	(b)		2,525	(b)
Total net revenue		1,413			1,455			194			224			5,470	(c)		5,772	(c)
Noninterest expense		782			754			306			292			3,341			3,274
Other intangibles		33			35			–			–			38			42
Total noninterest expense		815			789			306			292			3,379			3,316
Income (loss) before provision and income taxes		598			666			(112	)		(68	)		2,091			2,456
Provision for credit losses		(41	)		262			(709	)		161			(827	)		993
Income (loss) before income taxes		639			404			597			(229	)		2,918			1,463
Income taxes and taxable-equivalent adjustment		160			101			52			(139	)		633			284
Net income (loss)		479			303			545			(90	)		2,285			1,179
Net (income) loss attributable to noncontrolling interests		–			–			(5	)		(8	)		(5	)		(8	)
Net income (loss) attributable to U.S. Bancorp	$	479		$	303		$	540		$	(98	)	$	2,280		$	1,171
Average Balance Sheet
Loans	$	29,630		$	33,688		$	3,867		$	3,275		$	293,989		$	297,657
Other earning assets		5			6			188,927			140,256			203,722			150,065
Goodwill		3,173			2,856			–			–			9,914			9,694
Other intangible assets		544			557			–			–			3,082			3,019
Assets		35,095			38,285			215,414			165,378			548,734			494,807

Noninterest-bearing deposits		5,264			1,471			2,605			2,203			118,352			74,142
Interest-bearing deposits		132			114			1,625			5,331			308,012			288,662
Total deposits		5,396			1,585			4,230			7,534			426,364			362,804

Total U.S. Bancorp shareholders’ equity		7,480			7,619			16,088			13,352			52,729			51,146

(a)	Presented net of related rewards and rebate costs and certain partner payments of $ 535 million and $ 530 million for the three months ended March 31, 2021 and 2020, respectively.

(b)	Includes revenue generated from certain contracts with customers of $1.7 billion for the three months ended March 31, 2021 and 2020.

(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 $228 million and $238 million of revenue for the three months ended March 31, 2021 and 2020, respectively, primarily consisting of interest income on sales-type and direct financing leases.