10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from (not applicable)

Commission file number 1-6880

U.S. BANCORP

(Exact name of registrant as specified in its charter)

Delaware	41-0255900
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

800 Nicollet Mall

Minneapolis, Minnesota 55402

(Address of principal executive offices, including zip code)

651-466-3000

(Registrant’s telephone number, including area code)

(not applicable)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbols	Name of each exchange on which registered
Common Stock, $.01 par value per share	USB	New York Stock Exchange
Depositary Shares (each representing 1/100th interest in a share of Series A Non-Cumulative Perpetual Preferred Stock, par value $1.00)	USB PrA	New York Stock Exchange
Depositary Shares (each representing 1/1,000th interest in a share of Series B Non-Cumulative Perpetual Preferred Stock, par value $1.00)	USB PrH	New York Stock Exchange
Depositary Shares (each representing 1/1,000th interest in a share of Series F Non-Cumulative Perpetual Preferred Stock, par value $1.00)	USB PrM	New York Stock Exchange
Depositary Shares (each representing 1/1,000th interest in a share of Series K Non-Cumulative Perpetual Preferred Stock, par value $1.00)	USB PrP	New York Stock Exchange
Depositary Shares (each representing 1/1,000th interest in a share of Series L Non-Cumulative Perpetual Preferred Stock, par value $1.00)	USB PrQ	New York Stock Exchange
Depositary Shares (each representing 1/1,000th interest in a share of Series M Non-Cumulative Perpetual Preferred Stock, par value $1.00)	USB PrR	New York Stock Exchange
0.850% Medium-Term Notes, Series X (Senior), due June 7, 2024	USB/24B	New York Stock Exchange

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, and (2) has been subject to such filing requirements for the past 90 days.

YES ☑    NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

YES ☑    NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ☐    NO ☑

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

Class	Outstanding as of October 31, 2021
Common Stock, $0.01 Par Value	1,482,797,679 shares

Table of Contents and Form 10-Q Cross Reference Index

Part I — Financial Information
1) Management’s Discussion and Analysis of Financial Condition and Results of Operations (Item 2)	4
a) Overview	4
b) Statement of Income Analysis	5
c) Balance Sheet Analysis	8
d) Non-GAAP Financial Measures	35
e) Critical Accounting Policies	36
f) Controls and Procedures (Item 4)	36
2) Quantitative and Qualitative Disclosures About Market Risk/Corporate Risk Profile (Item 3)	9
a) Overview	9
b) Credit Risk Management	11
c) Residual Value Risk Management	24
d) Operational Risk Management	24
e) Compliance Risk Management	24
f) Interest Rate Risk Management	24
g) Market Risk Management	26
h) Liquidity Risk Management	27
i) Capital Management	29
3) Line of Business Financial Review	30
4) Financial Statements (Item 1)	37
Part II — Other Information
1) Legal Proceedings (Item 1)	80
2) Risk Factors (Item 1A)	80
3) Unregistered Sales of Equity Securities and Use of Proceeds (Item 2)	80
4) Exhibits (Item 6)	80
5) Signature	81
6) Exhibits	82

U.S. Bancorp 1

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995.

This quarterly report on Form 10-Q contains forward-looking statements about U.S. Bancorp. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements and are based on the information available to, and assumptions and estimates made by, management as of the date hereof. These forward-looking statements cover, among other things, anticipated future revenue and expenses and the future plans and prospects of U.S. Bancorp. Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated. The COVID-19 pandemic is adversely affecting U.S. Bancorp, its customers, counterparties, employees, and third-party service providers, and the ultimate extent of the impacts on its business, financial position, results of operations, liquidity, and prospects is uncertain. Continued deterioration in general business and economic conditions or turbulence in domestic or global financial markets could adversely affect U.S. Bancorp’s revenues and the values of its assets and liabilities, reduce the availability of funding to certain financial institutions, lead to a tightening of credit, and increase stock price volatility. In addition, changes to statutes, regulations, or regulatory policies or practices could affect U.S. Bancorp in substantial and unpredictable ways. U.S. Bancorp’s results could also be adversely affected by changes in interest rates; further increases in unemployment rates; deterioration in the credit quality of its loan portfolios or in the value of the collateral securing those loans; deterioration in the value of its investment securities; legal and regulatory developments; litigation; increased competition from both banks and non-banks; civil unrest; changes in customer behavior and preferences; breaches in data security, including as a result of work-from-home arrangements; failures to safeguard personal information; effects of mergers and acquisitions and related integration; effects of critical accounting policies and judgments; and management’s ability to effectively manage credit risk, market risk, operational risk, compliance risk, strategic risk, interest rate risk, liquidity risk and reputation risk. In addition, U.S. Bancorp’s proposed acquisition of MUFG Union Bank presents risks and uncertainties, including, among others: the risk that the cost savings, any revenue synergies and other anticipated benefits of the proposed acquisition may not be realized or may take longer than anticipated to be realized; the risk that U.S. Bancorp’s business could be disrupted as a result of the announcement and pendency of the proposed acquisition and diversion of management’s attention from ongoing business operations and opportunities; the possibility that the proposed acquisition, including the integration of MUFG Union Bank, may be more costly or difficult to complete than anticipated; delays in closing the proposed acquisition; and the failure of required governmental approvals to be obtained or any other closing conditions in the definitive purchase agreement to be satisfied.

For discussion of these and other risks that may cause actual results to differ from expectations, refer to U.S. Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2020, on file with the Securities and Exchange Commission, including the sections entitled “Corporate Risk Profile” and “Risk Factors” contained in Exhibit 13, and all subsequent filings with the Securities and Exchange Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934. In addition, factors other than these risks also could adversely affect U.S. Bancorp’s results, and the reader should not consider these risks to be a complete set of all potential risks or uncertainties. Forward-looking statements speak only as of the date hereof, and U.S. Bancorp undertakes no obligation to update them in light of new information or future events.

2 U.S. Bancorp

 Table 1    Selected Financial Data

	Three Months Ended September 30									Nine Months Ended September 30
(Dollars and Shares in Millions, Except Per Share Data)	2021			2020			Percent Change			2021			2020			Percent Change
Condensed Income Statement
Net interest income	$	3,171		$	3,227			(1.7	)%	$	9,371		$	9,650			(2.9	)%
Taxable-equivalent adjustment (a)		26			25			4.0			79			73			8.2
Net interest income (taxable-equivalent basis) (b)		3,197			3,252			(1.7	)		9,450			9,723			(2.8	)
Noninterest income		2,693			2,712			(.7	)		7,693			7,851			(2.0	)
Total net revenue		5,890			5,964			(1.2	)		17,143			17,574			(2.5	)
Noninterest expense		3,429			3,371			1.7			10,195			10,005			1.9
Provision for credit losses		(163	)		635			*			(1,160	)		3,365			*
Income before taxes		2,624			1,958			34.0			8,108			4,204			92.9
Income taxes and taxable-equivalent adjustment		590			372			58.6			1,801			744			*
Net income		2,034			1,586			28.2			6,307			3,460			82.3
Net (income) loss attributable to noncontrolling interests		(6	)		(6	)		—			(17	)		(20	)		15.0
Net income attributable to U.S. Bancorp	$	2,028		$	1,580			28.4		$	6,290		$	3,440			82.8
Net income applicable to U.S. Bancorp common shareholders	$	1,934		$	1,494			29.5		$	6,023		$	3,196			88.5
Per Common Share
Earnings per share	$	1.30		$	.99			31.3	%	$	4.04		$	2.12			90.6	%
Diluted earnings per share		1.30			.99			31.3			4.04			2.11			91.5
Dividends declared per share		.46			.42			9.5			1.30			1.26			3.2
Book value per share (c)		32.22			30.93			4.2
Market value per share		59.44			35.85			65.8
Average common shares outstanding		1,483			1,506			(1.5	)		1,491			1,510			(1.3	)
Average diluted common shares outstanding		1,484			1,507			(1.5	)		1,492			1,511			(1.3	)
Financial Ratios
Return on average assets		1.45	%		1.17	%					1.53	%		.87	%
Return on average common equity		15.9			12.8						17.0			9.3
Net interest margin (taxable-equivalent basis) (a)		2.53			2.67						2.52			2.73
Efficiency ratio (b)		58.4			56.6						59.8			57.4
Net charge-offs as a percent of average loans outstanding		.20			.66						.25			.58
Average Balances
Loans	$	296,739		$	311,018			(4.6	)%	$	295,014		$	308,935			(4.5	)%
Loans held for sale		7,438			7,983			(6.8	)		8,422			6,352			32.6
Investment securities (d)		151,755			128,565			18.0			152,653			123,444			23.7
Earning assets		503,325			486,104			3.5			500,616			476,018			5.2
Assets		553,446			536,902			3.1			551,199			525,380			4.9
Noninterest-bearing deposits		129,018			109,375			18.0			124,262			92,935			33.7
Deposits		431,487			405,523			6.4			429,039			390,598			9.8
Short-term borrowings		14,688			18,049			(18.6	)		14,758			21,335			(30.8	)
Long-term debt		35,972			43,542			(17.4	)		37,196			44,587			(16.6	)
Total U.S. Bancorp shareholders’ equity		54,273			52,416			3.5			53,327			51,936			2.7
	September 30, 2021			December 31, 2020
Period End Balances
Loans	$	297,608		$	297,707			—	%
Investment securities		149,376			136,840			9.2
Assets		567,495			553,905			2.5
Deposits		442,902			429,770			3.1
Long-term debt		35,671			41,297			(13.6	)
Total U.S. Bancorp shareholders’ equity		53,743			53,095			1.2
Asset Quality
Nonperforming assets	$	944		$	1,298			(27.3	)%
Allowance for credit losses		6,300			8,010			(21.3	)
Allowance for credit losses as a percentage of period-end loans		2.12	%		2.69	%
Capital Ratios
Common equity tier 1 capital		10.2	%		9.7	%
Tier 1 capital		11.7			11.3
Total risk-based capital		13.4			13.4
Leverage		8.7			8.3
Total leverage exposure		7.0			7.3
Tangible common equity to tangible assets (b)		6.8			6.9
Tangible common equity to risk-weighted assets (b)		9.4			9.5
Common equity tier 1 capital to risk-weighted assets, reflecting the full implementation of the current expected credit losses methodology (b)		9.7			9.3

* Not meaningful

(a) Based on a federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes.

(b) See Non-GAAP Financial Measures beginning on page 35.

(c) Calculated as U.S. Bancorp common shareholders’ equity divided by common shares outstanding at end of the period.

(d) Excludes unrealized gains and losses on available-for-sale investment securities and any premiums or discounts recorded related to the transfer of investment securities at fair value from available-for-sale to held-to-maturity.

U.S. Bancorp 3

Management’s Discussion and Analysis

OVERVIEW

Earnings Summary U.S. Bancorp and its subsidiaries (the “Company”) reported net income attributable to U.S. Bancorp of $2.0 billion for the third quarter of 2021, or $1.30 per diluted common share, compared with $1.6 billion, or $0.99 per diluted common share, for the third quarter of 2020. Return on average assets and return on average common equity were 1.45 percent and 15.9 percent, respectively, for the third quarter of 2021, compared with 1.17 percent and 12.8 percent, respectively, for the third quarter of 2020.

Total net revenue for the third quarter of 2021 was $74 million (1.2 percent) lower than the third quarter of 2020, reflecting a 1.7 percent decrease in net interest income and a 0.7 percent decrease in noninterest income. The decrease in net interest income from the third quarter of 2020 was due to changes in loan portfolio composition and lower average loan balances primarily driven by commercial loan paydowns by corporate customers accessing the capital markets and the Small Business Administration (“SBA”) Paycheck Protection Program, partially offset by changes in deposit and funding mix as well as higher loan fees related to the SBA Paycheck Protection Program. The noninterest income decrease was driven by lower mortgage banking revenue, commercial products revenue and other noninterest income, mostly offset by improvements in payment services revenue, trust and investment management fees, deposit service charges, treasury management fees and investment products fees.

Noninterest expense in the third quarter of 2021 was $58 million (1.7 percent) higher than the third quarter of 2020, reflecting increases in compensation expense, primarily related to performance-based incentive compensation, as well as higher professional services expense, marketing and business development expense, and technology and communications expense, partially offset by lower net occupancy and equipment expense and other noninterest expense.

The provision for credit losses for the third quarter of 2021 was a benefit of $163 million, which was $798 million favorable from the third quarter of 2020, driven by a decrease in the allowance for credit losses during the third quarter of 2021 as a result of continued improvement in the global economy, as well as strong credit and collateral performance, compared with an increase in the allowance for credit losses during the third quarter of 2020. Net charge-offs in the third quarter of 2021 were $147 million, compared with $515 million in the third quarter of 2020. Refer to “Corporate Risk Profile” for further information on the provision for credit losses, net charge-offs, nonperforming assets and other factors considered by the Company in assessing the credit quality of the loan portfolio and establishing the allowance for credit losses.

Net income attributable to U.S. Bancorp for the first nine months of 2021 was $6.3 billion, or $4.04 per diluted common share, compared with $3.4 billion, or $2.11 per diluted common share, for the first nine months of 2020. Return on average assets and return on average common equity were 1.53 percent and 17.0 percent, respectively, for the first nine months of 2021, compared with 0.87 percent and 9.3 percent, respectively, for the first nine months of 2020.

Total net revenue for the first nine months of 2021 was $431 million (2.5 percent) lower than the first nine months of 2020, reflecting a 2.9 percent decrease in net interest income (2.8 percent on a taxable-equivalent basis) and a 2.0 percent decrease in noninterest income. The decrease in net interest income from the first nine months of 2020 was due to changes in loan portfolio composition, lower average loan balances, the impact of lower interest rates compared with the prior year and higher premium amortization in the investment portfolio related to mortgage refinance activities, partially offset by changes in deposit and funding mix as well as higher loan fees related to the SBA Paycheck Protection Program. The noninterest income decrease was driven by lower mortgage banking revenue, commercial products revenue and securities gains, partially offset by improvements in payment services revenue, trust and investment management fees, treasury management fees, investment products fees, deposit service charges and other noninterest income.

Noninterest expense in the first nine months of 2021 was $190 million (1.9 percent) higher than the first nine months of 2020, reflecting increases in compensation expense, technology and communications expense, professional services expense, and marketing and business development expense, partially offset by lower net occupancy and equipment expense and other noninterest expense.

4 U.S. Bancorp

The provision for credit losses for the first nine months of 2021 was a benefit of $1.2 billion, which was $4.5 billion favorable compared to the first nine months of 2020, driven by a decrease in the allowance for credit losses during the first nine months of 2021 as a result of improvement in the global economy and strong credit and collateral performance, compared with an increase in the allowance for credit losses during the first nine months of 2020. Net charge-offs in the first nine months of 2021 were $550 million, compared with $1.3 billion in the first nine months of 2020. Refer to “Corporate Risk Profile” for further information on the provision for credit losses, net charge-offs, nonperforming assets and other factors considered by the Company in assessing the credit quality of the loan portfolio and establishing the allowance for credit losses.

Pending Acquisition In September 2021, the Company announced that it has entered into a definitive agreement to acquire MUFG Union Bank’s core regional banking franchise from Mitsubishi UFJ Financial Group (“MUFG”), for a purchase price of approximately $8.0 billion, including $5.5 billion in cash and approximately 44 million shares of U.S. Bancorp common stock. Upon close of the transaction, MUFG will hold approximately 2.9 percent of the Company’s common stock. The transaction excludes the purchase of MUFG Union Bank’s Global Corporate & Investment Bank, certain middle and back office functions, and other assets. MUFG Union Bank currently has approximately 300 branches in California, Washington and Oregon and is expected to add, based on MUFG Union Bank’s June 30, 2021 balance sheet, approximately $105 billion in total assets, $58 billion of loans and $90 billion of deposits to the Company’s consolidated balance sheet. The transaction is expected to close in the first half of 2022, subject to customary closing conditions, including regulatory approvals.

STATEMENT OF INCOME ANALYSIS

Net Interest Income Net interest income, on a taxable-equivalent basis, was $3.2 billion in the third quarter and $9.5 billion in the first nine months of 2021, representing decreases of $55 million (1.7 percent) and $273 million (2.8 percent), respectively, compared with the same periods of 2020. The decreases were primarily due to changes in loan mix and lower average loan balances driven by commercial loan paydowns by corporate customers accessing the capital markets and the SBA Paycheck Protection Program, partially offset by changes in deposit and funding mix as well as higher loan fees related to the SBA Paycheck Protection Program. Net interest income further decreased in the first nine months of 2021, compared with the first nine months of 2020, due to higher premium amortization related to securities prepayments and the impact of lower interest rates compared with the prior year. Average earning assets were $17.2 billion (3.5 percent) higher in the third quarter and $24.6 billion (5.2 percent) higher in the first nine months of 2021, compared with the same periods of 2020, reflecting increases in investment securities and other earning assets, primarily driven by higher cash balances, while average loans decreased due to continued paydowns by corporate customers. The net interest margin, on a taxable-equivalent basis, in the third quarter and first nine months of 2021 was 2.53 percent and 2.52 percent, respectively, compared with 2.67 percent and 2.73 percent in the third quarter and first nine months of 2020, respectively. The decrease in net interest margin from the prior year was primarily due to the impact of declining interest rates on loan yields, the mix of earning assets and lower reinvestment yields in the investment portfolio, partially offset by the net benefit of funding composition and higher loan fees. The decrease in net interest margin in the first nine months of 2021, compared with the first nine months of 2020, was further due to higher premium amortization within the investment portfolio. Refer to the “Consolidated Daily Average Balance Sheet and Related Yields and Rates” tables for further information on net interest income.

Average total loans in the third quarter and first nine months of 2021 were $14.3 billion (4.6 percent) and $13.9 billion (4.5 percent) lower, respectively, than the same periods of 2020. The decreases were primarily due to lower commercial loans driven by continued paydowns by corporate customers that accessed the capital markets and the SBA Paycheck Protection Program, lower commercial real estate loans as a result of customer paydowns, and lower credit card loans driven by higher customer payment rates. Average total loans further decreased in the third quarter of 2021, compared with the third quarter of 2020, due to lower residential mortgages driven by paydowns. These decreases were partially offset by higher other retail loans, driven by growth in installment loans due to strong auto and recreational vehicle lending, partially offset by lower home equity and second mortgages as more customers chose to refinance their existing first lien residential mortgage balances during the prior year due to the low interest rate environment.

Average investment securities in the third quarter and first nine months of 2021 were $23.2 billion (18.0 percent) and $29.2 billion (23.7 percent) higher, respectively, than the same periods of 2020, primarily due to purchases of mortgage-backed, U.S. Treasury and state and political securities, net of prepayments and maturities.

U.S. Bancorp 5

 Table 2    Noninterest Income

	Three Months Ended September 30							Nine Months Ended September 30
(Dollars in Millions)	2021		2020		Percent Change			2021		2020		Percent Change
Credit and debit card revenue	$	393	$	388		1.3	%	$	1,125	$	976		15.3	%
Corporate payment products revenue		156		125		24.8			420		371		13.2
Merchant processing services		392		347		13.0			1,084		950		14.1
Trust and investment management fees		459		434		5.8			1,349		1,295		4.2
Deposit service charges		194		170		14.1			531		512		3.7
Treasury management fees		155		145		6.9			462		425		8.7
Commercial products revenue		277		303		(8.6	)		837		904		(7.4	)
Mortgage banking revenue		418		553		(24.4	)		1,063		1,596		(33.4	)
Investment products fees		62		48		29.2			177		142		24.6
Securities gains (losses), net		20		12		66.7			88		143		(38.5	)
Other		167		187		(10.7	)		557		537		3.7
Total noninterest income	$	2,693	$	2,712		(.7	)%	$	7,693	$	7,851		(2.0	)%

Average total deposits for the third quarter and first nine months of 2021 were $26.0 billion (6.4 percent) and $38.4 billion (9.8 percent) higher, respectively, than the same periods of 2020, including the acquisition of deposit balances from State Farm Bank in the fourth quarter of 2020. Average noninterest-bearing deposits for the third quarter and first nine months of 2021 were $19.6 billion (18.0 percent) and $31.3 billion (33.7 percent) higher, respectively, than the same periods of 2020, primarily due to higher Corporate and Commercial Banking, and Wealth Management and Investment Services balances. The increase in noninterest-bearing deposits in the third quarter of 2021, compared with the third quarter of 2020, was partially offset by a decrease in Payment Services balances. Average total savings deposits for the third quarter and first nine months of 2021 were $16.9 billion (6.4 percent) and $21.6 billion (8.4 percent) higher, respectively, than the same periods of the prior year, driven by increases in Consumer and Business Banking balances, partially offset by decreases in Corporate and Commercial Banking balances. The growth in average noninterest-bearing and total savings deposits was primarily a result of the actions by the federal government to increase liquidity in the financial system and government stimulus programs. Average time deposits for the third quarter and first nine months of 2021 were $10.5 billion (31.0 percent) and $14.5 billion (36.7 percent) lower, respectively, than the same periods of 2020, primarily driven by decreases in those deposits managed as an alternative to other funding sources, based largely on relative pricing and liquidity characteristics.

Provision for Credit Losses The provision for credit losses was a benefit of $163 million for the third quarter and $1.2 billion for the first nine months of 2021, representing decreases of $798 million and $4.5 billion, respectively, from the same periods of 2020. The decreases were driven by the Company decreasing the allowance for credit losses in 2021 as a result of improvement in the global economy, as well as strong credit and collateral performance, compared with the Company increasing the allowance for credit losses in 2020 due to deteriorating economic conditions related to COVID-19. Net charge-offs decreased $368 million (71.5 percent) and $795 million (59.1 percent) in the third quarter and first nine months of 2021, respectively, compared with the same periods of the prior year, reflecting improvement across all loan categories. Refer to “Corporate Risk Profile” for further information on the provision for credit losses, net charge-offs, nonperforming assets and other factors considered by the Company in assessing the credit quality of the loan portfolio and establishing the allowance for credit losses.

Noninterest Income Noninterest income was $2.7 billion in the third quarter and $7.7 billion in the first nine months of 2021, representing decreases of $19 million (0.7 percent) and $158 million (2.0 percent), respectively, compared with the same periods of 2020. The decreases from a year ago reflected lower mortgage banking revenue and commercial products revenue, partially offset by higher payment services revenue, trust and investment management fees, deposit service charges, treasury management fees and investment products fees. The decrease in noninterest income in the first nine months of 2021, compared with the first nine months of 2020, was also due to lower securities gains. Mortgage banking revenue decreased in the third quarter of 2021, compared with the third quarter of 2020, driven by lower production volume and related gain on sale margins, partially offset by increases in mortgage servicing rights (“MSRs”) valuations, net of hedging activities, as well as gains on higher Government National Mortgage Association (“GNMA”) loan sales. The decrease in mortgage banking revenue in the first nine months of 2021, compared with the first nine months of 2020, was due to lower production volume and related gain on sale margins, along with declines in MSR valuations, net of hedging activities. Commercial

6 U.S. Bancorp

 Table 3    Noninterest Expense

	Three Months Ended September 30									Nine Months Ended September 30
(Dollars in Millions)	2021			2020			Percent Change			2021			2020			Percent Change
Compensation	$	1,847		$	1,687			9.5	%	$	5,448		$	4,992			9.1	%
Employee benefits		336			335			.3			1,057			1,001			5.6
Net occupancy and equipment		259			276			(6.2	)		780			823			(5.2	)
Professional services		126			102			23.5			332			307			8.1
Marketing and business development		99			72			37.5			237			213			11.3
Technology and communications		361			334			8.1			1,082			932			16.1
Postage, printing and supplies		69			70			(1.4	)		203			214			(5.1	)
Other intangibles		41			44			(6.8	)		119			129			(7.8	)
Other		291			451			(35.5	)		937			1,394			(32.8	)
Total noninterest expense	$	3,429		$	3,371			1.7	%	$	10,195		$	10,005			1.9	%
Efficiency ratio (a)		58.4	%		56.6	%					59.8	%		57.4	%

a) See Non-GAAP Financial Measures beginning on page 35.

products revenue decreased in the third quarter and first nine months of 2021, compared with the same periods of the prior year, primarily due to lower capital markets activity and trading revenue, partially offset by higher syndication revenue and fees. The decrease in commercial products revenue in the first nine months of 2021, compared with the first nine months of 2020, was further offset by higher non-yield loan fees as a result of higher unused commitments. Other noninterest income decreased in the third quarter of 2021, compared with the third quarter of 2020, primarily due to the third quarter of 2020 impact of higher equity investment income and transition services agreement revenue associated with the sale of the Company’s ATM third-party servicing business, partially offset by certain asset impairments as a result of branch optimization, and higher retail leasing end of term residual gains in the third quarter of 2021. During 2020, payment services revenue had been adversely affected by the impact of the COVID-19 pandemic on consumer and business spending, particularly related to travel and entertainment activities. However, spending has continued to strengthen across most sectors driven by government stimulus, local jurisdictions reducing restrictions and consumer behaviors normalizing. As a result, payment services revenue increased in the third quarter and first nine months of 2021, compared with the same periods of 2020. The components of payment services revenue included higher credit and debit card revenue driven by higher net interchange revenue related to sales volume as well as stronger transaction and cash advance fees, partially offset by lower prepaid card processing activities as government stimulus programs dissipated, as well as higher investment in customer acquisition. Corporate payment products revenue increased primarily due to improving business spending, while merchant processing services revenue increased driven by higher sales volume as well as higher merchant and equipment fees. Trust and investment management fees increased primarily due to business growth and favorable market conditions, while deposit service charges increased primarily due to higher customer activity and ATM processing revenue. Treasury management fees increased due to core growth driven by the COVID-19 economic recovery, while investment products fees increased primarily driven by favorable market conditions and core growth.

Noninterest Expense Noninterest expense was $3.4 billion in the third quarter and $10.2 billion in the first nine months of 2021, representing increases of $58 million (1.7 percent) and $190 million (1.9 percent), respectively, over the same periods of 2020. The increases from the prior year reflected higher compensation expense, professional services expense, marketing and business development expense, and technology and communications expense, partially offset by lower net occupancy and equipment expense, and other noninterest expense. Compensation expense increased due to higher performance-based incentives, merit increases and revenue-related compensation driven by business production. Professional services expense increased primarily due to an increase in business investment and related initiatives in the third quarter of 2021. Marketing and business development expense increased due to the timing of marketing campaigns supporting business development and lower marketing activities in 2020 during the pandemic. Technology and communications expense increased primarily due to higher expenditures supporting business technology investments. Employee benefits expense increased in the first nine months of 2021, compared with the first nine months of 2020, primarily due to higher payroll taxes and related benefits, and higher pension expense. Net occupancy and equipment expense decreased in the third quarter and first nine months of 2021, compared with the same periods of the prior year, primarily due to

U.S. Bancorp 7

branch closures. Other noninterest expense decreased primarily due to higher COVID-19 related expenses in 2020 including recognizing liabilities related to future delivery exposures for merchant and airline processing, as well as lower costs related to tax-advantaged projects which were scaled back in 2020 during the pandemic.

Income Tax Expense The provision for income taxes was $564 million (an effective rate of 21.7 percent) for the third quarter and $1.7 billion (an effective rate of 21.4 percent) for the first nine months of 2021, compared with $347 million (an effective rate of 18.0 percent) and $671 million (an effective rate of 16.2 percent) for the same periods of 2020, respectively. The increases in the tax rates were due to the marginal impact of providing taxes on higher pretax earnings in 2021. For further information on income taxes, refer to Note 12 of the Notes to Consolidated Financial Statements.

BALANCE SHEET ANALYSIS

Loans The Company’s loan portfolio was $297.6 billion at September 30, 2021, compared with $297.7 billion at December 31, 2020, a decrease of $99 million. The decrease was driven by lower commercial loans, residential mortgages, commercial real estate loans and credit card loans, partially offset by higher other retail loans.

Commercial loans decreased $1.9 billion (1.8 percent) at September 30, 2021, compared with December 31, 2020, reflecting paydowns by corporate customers that accessed the capital markets and the SBA Paycheck Protection Program during the first nine months of 2021.

Residential mortgages held in the loan portfolio decreased $1.2 billion (1.6 percent) at September 30, 2021, compared with December 31, 2020, due to customers paying down balances in the first nine months of 2021. Residential mortgages originated and placed in the Company’s loan portfolio include well-secured jumbo mortgages and branch-originated first lien home equity loans to borrowers with high credit quality.

Commercial real estate loans decreased $503 million (1.3 percent) at September 30, 2021, compared with December 31, 2020, the result of customers paying down balances.

Credit card loans decreased $209 million (0.9 percent) at September 30, 2021, compared with December 31, 2020, reflecting higher customer payment rates.

Other retail loans increased $3.7 billion (6.4 percent) at September 30, 2021, compared with December 31, 2020, due to increases in auto loans and installment loans, partially offset by decreases in home equity loans and retail leasing balances.

The Company generally retains portfolio loans through maturity; however, the Company’s intent may change over time based upon various factors such as ongoing asset/liability management activities, assessment of product profitability, credit risk, liquidity needs, and capital implications. If the Company’s intent or ability to hold an existing portfolio loan changes, it is transferred to loans held for sale.

Loans Held for Sale Loans held for sale, consisting primarily of residential mortgages to be sold in the secondary market, were $6.2 billion at September 30, 2021, compared with $8.8 billion at December 31, 2020. The decrease in loans held for sale was principally due to a lower level of mortgage loan closings in the third quarter of 2021, compared with the fourth quarter of 2020. Almost all of the residential mortgage loans the Company originates or purchases for sale follow guidelines that allow the loans to be sold into existing, highly liquid secondary markets; in particular in government agency transactions and to government-sponsored enterprises (“GSEs”).

Investment Securities Available-for-sale investment securities totaled $149.4 billion at September 30, 2021, compared with $136.8 billion at December 31, 2020. The $12.5 billion (9.2 percent) increase was primarily due to $15.7 billion of net investment purchases, partially offset by a $3.1 billion unfavorable change in net unrealized gains (losses) on available-for-sale investment securities. The Company had no outstanding investment securities classified as held-to-maturity at September 30, 2021 and December 31, 2020.

The Company’s available-for-sale investment securities are carried at fair value with changes in fair value reflected in other comprehensive income (loss) unless a portion of a security’s unrealized loss is related to credit and an allowance for credit losses is necessary. At September 30, 2021, the Company’s net unrealized gains on available-for-sale investment securities were $138 million, compared with $3.2 billion at December 31, 2020. The unfavorable change in net unrealized gains (losses) was primarily due to decreases in the fair value of mortgage-backed and U.S. Treasury securities as a result of changes in interest rates. Gross unrealized losses on available-for-sale investment securities totaled $1.7 billion at September 30, 2021, compared with $53 million at December 31, 2020. At September 30, 2021, the Company had no plans to sell securities with unrealized losses, and believes it is more likely than not that it would not be required to sell such securities before recovery of their amortized cost.

Refer to Notes 4 and 15 in the Notes to Consolidated Financial Statements for further information on investment securities.

8 U.S. Bancorp

 Table 4    Available-for-Sale Investment Securities

	September 30, 2021									December 31, 2020
(Dollars in Millions)	Amortized Cost		Fair Value		Weighted- Average Maturity in Years		Weighted- Average Yield (d)			Amortized Cost		Fair Value		Weighted- Average Maturity in Years		Weighted- Average Yield (d)
U.S. Treasury and agencies	$	18,460	$	18,491		5.1		1.57	%	$	21,954	$	22,391		3.8		1.37	%
Mortgage-backed securities (a)		120,887		120,482		5.1		1.55			103,282		105,374		3.0		1.47
Asset-backed securities (a)		64		69		3.8		1.51			200		205		6.2		1.47
Obligations of state and political subdivisions (b) (c)		9,820		10,327		7.4		3.71			8,166		8,861		6.3		3.99
Other		7		7		3.7		2.07			9		9		.1		1.81
Total investment securities	$	149,238	$	149,376		5.3		1.69	%	$	133,611	$	136,840		3.4		1.61	%

(a) Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities that take into account anticipated future prepayments.

(b) Information related to obligations of state and political subdivisions is presented based upon yield to first optional call date if the security is purchased at a premium, and yield to maturity if the security is purchased at par or a discount.

(c) Maturity calculations for obligations of state and political subdivisions are based on the first optional call date for securities with a fair value above par and the contractual maturity date for securities with a fair value equal to or below par.

(d) Yields on investment securities are computed based on amortized cost balances. Weighted-average yields for obligations of state and political subdivisions are presented on a fully-taxable equivalent basis based on a federal income tax rate of 21 percent.

Deposits Total deposits were $442.9 billion at September 30, 2021, compared with $429.8 billion at December 31, 2020. The $13.1 billion (3.1 percent) increase in total deposits reflected increases in noninterest-bearing and total savings deposits, partially offset by a decrease in time deposits. Noninterest-bearing deposits increased $17.5 billion (14.8 percent) at September 30, 2021, compared with December 31, 2020, primarily due to higher Corporate and Commercial Banking, Wealth Management and Investment Services, and Consumer and Business Banking balances. Interest checking balances increased $7.8 billion (8.2 percent) while savings account balances increased $7.0 billion (12.4 percent), both driven by higher Consumer and Business Banking balances. Money market deposit balances decreased $11.4 billion (8.9 percent) at September 30, 2021, compared with December 31, 2020, primarily due to lower Wealth Management and Investment Services, and Corporate and Commercial Banking balances. Time deposits decreased $7.8 billion (25.5 percent) at September 30, 2021, compared with December 31, 2020, driven by a decrease in those deposits managed as an alternative to other funding sources, based largely on relative pricing and liquidity characteristics, along with a decrease in Consumer and Business Banking balances.

Borrowings The Company utilizes both short-term and long-term borrowings as part of its asset/liability management and funding strategies. Short-term borrowings, which include federal funds purchased, commercial paper, repurchase agreements, borrowings secured by high-grade assets and other short-term borrowings, were $16.1 billion at September 30, 2021, compared with $11.8 billion at December 31, 2020. The $4.3 billion (36.7 percent) increase in short-term borrowings was primarily due to higher commercial paper, repurchase agreement and federal funds purchased balances. Long-term debt was $35.7 billion at September 30, 2021, compared with $41.3 billion at December 31, 2020. The $5.6 billion (13.6 percent) decrease was primarily due to $3.7 billion of bank note repayments and maturities, $1.5 billion of medium-term note repayments and a $1.0 billion decrease in Federal Home Loan Bank (“FHLB”) advances, partially offset by $1.0 billion of bank note issuances. Refer to the “Liquidity Risk Management” section for discussion of liquidity management of the Company.

CORPORATE RISK PROFILE

Overview Managing risks is an essential part of successfully operating a financial services company. The Company’s Board of Directors has approved a risk management framework which establishes governance and risk management requirements for all risk-taking activities. This framework includes Company and business line risk appetite statements which set boundaries for the types and amount of risk that may be undertaken in pursuing business objectives and initiatives. The Board of Directors, primarily through its Risk Management Committee, oversees performance relative to the risk management framework, risk appetite statements, and other policy requirements.

The Executive Risk Committee (“ERC”), which is chaired by the Chief Risk Officer and includes the Chief Executive Officer and other members of the executive management team, oversees execution against the risk management framework and risk appetite statements. The ERC focuses on current and emerging risks, including strategic and reputation risks, by directing timely and comprehensive actions. Senior operating committees have also been established, each responsible for overseeing a specified category of risk.

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The Company’s most prominent risk exposures are credit, interest rate, market, liquidity, operational, compliance, strategic, and reputation. Leveraging the Company’s risk management framework, the specific impacts of COVID-19 and related risks are identified for each of the most prominent exposures. With respect to direct impacts from COVID-19, oversight and governance is managed through a centralized command center with frequent reporting to the Managing Committee and ERC. The Board of Directors also oversees the Company’s responsiveness to the COVID-19 pandemic. Credit risk is the risk of loss associated with a change in the credit profile or the failure of a borrower or counterparty to meet its contractual obligations. Interest rate risk is the current or prospective risk to earnings and capital, or market valuations, arising from the impact of changes in interest rates. Market risk arises from fluctuations in interest rates, foreign exchange rates, and security prices that may result in changes in the values of financial instruments, such as trading and available-for-sale securities, mortgage loans held for sale (“MLHFS”), MSRs and derivatives that are accounted for on a fair value basis. Liquidity risk is the risk that financial condition or overall safety and soundness is adversely affected by the Company’s inability, or perceived inability, to meet its cash flow obligations in a timely and complete manner in either normal or stressed conditions. Operational risk is the risk to current or projected financial condition and resilience arising from inadequate or failed internal processes or systems, people (including human errors or misconduct), or adverse external events, including the risk of loss resulting from breaches in data security. Operational risk can also include the risk of loss due to failures by third parties with which the Company does business. Compliance risk is the risk that the Company may suffer legal or regulatory sanctions, financial losses, and reputational damage if it fails to adhere to compliance requirements and the Company’s compliance policies. Strategic risk is the risk to current or projected financial condition and resilience arising from adverse business decisions, poor implementation of business decisions, or lack of responsiveness to changes in the banking industry and operating environment. Reputation risk is the risk to current or anticipated earnings, capital, or franchise or enterprise value arising from negative public opinion. This risk may impair the Company’s competitiveness by affecting its ability to establish new relationships or services, or continue serving existing relationships. In addition to the risks identified above, other risk factors exist that may impact the Company. Refer to “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, for a detailed discussion of these factors.

The Company’s Board and management-level governance committees are supported by a “three lines of defense” model for establishing effective checks and balances. The first line of defense, the business lines, manages risks in conformity with established limits and policy requirements. In turn, business line leaders and their risk officers establish programs to ensure conformity with these limits and policy requirements. The second line of defense, which includes the Chief Risk Officer’s organization as well as policy and oversight activities of corporate support functions, translates risk appetite and strategy into actionable risk limits and policies. The second line of defense monitors first line of defense conformity with limits and policies, and provides reporting and escalation of emerging risks and other concerns to senior management and the Risk Management Committee of the Board of Directors. The third line of defense, internal audit, is responsible for providing the Audit Committee of the Board of Directors and senior management with independent assessment and assurance regarding the effectiveness of the Company’s governance, risk management and control processes.

Management regularly provides reports to the Risk Management Committee of the Board of Directors. The Risk Management Committee discusses with management the Company’s risk management performance, and provides a summary of key risks to the entire Board of Directors, covering the status of existing matters, areas of potential future concern and specific information on certain types of loss events. The Risk Management Committee considers quarterly reports by management assessing the Company’s performance relative to the risk appetite statements and the associated risk limits, including:

• Macroeconomic environment and other qualitative considerations, such as regulatory and compliance changes, litigation developments, and technology and cybersecurity;

• Credit measures, including adversely rated and nonperforming loans, leveraged transactions, credit concentrations and lending limits;

• Interest rate and market risk, including market value and net income simulation, and trading-related Value at Risk (“VaR”);

• Liquidity risk, including funding projections under various stressed scenarios;

• Operational and compliance risk, including losses stemming from events such as fraud, processing errors, control breaches, breaches in data security or adverse business decisions, as well as reporting on technology performance, and various legal and regulatory compliance measures;

• Capital ratios and projections, including regulatory measures and stressed scenarios; and

10 U.S. Bancorp

• Strategic and reputation risk considerations, impacts and responses.

Credit Risk Management The Company’s strategy for credit risk management includes well-defined, centralized credit policies, uniform underwriting criteria, and ongoing risk monitoring and review processes for all commercial and consumer credit exposures. In evaluating its credit risk, the Company considers changes, if any, in underwriting activities, the loan portfolio composition (including product mix and geographic, industry or customer-specific concentrations), collateral values, trends in loan performance and macroeconomic factors, such as changes in unemployment rates, gross domestic product levels and consumer bankruptcy filings, as well as the potential impact on customers and the domestic economy resulting from the COVID-19 pandemic. The Risk Management Committee oversees the Company’s credit risk management process.

In addition, credit quality ratings as defined by the Company, are an important part of the Company’s overall credit risk management and evaluation of its allowance for credit losses. Loans with a pass rating represent those loans not classified on the Company’s rating scale for problem credits, as minimal credit risk has been identified. Loans with a special mention or classified rating, including consumer lending and small business loans that are 90 days or more past due and still accruing, nonaccrual loans, those loans considered troubled debt restructurings (“TDRs”), and loans in a junior lien position that are current but are behind a first lien position on nonaccrual, encompass all loans held by the Company that it considers to have a potential or well-defined weakness that may put full collection of contractual cash flows at risk. The Company’s internal credit quality ratings for consumer loans are primarily based on delinquency and nonperforming status, except for a limited population of larger loans within those portfolios that are individually evaluated. For this limited population, the determination of the internal credit quality rating may also consider collateral value and customer cash flows. Refer to Note 5 in the Notes to Consolidated Financial Statements for further discussion of the Company’s loan portfolios including internal credit quality ratings. In addition, refer to “Management’s Discussion and Analysis — Credit Risk Management” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, for a more detailed discussion on credit risk management processes.

The Company manages its credit risk, in part, through diversification of its loan portfolio which is achieved through limit setting by product type criteria, such as industry, and identification of credit concentrations. As part of its normal business activities, the Company offers a broad array of lending products. The Company categorizes its loan portfolio into two segments, which is the level at which it develops and documents a systematic methodology to determine the allowance for credit losses. The Company’s two loan portfolio segments are commercial lending and consumer lending.

The commercial lending segment includes loans and leases made to small business, middle market, large corporate, commercial real estate, financial institution, non-profit and public sector customers. Key risk characteristics relevant to commercial lending segment loans include the industry and geography of the borrower’s business, purpose of the loan, repayment source, borrower’s debt capacity and financial flexibility, loan covenants, and nature of pledged collateral, if any, as well as macroeconomic factors such as unemployment rates, gross domestic product levels, corporate bond spreads and long-term interest rates, all of which have been impacted by the COVID-19 pandemic. These risk characteristics, among others, are considered in determining estimates about the likelihood of default by the borrowers and the severity of loss in the event of default. The Company considers these risk characteristics in assigning internal risk ratings to, or forecasting losses on, these loans, which are the significant factors in determining the allowance for credit losses for loans in the commercial lending segment.

The consumer lending segment represents loans and leases made to consumer customers, including residential mortgages, credit card loans, and other retail loans such as revolving consumer lines, auto loans and leases, home equity loans and lines, and student loans, a run-off portfolio. Home equity or second mortgage loans are junior lien closed-end accounts fully disbursed at origination. These loans typically are fixed rate loans, secured by residential real estate, with a 10- or 15-year fixed payment amortization schedule. Home equity lines are revolving accounts giving the borrower the ability to draw and repay balances repeatedly, up to a maximum commitment, and are secured by residential real estate. These include accounts in either a first or junior lien position. Typical terms on home equity lines in the portfolio are variable rates benchmarked to the prime rate, with a 10- or 15-year draw period during which a minimum payment is equivalent to the monthly interest, followed by a 20- or 10-year amortization period, respectively. At September 30, 2021, substantially all of the Company’s home equity lines were in the draw period. Approximately $1.2 billion, or 12 percent, of the outstanding home equity line balances at September 30, 2021, will enter the amortization period within the next 36 months. Key risk characteristics relevant to consumer

U.S. Bancorp 11

lending segment loans primarily relate to the borrowers’ capacity and willingness to repay and include unemployment rates, consumer bankruptcy filings and other macroeconomic factors, customer payment history and credit scores, and in some cases, updated loan-to-value (“LTV”) information reflecting current market conditions on real estate-based loans. These and other risk characteristics, including risk resulting from the COVID-19 pandemic, are reflected in forecasts of delinquency levels, bankruptcies and losses which are the primary factors in determining the allowance for credit losses for the consumer lending segment.

The Company further disaggregates its loan portfolio segments into various classes based on their underlying risk characteristics. The two classes within the commercial lending segment are commercial loans and commercial real estate loans. The three classes within the consumer lending segment are residential mortgages, credit card loans and other retail loans.

The Company’s consumer lending segment utilizes several distinct business processes and channels to originate consumer credit, including traditional branch lending, mobile and on-line banking, indirect lending, alliance partnerships, correspondent banks and loan brokers. Each distinct underwriting and origination activity manages unique credit risk characteristics and prices its loan production commensurate with the differing risk profiles.

Residential mortgage originations are generally limited to prime borrowers and are performed through the Company’s branches, loan production offices, mobile and on-line services and a wholesale network of originators. The Company may retain residential mortgage loans it originates on its balance sheet or sell the loans into the secondary market while retaining the servicing rights and customer relationships. Utilizing the secondary markets enables the Company to effectively reduce its credit and other asset/liability risks. For residential mortgages that are retained in the Company’s portfolio and for home equity and second mortgages, credit risk is also diversified by geography and managed by adherence to LTV and borrower credit criteria during the underwriting process.

The Company estimates updated LTV information on its outstanding residential mortgages quarterly, based on a method that combines automated valuation model updates and relevant home price indices. LTV is the ratio of the loan’s outstanding principal balance to the current estimate of property value. For home equity and second mortgages, combined loan-to-value (“CLTV”) is the combination of the first mortgage original principal balance and the second lien outstanding principal balance, relative to the current estimate of property value. Certain loans do not have an LTV or CLTV, primarily due to lack of availability of relevant automated valuation model and/or home price indices values, or lack of necessary valuation data on acquired loans.

The following tables provide summary information of residential mortgages and home equity and second mortgages by LTV at September 30, 2021:

Residential Mortgages (Dollars in Millions)	Interest Only		Amortizing		Total		Percent of Total
Loan-to-Value
Less than or equal to 80%	$	3,243	$	60,169	$	63,412		84.6	%
Over 80% through 90%		4		1,706		1,710		2.3
Over 90% through 100%		—		179		179		.2
Over 100%		—		79		79		.1
No LTV available		—		32		32		—
Loans purchased from GNMA mortgage pools (a)		—		9,542		9,542		12.8
Total (b)	$	3,247	$	71,707	$	74,954		100.0	%

(a) Represents loans purchased from Government National Mortgage Association (“GNMA”) mortgage pools whose payments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs.

(b) At September 30, 2021, approximately $443 million of residential mortgage balances were considered sub-prime.

Home Equity and Second Mortgages (Dollars in Millions)	Lines		Loans		Total		Percent of Total
Loan-to-Value
Less than or equal to 80%	$	9,379	$	636	$	10,015		93.4	%
Over 80% through 90%		266		244		510		4.8
Over 90% through 100%		48		26		74		.7
Over 100%		48		5		53		.5
No LTV/CLTV available		63		3		66		.6
Total (a)	$	9,804	$	914	$	10,718		100.0	%

(a) At September 30, 2021, approximately $37 million of home equity and second mortgage balances were considered sub-prime.

Home equity and second mortgages were $10.7 billion at September 30, 2021, compared with $12.5 billion at December 31, 2020, and included $3.1 billion of home equity lines in a first lien position and $7.6 billion of home equity and second mortgage loans and lines in a junior lien position. Loans and lines in a junior lien position at September 30, 2021, included approximately $2.8 billion of loans and lines for which the Company also serviced the related first lien loan, and approximately $4.8 billion where the Company did not service the related first lien loan. The Company was able to determine the status of the related first liens using information the Company has as the servicer of the first lien or information reported on customer credit bureau files. The Company also evaluates other indicators of credit risk for these junior lien loans and lines including delinquency, estimated average CLTV ratios and updated weighted-average credit scores in making its assessment of credit risk, related loss estimates and determining the allowance for credit losses.

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The following table provides a summary of delinquency statistics and other credit quality indicators for the Company’s junior lien positions at September 30, 2021:

	Junior Liens Behind
(Dollars in Millions)	Company Owned or Serviced First Lien			Third Party First Lien			Total
Total	$	2,750		$	4,837		$	7,587
Percent 30—89 days past due		.49	%		.38	%		.42	%
Percent 90 days or more past due		.06	%		.06	%		.06	%
Weighted-average CLTV		59	%		56	%		57	%
Weighted-average credit score		782			781			781

See the “Analysis and Determination of the Allowance for Credit Losses” section for additional information on how the Company determines the allowance for credit losses for loans in a junior lien position.

Loan Delinquencies Trends in delinquency ratios are an indicator, among other considerations, of credit risk within the Company’s loan portfolios. The Company measures delinquencies, both including and excluding nonperforming loans, to enable comparability with other companies. Accruing loans 90 days or more past due totaled $385 million at September 30, 2021, compared with $477 million at December 31, 2020. These balances exclude loans purchased from GNMA mortgage pools whose repayments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. Accruing loans 90 days or more past due are not included in nonperforming assets and continue to accrue interest because they are adequately secured by collateral, are in the process of collection and are reasonably expected to result in repayment or restoration to current status, or are managed in homogeneous portfolios with specified charge-off timeframes adhering to regulatory guidelines. The ratio of accruing loans 90 days or more past due to total loans was 0.13 percent at September 30, 2021 compared with 0.16 percent at December 31, 2020.

 Table 5    Delinquent Loan Ratios as a Percent of Ending Loan Balances

90 days or more past due excluding nonperforming loans	September 30, 2021			December 31, 2020
Commercial
Commercial		.04	%		.06	%
Lease financing		—			—
Total commercial		.04			.05
Commercial Real Estate
Commercial mortgages		.01			—
Construction and development		.16			.02
Total commercial real estate		.05			.01
Residential Mortgages (a)		.15			.18
Credit Card		.66			.88
Other Retail
Retail leasing		.03			.05
Home equity and second mortgages		.37			.36
Other		.05			.10
Total other retail		.11			.15
Total loans		.13	%		.16	%
90 days or more past due including nonperforming loans	September 30, 2021			December 31, 2020
Commercial		.25	%		.42	%
Commercial real estate		.82			1.15
Residential mortgages (a)		.47			.50
Credit card		.66			.88
Other retail		.36			.42
Total loans		.43	%		.57	%

(a) Delinquent loan ratios exclude $1.5 billion at September 30, 2021, and $1.8 billion at December 31, 2020, of loans purchased from GNMA mortgage pools whose repayments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. Including these loans, the ratio of residential mortgages 90 days or more past due including all nonperforming loans was 2.50 percent at September 30, 2021, and 2.87 percent at December 31, 2020.

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The following table provides summary delinquency information for residential mortgages, credit card and other retail loans included in the consumer lending segment:

	Amount				As a Percent of Ending Loan Balances
(Dollars in Millions)	September 30, 2021		December 31, 2020		September 30, 2021			December 31, 2020
Residential Mortgages (a)
30-89 days	$	153	$	244		.20	%		.32	%
90 days or more		114		137		.15			.18
Nonperforming		237		245		.32			.32
Total	$	504	$	626		.67	%		.82	%
Credit Card
30-89 days	$	183	$	231		.83	%		1.04	%
90 days or more		147		197		.66			.88
Nonperforming		—		—		—			—
Total	$	330	$	428		1.49	%		1.92	%
Other Retail
Retail Leasing
30-89 days	$	26	$	35		.34	%		.43	%
90 days or more		2		4		.03			.05
Nonperforming		11		13		.15			.16
Total	$	39	$	52		.52	%		.64	%
Home Equity and Second Mortgages
30-89 days	$	46	$	68		.43	%		.54	%
90 days or more		40		45		.37			.36
Nonperforming		120		107		1.12			.86
Total	$	206	$	220		1.92	%		1.76	%
Other (b)
30-89 days	$	179	$	215		.42	%		.60	%
90 days or more		22		37		.05			.10
Nonperforming		26		34		.06			.09
Total	$	227	$	286		.53	%		.79	%

(a) Excludes $946 million of loans 30-89 days past due and $1.5 billion of loans 90 days or more past due at September 30, 2021, purchased from GNMA mortgage pools that continue to accrue interest, compared with $1.4 billion and $1.8 billion at December 31, 2020, respectively.

(b) Includes revolving credit, installment, automobile and student loans.

Restructured Loans In certain circumstances, the Company may modify the terms of a loan to maximize the collection of amounts due when a borrower is experiencing financial difficulties or is expected to experience difficulties in the near-term. In most cases the modification is either a concessionary reduction in interest rate, extension of the maturity date or reduction in the principal balance that would otherwise not be considered.

Troubled Debt Restructurings Concessionary modifications are classified as TDRs unless the modification results in only an insignificant delay in the payments to be received. TDRs accrue interest if the borrower complies with the revised terms and conditions and has demonstrated repayment performance at a level commensurate with the modified terms over several payment cycles, which is generally six months or greater. At September 30, 2021, performing TDRs were $3.3 billion, compared with $3.6 billion at December 31, 2020.

The Company continues to work with customers to modify loans for borrowers who are experiencing financial difficulties. Many of the Company’s TDRs are determined on a case-by-case basis in connection with ongoing loan collection processes. The modifications vary within each of the Company’s loan classes. Commercial lending segment TDRs generally include extensions of the maturity date and may be accompanied by an increase or decrease to the interest rate. The Company may also work with the borrower to make other changes to the loan to mitigate losses, such as obtaining additional collateral and/or guarantees to support the loan.

The Company has also implemented certain residential mortgage loan restructuring programs that may result in TDRs. The Company modifies residential mortgage loans under Federal Housing Administration, United States Department of Veterans Affairs, and its own internal programs. Under these programs, the Company offers qualifying homeowners the opportunity to permanently modify their loan and achieve more affordable monthly payments by providing loan concessions. These concessions may include adjustments to interest rates, conversion of adjustable rates to fixed rates, extensions of maturity dates or deferrals of payments, capitalization of accrued interest and/or outstanding advances, or in limited situations, partial forgiveness of loan principal. In most instances, participation in residential mortgage loan restructuring programs requires the customer to complete a short-term trial period. A permanent loan modification is contingent on the customer successfully completing the trial period arrangement, and the loan documents are not modified until that time. The Company reports loans in a trial period arrangement as TDRs and continues to report them as TDRs after the trial period.

14 U.S. Bancorp

Credit card and other retail loan TDRs are generally part of distinct restructuring programs providing customers modification solutions over a specified time period, generally up to 60 months.

In accordance with regulatory guidance, the Company considers secured consumer loans that have had debt discharged through bankruptcy where the borrower has not reaffirmed the debt to be TDRs. If the loan amount exceeds the collateral value, the loan is charged down to collateral value and the remaining amount is reported as nonperforming.

Loan modifications or concessions granted to customers resulting directly from the effects of the COVID-19 pandemic, who were otherwise in current payment status, are not considered to be TDRs.

The following table provides a summary of TDRs by loan class, including the delinquency status for TDRs that continue to accrue interest and TDRs included in nonperforming assets:

			As a Percent of Performing TDRs
At September 30, 2021 (Dollars in Millions)	Performing TDRs		30-89 Days Past Due			90 Days or More Past Due			Nonperforming TDRs			Total TDRs
Commercial	$	145		4.9	%		2.6	%	$	112	(a)	$	257
Commercial real estate		122		1.0			—			163	(b)		285
Residential mortgages		1,428		4.1			3.6			137			1,565	(d)
Credit card		228		9.9			4.0			—			228
Other retail		175		13.3			6.0			42	(c)		217	(e)
TDRs, excluding loans purchased from GNMA mortgage pools		2,098		5.4			3.6			454			2,552
Loans purchased from GNMA mortgage pools (g)		1,208		—			—			—			1,208	(f)
Total	$	3,306		3.4	%		2.3	%	$	454		$	3,760

(a) Primarily represents loans less than six months from the modification date that have not met the performance period required to return to accrual status (generally six months) and small business credit cards with a modified rate equal to 0 percent.

(b) Primarily represents loans less than six months from the modification date that have not met the performance period required to return to accrual status (generally six months).

(c) Primarily represents loans with a modified rate equal to 0 percent.

(d) Includes $242 million of residential mortgage loans to borrowers that have had debt discharged through bankruptcy and $24 million in trial period arrangements or previously placed in trial period arrangements but not successfully completed.

(e) Includes $73 million of other retail loans to borrowers that have had debt discharged through bankruptcy and $15 million in trial period arrangements or previously placed in trial period arrangements but not successfully completed.

(f) Includes $193 million of Federal Housing Administration and United States Department of Veterans Affairs residential mortgage loans to borrowers that have had debt discharged through bankruptcy and $152 million in trial period arrangements or previously placed in trial period arrangements but not successfully completed.

(g) Approximately 9.4 percent and 34.5 percent of the total TDR loans purchased from GNMA mortgage pools are 30-89 days past due and 90 days or more past due, respectively, but are not classified as delinquent as their repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs.

U.S. Bancorp 15

Short-term and Other Loan Modifications The Company makes short-term and other modifications that it does not consider to be TDRs, in limited circumstances, to assist borrowers experiencing temporary hardships. Short-term consumer lending modification programs include payment reductions, deferrals of up to three past due payments, and the ability to return to current status if the borrower makes required payments. The Company may also make short-term modifications to commercial lending loans, with the most common modification being an extension of the maturity date of three months or less. Such extensions generally are used when the maturity date is imminent and the borrower is experiencing some level of financial stress, but the Company believes the borrower will pay all contractual amounts owed.

COVID-19 Payment Relief The Company has offered payment relief, including forbearance, payment deferrals and other customer accommodations, to assist borrowers that have experienced financial hardship resulting from the effects of the COVID-19 pandemic. The majority of these borrowers were not delinquent on payments at the time they received the payment relief. From March 2020 through September 30, 2021, the Company had approved approximately 384,000 loan modifications for these borrowers, representing approximately $22.0 billion. The loans modified consisted primarily of payment forbearance or deferrals of 90 days or less. A portion of the borrowers who received account modifications are no longer participating in these payment relief programs, as the programs are generally short-term; and at September 30, 2021, approximately 19,000 accounts, representing approximately $3.0 billion, were currently in an active payment relief program. The recognition of delinquent or nonaccrual loans and loan net charge-offs may be delayed for those customers enrolled in these payment relief programs who would have otherwise moved into past due or nonaccrual status, as these customer accounts do not continue to age during the period the payment delay is provided.

The following table summarizes borrowers enrolled in payment relief programs as a result of the COVID-19 pandemic at September 30, 2021, as a percentage of the Company’s loans and loan balances:

	Percentage of Loan Accounts in Payment Relief Programs			Percentage of Loan Balances in Payment Relief Programs			Program Details
Commercial		.01	%		—	%	Primarily 3 month payment deferral up to a maximum of 6 months; interest continues to accrue with various payment options
Commercial real estate		.08			.60		Primarily 3 month payment deferral up to a maximum of 6 months; interest continues to accrue with various payment options
Residential mortgages (a)		.97			.96		Primarily 6 month payment forbearance, which may be extended up to 18 months; interest continues to accrue; cumulative payments suspended during forbearance period are either paid-off immediately or under a short-term repayment plan, or addressed through a permanent loan modification that either requires repayment at maturity or through restructured payments over time
Credit cards		.02			.04		Primarily payment reduction up to 6 months; payment relief of up to 3 months; interest continues to accrue
Other retail		.07			.19		Home equity loan programs are similar to residential mortgage programs; programs for other loan portfolios are primarily 2 month payment deferral up to a maximum of 4 months; interest continues to accrue
Total loans (a)		.04	%		.35	%

Note: Payment relief generally includes payment deferrals, forbearances, extensions and re-ages, and excludes loans made under the Small Business Administration’s (“SBA”) Paycheck Protection Program, as amounts due under that program are expected to be fully forgiven by the SBA.

(a) Excludes loans purchased from GNMA mortgage pools, whose repayments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. At September 30, 2021, 19.44 percent of the total number of accounts and 20.91 percent of the total loan balances of loans purchased from GNMA mortgage pools were to borrowers enrolled in payment relief programs as a result of the COVID-19 pandemic. Including these loans, 5.11 percent of the total number of accounts and 3.50 percent of the total balances of residential mortgages were to borrowers enrolled in payment relief programs as a result of the COVID-19 pandemic. Including these loans, .15 percent of the total number of accounts and 1.01 percent of the total balances of all loans were to borrowers enrolled in payment relief programs as a result of the COVID-19 pandemic.

16 U.S. Bancorp

Nonperforming Assets The level of nonperforming assets represents another indicator of the potential for future credit losses. Nonperforming assets include nonaccrual loans, restructured loans not performing in accordance with modified terms and not accruing interest, restructured loans that have not met the performance period required to return to accrual status, other real estate owned (“OREO”) and other nonperforming assets owned by the Company. Interest payments collected from assets on nonaccrual status are generally applied against the principal balance and not recorded as income. However, interest income may be recognized for interest payments if the remaining carrying amount of the loan is believed to be collectible.

At September 30, 2021, total nonperforming assets were $944 million, compared to $1.3 billion at December 31, 2020. The $354 million (27.3 percent) decrease in nonperforming assets was driven by decreases in nonperforming commercial and commercial real estate loans. The ratio of total nonperforming assets to total loans and other real estate was 0.32 percent at September 30, 2021, compared with 0.44 percent at December 31, 2020. Nonperforming assets are expected to continue to decline over the next several quarters. However, some manageable levels of elevated nonperforming assets in certain industries and loan categories impacted by the pandemic may experience longer recovery periods.

OREO was $17 million at September 30, 2021, compared with $24 million at December 31, 2020, and was related to foreclosed properties that previously secured loan balances. These balances exclude foreclosed GNMA loans whose repayments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs.

The following table provides an analysis of OREO, as a percent of their related loan balances, including geographical location detail for residential (residential mortgage, home equity and second mortgage) and commercial (commercial and commercial real estate) loan balances:

	Amount				As a Percent of Ending Loan Balances
(Dollars in Millions)	September 30, 2021		December 31, 2020		September 30, 2021			December 31, 2020
Residential
New York	$	2	$	2		.14	%		.17	%
California		2		2		.01			.01
Oregon		2		2		.07			.07
Illinois		1		2		.02			.04
Wisconsin		1		1		.06			.06
All other states		9		14		.02			.03
Total residential		17		23		.02			.03
Commercial
Iowa		—		1		—			.04
All other states		—		—		—			—
Total commercial		—		1		—			—
Total	$	17	$	24		.01	%		.01	%

U.S. Bancorp 17

 Table 6    Nonperforming Assets (a)

(Dollars in Millions)	September 30, 2021			December 31, 2020
Commercial
Commercial	$	179		$	321
Lease financing		37			54
Total commercial		216			375
Commercial Real Estate
Commercial mortgages		215			411
Construction and development		81			39
Total commercial real estate		296			450
Residential Mortgages (b)		237			245
Credit Card		—			—
Other Retail
Retail leasing		11			13
Home equity and second mortgages		120			107
Other		26			34
Total other retail		157			154
Total nonperforming loans		906			1,224
Other Real Estate (c)		17			24
Other Assets		21			50
Total nonperforming assets	$	944		$	1,298
Accruing loans 90 days or more past due (b)	$	385		$	477
Nonperforming loans to total loans		.30	%		.41	%
Nonperforming assets to total loans plus other real estate (c)		.32	%		.44	%

Changes in Nonperforming Assets

(Dollars in Millions)	Commercial and Commercial Real Estate			Residential Mortgages, Credit Card and Other Retail			Total
Balance December 31, 2020	$	854		$	444		$	1,298
Additions to nonperforming assets
New nonaccrual loans and foreclosed properties		277			153			430
Advances on loans		8			1			9
Total additions		285			154			439
Reductions in nonperforming assets
Paydowns, payoffs		(235	)		(79	)		(314	)
Net sales		(173	)		(13	)		(186	)
Return to performing status		(111	)		(65	)		(176	)
Charge-offs (d)		(105	)		(12	)		(117	)
Total reductions		(624	)		(169	)		(793	)
Net additions to (reductions in) nonperforming assets		(339	)		(15	)		(354	)
Balance September 30, 2021	$	515		$	429		$	944

(a) Throughout this document, nonperforming assets and related ratios do not include accruing loans 90 days or more past due.

(b) Excludes $1.5 billion at September 30, 2021, and $1.8 billion at December 31, 2020, of loans purchased from GNMA mortgage pools that are 90 days or more past due that continue to accrue interest, as their repayments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs.

(c) Foreclosed GNMA loans of $19 million at September 30, 2021, and $33 million at December 31, 2020, continue to accrue interest and are recorded as other assets and excluded from nonperforming assets because they are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs.

(d) Charge-offs exclude actions for certain card products and loan sales that were not classified as nonperforming at the time the charge-off occurred.

18 U.S. Bancorp

 Table 7    Net Charge-offs as a Percent of Average Loans Outstanding

	Three Months Ended September 30						Nine Months Ended September 30
	2021			2020			2021			2020
Commercial
Commercial		.05	%		.60	%		.13	%		.41	%
Lease financing		.08			.78			.15			.52
Total commercial		.05			.61			.13			.42
Commercial Real Estate
Commercial mortgages		.01			1.13			(.05	)		.46
Construction and development		.44			(.07	)		.21			—
Total commercial real estate		.13			.81			.02			.34
Residential Mortgages		(.05	)		(.02	)		(.05	)		(.01	)
Credit Card		2.01			3.63			2.52			3.95
Other Retail
Retail leasing		.05			.94			.02			1.14
Home equity and second mortgages		(.11	)		(.06	)		(.09	)		(.01	)
Other		.20			.43			.26			.59
Total other retail		.13			.39			.16			.52
Total loans		.20	%		.66	%		.25	%		.58	%

Analysis of Loan Net Charge-Offs Total loan net charge-offs were $147 million for the third quarter and $550 million for the first nine months of 2021, compared with $515 million and $1.3 billion, respectively, for the same periods of 2020. The year-over-year decreases in net charge-offs reflected improvement across most loan categories, associated with improving economic conditions, borrower liquidity and strong asset prices in the market that support repayment and recovery on problem loans. The ratio of total loan net charge-offs to average loans outstanding on an annualized basis for the third quarter and first nine months of 2021 was 0.20 percent and 0.25 percent, respectively, compared with 0.66 percent and 0.58 percent, respectively, for the same periods of 2020. The Company expects net charge-offs to return to more normalized levels over time as the beneficial impact of government stimulus during the pandemic dissipates.

Analysis and Determination of the Allowance for Credit Losses The allowance for credit losses is established for current expected credit losses on the Company’s loan and lease portfolio, including unfunded credit commitments. The allowance considers expected losses for the remaining lives of the applicable assets, inclusive of expected recoveries. The allowance for credit losses is increased through provisions charged to earnings and reduced by net charge-offs. Management evaluates the appropriateness of the allowance for credit losses on a quarterly basis. Multiple economic scenarios are considered over a three-year reasonable and supportable forecast period, which includes increasing consideration of historical loss experience over years two and three. These economic scenarios are constructed with interrelated projections of multiple economic variables, and loss estimates are produced that consider the historical correlation of those economic variables with credit losses. After the forecast period, the Company fully reverts to long-term historical loss experience, adjusted for prepayments and characteristics of the current loan and lease portfolio, to estimate losses over the remaining life of the portfolio. The economic scenarios are updated at least quarterly and are designed to provide a range of reasonable estimates from better to worse than current expectations. Scenarios are weighted based on the Company’s expectation of economic conditions for the foreseeable future and reflect significant judgment and consideration of uncertainties that exist. Final loss estimates also consider factors affecting credit losses not reflected in the scenarios, due to the unique aspects of current conditions and expectations. These factors may include, but are not limited to, loan servicing practices, regulatory guidance, and/or fiscal and monetary policy actions. Because business processes and credit risks associated with unfunded credit commitments are essentially the same as for loans, the Company utilizes similar processes to estimate its liability for unfunded credit commitments, which is included in other liabilities in the Consolidated Balance Sheet. Both the allowance for loan losses and the liability for unfunded credit commitments are included in the Company’s analysis of credit losses and reported reserve ratios.

The allowance recorded for credit losses utilizes forward-looking expected loss models to consider a variety of factors affecting lifetime credit losses. These factors include, but are not limited to, macroeconomic variables such as unemployment rates, real estate prices, gross domestic product levels and corporate bonds spreads, as well as loan and borrower characteristics, such as internal risk ratings on commercial loans and consumer credit scores, delinquency status, collateral

U.S. Bancorp 19

type and available valuation information, consideration of end-of-term losses on lease residuals, and the remaining term of the loan, adjusted for expected prepayments. For each loan portfolio, model estimates are adjusted as necessary to consider any relevant changes in portfolio composition, lending policies, underwriting standards, risk management practices, economic conditions or other factors that may affect the accuracy of the model. Expected credit loss estimates also include consideration of expected cash recoveries on loans previously charged-off or expected recoveries on collateral-dependent loans where recovery is expected through sale of the collateral. Where loans do not exhibit similar risk characteristics, an individual analysis is performed to consider expected credit losses.

The allowance recorded for individually evaluated loans greater than $5 million in the commercial lending segment is based on an analysis utilizing expected cash flows discounted using the original effective interest rate, the observable market price of the loan, or the fair value of the collateral, less selling costs, for collateral-dependent loans as appropriate. For commercial TDRs individually evaluated for impairment, attributes of the borrower are the primary factors in determining the allowance for credit losses. However, historical loss experience is also incorporated into the allowance methodology applied to this category of loans. Commercial lending segment TDR loans may be collectively evaluated for impairment where observed performance history, including defaults, is a primary driver of the loss allocation.

The allowance recorded for TDR loans in the consumer lending segment is determined on a homogenous pool basis utilizing expected cash flows discounted using the original effective interest rate of the pool. The expected cash flows on TDR loans consider subsequent payment defaults since modification, the borrower’s ability to pay under the restructured terms, and the timing and amount of payments. The allowance for collateral-dependent loans in the consumer lending segment is determined based on the current fair value of the collateral less costs to sell.

When evaluating the appropriateness of the allowance for credit losses for any loans and lines in a junior lien position, the Company considers the delinquency and modification status of the first lien. At September 30, 2021, the Company serviced the first lien on 36 percent of the home equity loans and lines in a junior lien position. The Company also considers the status of first lien mortgage accounts reported on customer credit bureau files when the first lien is not serviced by the Company. Regardless of whether the Company services the first lien, an assessment is made of economic conditions, problem loans, recent loss experience and other factors in determining the allowance for credit losses. Based on the available information, the Company estimated $247 million or 2.3 percent of its total home equity portfolio at September 30, 2021, represented non-delinquent junior liens where the first lien was delinquent or modified, excluding loans in COVID-related forbearance programs.

The Company considers historical loss experience on the loans and lines in a junior lien position to establish loss estimates for junior lien loans and lines the Company services that are current, but the first lien is delinquent or modified. The historical long-term average loss experience related to junior liens has been relatively limited (less than 1 percent of the total portfolio annually), and estimates are adjusted to consider current collateral support and portfolio risk characteristics. These include updated credit scores and collateral estimates obtained on the Company’s home equity portfolio each quarter. In its evaluation of the allowance for credit losses, the Company also considers the increased risk of loss associated with home equity lines that are contractually scheduled to convert from a revolving status to a fully amortizing payment.

Beginning January 1, 2020, when a loan portfolio is purchased, the acquired loans are divided into those considered purchased with more than insignificant credit deterioration (“PCD”) and those not considered purchased with more than insignificant credit deterioration. An allowance is established for each population and considers product mix, risk characteristics of the portfolio, bankruptcy experience, delinquency status and refreshed LTV ratios when possible. The allowance established for purchased loans not considered PCD is recognized through provision expense upon acquisition, whereas the allowance established for loans considered PCD at acquisition is offset by an increase in the basis of the acquired loans. Any subsequent increases and decreases in the allowance related to purchased loans, regardless of PCD status, are recognized through provision expense, with charge-offs charged to the allowance. The Company did not have a material amount of PCD loans included in its loan portfolio at September 30, 2021.

The Company’s methodology for determining the appropriate allowance for credit losses also considers the imprecision inherent in the methodologies used and allocated to the various loan portfolios. As a result, amounts determined under the methodologies described above are adjusted by management to consider the potential impact of other qualitative factors not captured in quantitative model adjustments which include, but are not limited to, the following: model imprecision,

20 U.S. Bancorp

imprecision in economic scenario assumptions, and emerging risks related to either changes in the economic environment that are affecting specific portfolios, or changes in portfolio concentrations over time that may affect model performance. The consideration of these items results in adjustments to allowance amounts included in the Company’s allowance for credit losses for each loan portfolio.

Although the Company determined the amount of each element of the allowance separately and considers this process to be an important credit management tool, the entire allowance for credit losses is available for the entire loan portfolio. The actual amount of losses can vary significantly from the estimated amounts.

At September 30, 2021, the allowance for credit losses was $6.3 billion (2.12 percent of period-end loans), compared with an allowance of $8.0 billion (2.69 percent of period-end loans) at December 31, 2020. The ratio of the allowance for credit losses to nonperforming loans was 695 percent at September 30, 2021, compared with 654 percent at December 31, 2020. The ratio of the allowance for credit losses to annualized loan net charge-offs was 1,080 percent at September 30, 2021, compared with 448 percent of full year 2020 net charge-offs at December 31, 2020.

The decrease in the allowance for credit losses of $1.7 billion (21.3 percent) at September 30, 2021, compared with December 31, 2020, reflected factors affecting economic conditions during the first nine months of 2021, including the enactment of additional benefits from government stimulus programs and broad vaccine availability in the United States that has reduced the risks associated with COVID-19, contributing to an economic recovery. However, economic uncertainty remains associated with rising inflationary concerns, additional virus variants and lack of a clear path to government funding. In addition to these factors, expected loss estimates consider various factors including customer specific information impacting changes in risk ratings, projected delinquencies and potential effects of diminishing liquidity without support of mortgage forbearance and direct federal stimulus. Currently, consumer credit trends continue to perform better than expected, while select commercial portfolios most impacted by COVID-19 continue to be monitored for structural shifts associated with the pandemic.

Changes in economic conditions during the first nine months of 2021 included improvements in projected gross domestic product and unemployment levels for 2021, which reflected the additional government stimulus and availability of vaccines. These factors are evaluated through a combination of quantitative calculations using economic scenarios and qualitative assessments that consider the high degree of uncertainty related to the unprecedented levels of both economic stress and the stimulus response.

The following table summarizes the baseline forecast for key economic variables the Company used in its estimate of the allowance for credit losses at September 30, 2021 and December 31, 2020:

	September 30, 2021			December 31, 2020
United States unemployment rate for the three months ending (a)
September 30, 2021		5.2	%		7.0	%
December 31, 2021		4.5			6.8
United States real gross domestic product for the three months ending (b)
September 30, 2021		1.8	%		.1	%
December 31, 2021		3.6			1.5

(a) Reflects quarterly average of forecasted reported United States unemployment rate.

(b) Reflects cumulative change from December 31, 2019.

U.S. Bancorp 21

Baseline economic forecasts are used in combination with alternative scenarios and historical loss experience as is considered reasonable and supportable to inform the Company’s allowance for credit losses. Changes in the allowance for credit losses are based on a variety of factors, including loan balance changes, portfolio credit quality and mix changes, and changes in general economic conditions and expectations (including for unemployment and gross domestic product), among other factors. Based on economic conditions at September 30, 2021, it was difficult to estimate the length and severity of the longer term effects on certain industry sectors that may result from COVID-19 and the impact of other factors that may influence the level of eventual losses and corresponding requirements for the allowance for credit losses, including the impact of inflationary pressures on certain lending sectors and diminishing liquidity after economic stimulus programs and accommodations delaying mortgage and rent payments end. While reserves consider the uncertainty in these estimates, the unpredictability of the COVID-19 pandemic could result in the recognition of credit losses in the Company’s loan portfolios and increases in the allowance for credit losses. Scenarios worse than the Company’s expected outcome at September 30, 2021 include risks that government stimulus in response to the COVID-19 pandemic is less effective than expected, or that a longer or more severe health crisis prolongs the downturn in economic activity, potentially reducing the number of businesses that are ultimately able to resume operations after the crisis has passed. Other factors considered include concerns around inflationary pressures, new virus variants, sustainability of asset values and borrower liquidity, along with the lack of a clear path to government funding.

The allowance for credit losses related to commercial lending segment loans decreased $926 million during the first nine months of 2021, due to improvements in general economic conditions and portfolio credit quality that included some return of economic activity in certain industry sectors affected by COVID-19.

The following table summarizes the Company’s commercial lending segment credit exposure to customers within the industry sectors most impacted by COVID-19, as a percentage of total loans and legal commitments outstanding at September 30, 2021:

	Loans			Outstanding Commitments
Retail		3.1	%		4.7	%
Energy (includes Oil and gas)		.7			2.1
Media and entertainment		1.6			2.1
Lodging		1.1			.8
Airline		.3			.5

The allowance for credit losses related to consumer lending segment loans decreased $784 million during the first nine months of 2021, due to improving economic risks, including those due to decreased unemployment, along with continued strong underlying credit quality that supports expectations of long-term repayment.

22 U.S. Bancorp

 Table 8    Summary of Allowance for Credit Losses

	Three Months Ended September 30						Nine Months Ended September 30
(Dollars in Millions)	2021			2020			2021			2020
Balance at beginning of period	$	6,610		$	7,890		$	8,010		$	4,491
Change in accounting principle (a)		—			—			—			1,499
Charge-Offs
Commercial
Commercial		37			180			171			378
Lease financing		3			13			13			28
Total commercial		40			193			184			406
Commercial real estate
Commercial mortgages		1			88			9			107
Construction and development		13			1			19			5
Total commercial real estate		14			89			28			112
Residential mortgages		3			4			13			15
Credit card		154			236			536			775
Other retail
Retail leasing		5			25			20			86
Home equity and second mortgages		3			3			9			14
Other		47			61			164			216
Total other retail		55			89			193			316
Total charge-offs		266			611			954			1,624
Recoveries
Commercial
Commercial		24			13			80			37
Lease financing		2			2			7			6
Total commercial		26			15			87			43
Commercial real estate
Commercial mortgages		—			3			20			4
Construction and development		1			3			2			5
Total commercial real estate		1			6			22			9
Residential mortgages		13			7			38			20
Credit card		43			35			133			111
Other retail
Retail leasing		4			5			19			14
Home equity and second mortgages		6			5			17			15
Other		26			23			88			67
Total other retail		36			33			124			96
Total recoveries		119			96			404			279
Net Charge-Offs
Commercial
Commercial		13			167			91			341
Lease financing		1			11			6			22
Total commercial		14			178			97			363
Commercial real estate
Commercial mortgages		1			85			(11	)		103
Construction and development		12			(2	)		17			—
Total commercial real estate		13			83			6			103
Residential mortgages		(10	)		(3	)		(25	)		(5	)
Credit card		111			201			403			664
Other retail
Retail leasing		1			20			1			72
Home equity and second mortgages		(3	)		(2	)		(8	)		(1	)
Other		21			38			76			149
Total other retail		19			56			69			220
Total net charge-offs		147			515			550			1,345
Provision for credit losses		(163	)		635			(1,160	)		3,365
Balance at end of period	$	6,300		$	8,010		$	6,300		$	8,010
Components
Allowance for loan losses	$	5,792		$	7,407
Liability for unfunded credit commitments		508			603
Total allowance for credit losses	$	6,300		$	8,010
Allowance for Credit Losses as a Percentage of
Period-end loans		2.12	%		2.61	%
Nonperforming loans		695			678
Nonperforming and accruing loans 90 days or more past due		488			488
Nonperforming assets		667			631
Annualized net charge-offs		1,080			391

(a) Effective January 1, 2020, the Company adopted accounting guidance which changed impairment recognition of financial instruments to a model that is based on expected losses rather than incurred losses.

U.S. Bancorp 23

Residual Value Risk Management The Company manages its risk to changes in the residual value of leased vehicles, office and business equipment, and other assets through disciplined residual valuation setting at the inception of a lease, diversification of its leased assets, regular residual asset valuation reviews and monitoring of residual value gains or losses upon the disposition of assets. As of September 30, 2021, no significant change in the amount of residual values or concentration of the portfolios had occurred since December 31, 2020. Refer to “Management’s Discussion and Analysis — Residual Value Risk Management” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, for further discussion on residual value risk management.

Operational Risk Management The Company operates in many different businesses in diverse markets and relies on the ability of its employees and systems to process a high number of transactions. Operational risk is inherent in all business activities, and the management of this risk is important to the achievement of the Company’s objectives. Business lines have direct and primary responsibility and accountability for identifying, controlling, and monitoring operational risks embedded in their business activities, including those additional or increased risks created by the economic and financial disruptions, and the Company’s alternative working arrangements resulting from the COVID-19 pandemic. The Company maintains a system of controls with the objective of providing proper transaction authorization and execution, proper system operations, proper oversight of third parties with whom it does business, safeguarding of assets from misuse or theft, and ensuring the reliability and security of financial and other data. Refer to “Management’s Discussion and Analysis — Operational Risk Management” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, for further discussion on operational risk management.

Compliance Risk Management The Company may suffer legal or regulatory sanctions, material financial loss, or damage to its reputation through failure to comply with laws, regulations, rules, standards of good practice, and codes of conduct, including those related to compliance with Bank Secrecy Act/anti-money laundering requirements, sanctions compliance requirements as administered by the Office of Foreign Assets Control, consumer protection and other requirements. The Company has controls and processes in place for the assessment, identification, monitoring, management and reporting of compliance risks and issues including those created or increased by the economic and financial disruptions caused by the COVID-19 pandemic. Refer to “Management’s Discussion and Analysis — Compliance Risk Management” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, for further discussion on compliance risk management.

Interest Rate Risk Management In the banking industry, changes in interest rates are a significant risk that can impact earnings and the safety and soundness of an entity. The Company manages its exposure to changes in interest rates through asset and liability management activities within guidelines established by its Asset Liability Management Committee (“ALCO”) and approved by the Board of Directors. The ALCO has the responsibility for approving and ensuring compliance with the ALCO management policies, including interest rate risk exposure. One way the Company measures and analyzes its interest rate risk is through net interest income simulation analysis.

Simulation analysis incorporates substantially all of the Company’s assets and liabilities and off-balance sheet instruments, together with forecasted changes in the balance sheet and assumptions that reflect the current interest rate environment. Through this simulation, management estimates the impact on net interest income of various interest rate changes that differ in the direction, amount and speed of change over time, as well as the shape of the yield curve. This simulation includes assumptions about how the balance sheet is likely to be affected by changes in loan and deposit growth. Assumptions are made to project interest rates for new loans and deposits based on historical analysis, management’s outlook and re-pricing strategies. These assumptions are reviewed and validated on a periodic basis with sensitivity analysis being provided for key variables of the simulation. The results are reviewed monthly by the ALCO and are used to guide asset/liability management strategies.

The Company manages its interest rate risk position by holding assets with desired interest rate risk characteristics on its balance sheet, implementing certain pricing strategies for loans and deposits and selecting derivatives and various funding and investment portfolio strategies.

Table 9 summarizes the projected impact to net interest income over the next 12 months of various potential interest rate changes. The sensitivity of the projected impact to net interest income over the next 12 months is dependent on balance sheet growth, product mix, deposit behavior, pricing and funding decisions. While the Company utilizes models and assumptions based on historical information and expected behaviors, actual outcomes could vary significantly.

24 U.S. Bancorp

 Table 9    Sensitivity of Net Interest Income

	September 30, 2021											December 31, 2020
	Down 50 bps Immediate			Up 50 bps Immediate			Down 200 bps Gradual		Up 200 bps Gradual			Down 50 bps Immediate			Up 50 bps Immediate			Down 200 bps Gradual		Up 200 bps Gradual
Net interest income		(2.75	)%		3.54	%		*		5.84	%		(4.48	)%		4.58	%		*		6.57	%

* Given the level of interest rates, downward rate scenario is not computed.

Use of Derivatives to Manage Interest Rate and Other Risks To manage the sensitivity of earnings and capital to interest rate, prepayment, credit, price and foreign currency fluctuations (asset and liability management positions), the Company enters into derivative transactions. The Company uses derivatives for asset and liability management purposes primarily in the following ways:

• To convert fixed-rate debt and available-for-sale investment securities from fixed-rate payments to floating-rate payments;

• To convert floating-rate debt from floating-rate payments to fixed-rate payments;

• To mitigate changes in value of the Company’s unfunded mortgage loan commitments, funded MLHFS and MSRs;

• To mitigate remeasurement volatility of foreign currency denominated balances; and

• To mitigate the volatility of the Company’s net investment in foreign operations driven by fluctuations in foreign currency exchange rates.

In addition, the Company enters into interest rate and foreign exchange derivative contracts to support the business requirements of its customers (customer-related positions). The Company minimizes the market and liquidity risks of customer-related positions by either entering into similar offsetting positions with broker-dealers, or on a portfolio basis by entering into other derivative or non-derivative financial instruments that partially or fully offset the exposure from these customer-related positions. The Company may enter into derivative contracts that are either exchange-traded, centrally cleared through clearinghouses or over-the-counter. The Company does not utilize derivatives for speculative purposes.

The Company does not designate all of the derivatives that it enters into for risk management purposes as accounting hedges because of the inefficiency of applying the accounting requirements and may instead elect fair value accounting for the related hedged items. In particular, the Company enters into interest rate swaps, swaptions, forward commitments to buy to-be-announced securities (“TBAs”), U.S. Treasury and Eurodollar futures and options on U.S. Treasury futures to mitigate fluctuations in the value of its MSRs, but does not designate those derivatives as accounting hedges.

Additionally, the Company uses forward commitments to sell TBAs and other commitments to sell residential mortgage loans at specified prices to economically hedge the interest rate risk in its residential mortgage loan production activities. At September 30, 2021, the Company had $10.7 billion of forward commitments to sell, hedging $5.0 billion of MLHFS and $8.6 billion of unfunded mortgage loan commitments. The forward commitments to sell and the unfunded mortgage loan commitments on loans intended to be sold are considered derivatives under the accounting guidance related to accounting for derivative instruments and hedging activities. The Company has elected the fair value option for the MLHFS.

Derivatives are subject to credit risk associated with counterparties to the contracts. Credit risk associated with derivatives is measured by the Company based on the probability of counterparty default, including consideration of the COVID-19 pandemic. The Company manages the credit risk of its derivative positions by diversifying its positions among various counterparties, by entering into master netting arrangements, and, where possible, by requiring collateral arrangements. The Company may also transfer counterparty credit risk related to interest rate swaps to third parties through the use of risk participation agreements. In addition, certain interest rate swaps, interest rate forwards and credit contracts are required to be centrally cleared through clearinghouses to further mitigate counterparty credit risk.

For additional information on derivatives and hedging activities, refer to Notes 13 and 14 in the Notes to Consolidated Financial Statements.

LIBOR Transition In July 2017, the United Kingdom’s Financial Conduct Authority (the “FCA”) announced that it would no longer require banks to submit rates for the London InterBank Offered Rate (“LIBOR”) after 2021. In March 2021, the FCA and the administrator of LIBOR announced that LIBOR will no longer be published on a representative basis after December 31, 2021, except for the most commonly used tenors of United States Dollar LIBOR which will no longer be published on a representative basis after June 30, 2023. The Company holds financial instruments that will be impacted by the discontinuance of LIBOR, including

U.S. Bancorp 25

certain loans, investment securities, derivatives, borrowings and other financial instruments that use LIBOR as the benchmark rate. The Company also provides various services to customers in its capacities as trustee and servicer, which involve financial instruments that will be similarly impacted by the discontinuance of LIBOR. The Company anticipates these financial instruments will require transition to a new reference rate. This transition will occur over time as many of these arrangements do not have an alternative rate referenced in their contracts or a clear path for the parties to agree upon an alternative reference rate.

In order to facilitate the transition process, the Company has instituted a LIBOR Transition Office and commenced an enterprise-wide project to identify, assess, monitor and mitigate risks associated with the expected discontinuance or unavailability of LIBOR, actively engage with industry working groups and regulators, achieve operational readiness for the use of alternative reference rates and engage impacted customers to remediate and transition impacted instruments. The Company has invested in its systems, models, procedures and internal infrastructure to accept alternative reference rates to LIBOR and has begun offering these alternatives to clients. The Company also adopted industry best practice guidelines for fallback language for new transactions, converted its cleared interest rate swaps discounting to Secured Overnight Financing Rate discounting, and distributed communications related to the transition to certain impacted parties, both inside and outside the Company. Refer to “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, for further discussion on potential risks that could adversely affect the Company’s financial results as a result of the LIBOR transition.

Market Risk Management In addition to interest rate risk, the Company is exposed to other forms of market risk, principally related to trading activities which support customers’ strategies to manage their own foreign currency, interest rate risk and funding activities. For purposes of its internal capital adequacy assessment process, the Company considers risk arising from its trading activities, as well as the remeasurement volatility of foreign currency denominated balances included on its Consolidated Balance Sheet (collectively, “Covered Positions”), employing methodologies consistent with the requirements of regulatory rules for market risk. The Company’s Market Risk Committee (“MRC”), within the framework of the ALCO, oversees market risk management. The MRC monitors and reviews the Company’s Covered Positions and establishes policies for market risk management, including exposure limits for each portfolio. The Company uses a VaR approach to measure general market risk. Theoretically, VaR represents the statistical risk of loss the Company has to adverse market movements over a one-day time horizon. The Company uses the Historical Simulation method to calculate VaR for its Covered Positions measured at the ninety-ninth percentile using a one-year look-back period for distributions derived from past market data. The market factors used in the calculations include those pertinent to market risks inherent in the underlying trading portfolios, principally those that affect the Company’s corporate bond trading business, foreign currency transaction business, client derivatives business, loan trading business and municipal securities business, as well as those inherent in the Company’s foreign denominated balances and the derivatives used to mitigate the related measurement volatility. On average, the Company expects the one-day VaR to be exceeded by actual losses two to three times per year related to these positions. The Company monitors the accuracy of internal VaR models and modeling processes by back-testing model performance, regularly updating the historical data used by the VaR models and regular model validations to assess the accuracy of the models’ input, processing, and reporting components. All models are required to be independently reviewed and approved prior to being placed in use. If the Company were to experience market losses in excess of the estimated VaR more often than expected, the VaR models and associated assumptions would be analyzed and adjusted.

The average, high, low and period-end one-day VaR amounts for the Company’s Covered Positions were as follows:

Nine Months Ended September 30 (Dollars in Millions)	2021		2020
Average	$	2	$	2
High		4		3
Low		1		1
Period-end		2		2

The Company did not experience any actual losses for its combined Covered Positions that exceeded VaR during the nine months ended September 30, 2021. Given the market volatility in the first quarter of 2020 resulting from effects of the COVID-19 pandemic, the Company experienced actual losses for its combined Covered Positions that exceeded VaR five times during the nine months ended September 30, 2020. The Company stress tests its market risk measurements to provide management with perspectives on market events that may not be captured by its VaR models, including worst case historical market movement combinations that have not necessarily occurred on the same date.

26 U.S. Bancorp

The Company calculates Stressed VaR using the same underlying methodology and model as VaR, except that a historical continuous one-year look-back period is utilized that reflects a period of significant financial stress appropriate to the Company’s Covered Positions. The period selected by the Company includes the significant market volatility of the last four months of 2008.

The average, high, low and period-end one-day Stressed VaR amounts for the Company’s Covered Positions were as follows:

Nine Months Ended September 30 (Dollars in Millions)	2021		2020
Average	$	7	$	6
High		9		8
Low		5		4
Period-end		7		7

Valuations of positions in client derivatives and foreign currency activities are based on discounted cash flow or other valuation techniques using market-based assumptions. These valuations are compared to third party quotes or other market prices to determine if there are significant variances. Significant variances are approved by senior management in the Company’s corporate functions. Valuation of positions in the corporate bond trading, loan trading and municipal securities businesses are based on trader marks. These trader marks are evaluated against third-party prices, with significant variances approved by senior management in the Company’s corporate functions.

The Company also measures the market risk of its hedging activities related to residential MLHFS and MSRs using the Historical Simulation method. The VaRs are measured at the ninety-ninth percentile and employ factors pertinent to the market risks inherent in the valuation of the assets and hedges. A one-year look-back period is used to obtain past market data for the models.

The average, high and low VaR amounts for the residential MLHFS and related hedges and the MSRs and related hedges were as follows:

Nine Months Ended September 30 (Dollars in Millions)	2021		2020
Residential Mortgage Loans Held For Sale and Related Hedges
Average	$	10	$	8
High		19		22
Low		5		2
Mortgage Servicing Rights and Related Hedges
Average	$	4	$	19
High		11		54
Low		1		6

Liquidity Risk Management The Company’s liquidity risk management process is designed to identify, measure, and manage the Company’s funding and liquidity risk to meet its daily funding needs and to address expected and unexpected changes in its funding requirements. The Company engages in various activities to manage its liquidity risk. These activities include diversifying its funding sources, stress testing, and holding readily-marketable assets which can be used as a source of liquidity if needed. In addition, the Company’s profitable operations, sound credit quality and strong capital position have enabled it to develop a large and reliable base of core deposit funding within its market areas and in domestic and global capital markets.

The Company’s Board of Directors approves the Company’s liquidity policy. The Risk Management Committee of the Company’s Board of Directors oversees the Company’s liquidity risk management process and approves a contingency funding plan. The ALCO reviews the Company’s liquidity policy and limits, and regularly assesses the Company’s ability to meet funding requirements arising from adverse company-specific or market events.

The Company regularly projects its funding needs under various stress scenarios and maintains a contingency funding plan consistent with the Company’s access to diversified sources of contingent funding. The Company maintains a substantial level of total available liquidity in the form of on-balance sheet and off-balance sheet funding sources. These liquidity sources include cash at the Federal Reserve Bank and certain European central banks, unencumbered liquid assets, and capacity to borrow from the FHLB and at Federal Reserve Bank’s Discount Window. At September 30, 2021, the fair value of unencumbered investment securities totaled $117.6 billion, compared with $125.9 billion at December 31, 2020. Refer to Note 4 of the Notes to Consolidated Financial Statements and “Balance Sheet Analysis” for further information on investment securities maturities and trends. Asset liquidity is further enhanced by the Company’s practice of pledging loans to access secured borrowing facilities through the FHLB and Federal Reserve Bank. At September 30, 2021, the Company could have borrowed a total of an additional $97.4 billion from the FHLB and Federal Reserve Bank based on collateral available for additional borrowings.

The Company’s diversified deposit base provides a sizeable source of relatively stable and low-cost funding, while reducing the Company’s reliance on the wholesale markets. Total deposits were $442.9 billion at September 30, 2021, compared with $429.8 billion at December 31, 2020. Refer to “Balance Sheet Analysis” for further information on the Company’s deposits.

Additional funding is provided by long-term debt and short-term borrowings. Long-term debt was $35.7 billion at September 30, 2021, and is an important funding source because of its multi-year borrowing structure. Short-term borrowings were $16.1 billion at

U.S. Bancorp 27

September 30, 2021, and supplement the Company’s other funding sources. Refer to “Balance Sheet Analysis” for further information on the Company’s long-term debt and short-term borrowings.

In addition to assessing liquidity risk on a consolidated basis, the Company monitors the parent company’s liquidity. The Company establishes limits for the minimal number of months into the future where the parent company can meet existing and forecasted obligations with cash and securities held that can be readily monetized. The Company measures and manages this limit in both normal and adverse conditions. The Company maintains sufficient funding to meet expected capital and debt service obligations for 24 months without the support of dividends from subsidiaries and assuming access to the wholesale markets is maintained. The Company maintains sufficient liquidity to meet its capital and debt service obligations for 12 months under adverse conditions without the support of dividends from subsidiaries or access to the wholesale markets. The parent company is currently well in excess of required liquidity minimums.

At September 30, 2021, parent company long-term debt outstanding was $19.2 billion, compared with $20.9 billion at December 31, 2020. The decrease was primarily due to $1.5 billion of medium-term note repayments. As of September 30, 2021, there was no parent company debt scheduled to mature in the remainder of 2021.

The Company is subject to a regulatory Liquidity Coverage Ratio (“LCR”) requirement which requires banks to maintain an adequate level of unencumbered high quality liquid assets to meet estimated liquidity needs over a 30-day stressed period. At September 30, 2021, the Company was compliant with this requirement.

Beginning July 1, 2021, the Company is also subject to a regulatory Net Stable Funding Ratio (“NSFR”) requirement which requires banks to maintain a minimum level of stable funding based on the liquidity characteristics of their assets, commitments, and derivative exposures over a one-year time horizon. At September 30, 2021, the Company was compliant with this requirement.

Refer to “Management’s Discussion and Analysis — Liquidity Risk Management” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, for further discussion on liquidity risk management.

European Exposures The Company provides merchant processing and corporate trust services in Europe either directly or through banking affiliations in Europe. Revenue generated from sources in Europe represented approximately 2 percent of the Company’s total net revenue for both the three and nine months ended September 30, 2021. Operating cash for these businesses is deposited on a short-term basis typically with certain European central banks. For deposits placed at other European banks, exposure is mitigated by the Company placing deposits at multiple banks and managing the amounts on deposit at any bank based on institution-specific deposit limits. At September 30, 2021, the Company had an aggregate amount on deposit with European banks of approximately $10.1 billion, predominately with the Central Bank of Ireland and Bank of England.

In addition, the Company provides financing to domestic multinational corporations that generate revenue from customers in European countries, transacts with various European banks as counterparties to certain derivative-related activities, and through a subsidiary, manages money market funds that hold certain investments in European sovereign debt. Any further deterioration in economic conditions in Europe, including the potential negative impact of the United Kingdom’s withdrawal from the European Union (“Brexit”), is not expected to have a significant effect on the Company related to these activities. The Company is focused on providing continuity of services, with minimal disruption resulting from Brexit, to customers with activities in European countries. The Company has made certain structural changes to its legal entities and operations in the United Kingdom and European Union, where needed, and migrated certain business activities to the appropriate jurisdictions to continue to provide such services and generate revenue.

Off-Balance Sheet Arrangements Off-balance sheet arrangements include any contractual arrangements to which an unconsolidated entity is a party, under which the Company has an obligation to provide credit or liquidity enhancements or market risk support. In the ordinary course of business, the Company enters into an array of commitments to extend credit, letters of credit and various forms of guarantees that may be considered off-balance sheet arrangements. Refer to Note 16 of the Notes to Consolidated Financial Statements for further information on these arrangements. The Company does not utilize private label asset securitizations as a source of funding. Off-balance sheet arrangements also include any obligation related to a variable interest held in an unconsolidated entity that provides financing, liquidity, credit enhancement or market risk support. Refer to Note 6 of the Notes to Consolidated Financial Statements for further information related to the Company’s interests in variable interest entities.

28 U.S. Bancorp

 Table 10    Regulatory Capital Ratios

(Dollars in Millions)	September 30, 2021			December 31, 2020
Basel III standardized approach:
Common equity tier 1 capital	$	41,014		$	38,045
Tier 1 capital		47,426			44,474
Total risk-based capital		54,178			52,602
Risk-weighted assets		404,021			393,648
Common equity tier 1 capital as a percent of risk-weighted assets		10.2	%		9.7	%
Tier 1 capital as a percent of risk-weighted assets		11.7			11.3
Total risk-based capital as a percent of risk-weighted assets		13.4			13.4
Tier 1 capital as a percent of adjusted quarterly average assets (leverage ratio)		8.7			8.3
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure (total leverage exposure ratio)		7.0			7.3

Capital Management The Company is committed to managing capital to maintain strong protection for depositors and creditors and for maximum shareholder benefit. The Company also manages its capital to exceed regulatory capital requirements for banking organizations. The regulatory capital requirements effective for the Company follow Basel III, with the Company being subject to calculating its capital adequacy as a percentage of risk-weighted assets under the standardized approach. Beginning in 2020, the Company elected to adopt a rule issued in 2020 by its regulators which permits banking organizations who adopt accounting guidance related to the impairment of financial instruments based on the current expected credit losses (“CECL”) methodology during 2020, the option to defer the impact of the effect of that guidance at adoption plus 25 percent of its quarterly credit reserve increases over the next two years on its regulatory capital requirements, followed by a three-year transition period to phase in the cumulative deferred impact. Table 10 provides a summary of statutory regulatory capital ratios in effect for the Company at September 30, 2021 and December 31, 2020. All regulatory ratios exceeded regulatory “well-capitalized” requirements.

The Company believes certain other capital ratios are useful in evaluating its capital adequacy. The Company’s tangible common equity, as a percent of tangible assets and as a percent of risk-weighted assets determined in accordance with transitional regulatory capital requirements related to the CECL methodology under the standardized approach, was 6.8 percent and 9.4 percent, respectively, at September 30, 2021, compared with 6.9 percent and 9.5 percent, respectively, at December 31, 2020. In addition, the Company’s common equity tier 1 capital to risk-weighted assets ratio, reflecting the full implementation of the CECL methodology was 9.7 percent at September 30, 2021, compared with 9.3 percent at December 31, 2020. Refer to “Non-GAAP Financial Measures” beginning on page 35 for further information on these other capital ratios.

Total U.S. Bancorp shareholders’ equity was $53.7 billion at September 30, 2021, compared with $53.1 billion at December 31, 2020. The increase was primarily the result of corporate earnings, partially offset by changes in unrealized gains and losses on available-for-sale investment securities included in other comprehensive income (loss), dividends and common share repurchases.

Beginning in March of 2020 and continuing through the remainder of 2020, the Company suspended all common stock repurchases except for those done exclusively in connection with its stock-based compensation programs. This action was initially taken to maintain strong capital levels given the impact and uncertainties of COVID-19 on the economy and global markets. Due to continued economic uncertainty, the Federal Reserve Board implemented measures beginning in the third quarter of 2020 and extending through the second quarter of 2021, restricting capital distributions of all large bank holding companies, including the Company. These restrictions limited the aggregate amount of common stock dividends and share repurchases to an amount that did not exceed the average net income of the four preceding calendar quarters. Based on the results of the December 2020 Federal Reserve Board Stress Test, the Company announced on December 22, 2020 that its Board of Directors had approved an authorization to repurchase up to $3.0 billion of its common stock beginning January 1, 2021, and repurchased $1.5 billion of its common stock during the first six months of 2021 under this program. The Company suspended all common stock repurchases at the beginning of the third quarter of 2021, except for those done exclusively in connection with its stock-based compensation programs, due to its recently announced acquisition of MUFG Union Bank’s core regional banking franchise. The Company does not expect to commence repurchasing its common stock again until the second half of 2022, or after the acquisition closes in order to build capital prior to the acquisition.

U.S. Bancorp 29

The following table provides a detailed analysis of all shares purchased by the Company or any affiliated purchaser during the third quarter of 2021:

Period	Total Number of Shares Purchased			Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Program (a)		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (In Millions)
July		80,295	(b)	$	58.05		5,295	$	1,463
August		368			55.50		368		1,463
September		428			55.91		428		1,463
Total		81,091	(b)	$	58.03		6,091	$	1,463

(a) All shares were purchased under the $3.0 billion common stock repurchase authorization program announced December 22, 2020.

(b) Includes 75,000 shares of common stock purchased, at an average price per share of $58.15, in open-market transactions by U.S. Bank National Association, the Company’s banking subsidiary, in its capacity as trustee of the U.S. Bank 401(k) Savings Plan, which is the Company’s employee retirement savings plan.

Based on the results of the 2021 Federal Reserve Board Annual Stress Test, the Company announced on September 14, 2021 that its Board of Directors had approved a regular quarterly dividend of $0.46 per common share, payable in October 2021. This represented a 9.5 percent increase over the previous dividend rate per common share of $0.42 per quarter.

The Company will continue to monitor its capital position and may adjust its capital distributions based on economic conditions and its financial performance. Capital distributions, including dividends and stock repurchases, are subject to the approval of the Company’s Board of Directors and will align with regulatory requirements.

Refer to “Management’s Discussion and Analysis — Capital Management” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, for further discussion on capital management.

LINE OF BUSINESS FINANCIAL REVIEW

The Company’s major lines of business are Corporate and Commercial Banking, Consumer and Business Banking, Wealth Management and Investment Services, Payment Services, and Treasury and Corporate Support. 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.

Basis for Financial Presentation Business line 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. Refer to Note 17 of the Notes to Consolidated Financial Statements for further information on the business lines’ basis for financial presentation.

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.

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. Corporate and Commercial Banking contributed $403 million of the Company’s net income in the third quarter and $1.3 billion in the first nine months of 2021, or a decrease of $44 million (9.8 percent) and an increase of $61 million (5.0 percent), respectively, compared with the same periods of 2020.

Net revenue decreased $149 million (13.3 percent) in the third quarter and $564 million (16.0 percent) in the first nine months of 2021, compared with the same periods of 2020. Net interest income, on a taxable-equivalent basis, decreased $135 million (15.8 percent) in the third quarter and $451 million (17.2 percent) in the first nine months of 2021, compared with the same periods of 2020. The decreases were primarily due to lower average loan and deposit balances as well as the impact of declining interest rates on the margin benefit from deposits, partially offset by favorable deposit mix with higher noninterest-bearing deposit balances and slightly higher loan spreads. Average loan balances declined as significant liquidity draws during the early stages of the pandemic were paid down in the second half of 2020 and the first quarter of 2021. Noninterest income decreased $14 million (5.2 percent) in the third quarter and $113 million (12.6 percent) in the first nine months of 2021, compared with the same periods of 2020, primarily driven by lower capital markets activities and trading revenue, partially offset by continued stronger treasury management fees due to core growth driven by the economic recovery.

Noninterest expense decreased $10 million (2.3 percent) in the third quarter and $53 million (4.0 percent) in the first nine months of 2021, compared with the same periods of 2020, primarily due to lower FDIC insurance expense, lower production incentives, and higher capitalized loan costs, partially offset by an increase in net shared services expense driven by investment in infrastructure and technology development.

30 U.S. Bancorp

The provision for credit losses decreased $80 million (84.2 percent) in the third quarter and $592 million in the first nine months of 2021, compared with the same periods of 2020, primarily due to a decrease in the reserve allocation driven by improving portfolio credit quality in the current year, compared with deteriorating credit quality in the prior year.

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. Consumer and Business Banking contributed $628 million of the Company’s net income in the third quarter and $1.8 billion in the first nine months of 2021, or a decrease of $21 million (3.2 percent) and an increase of $86 million (4.9 percent), respectively, compared with the same periods of 2020.

Net revenue decreased $56 million (2.4 percent) in the third quarter and $151 million (2.3 percent) in the first nine months of 2021, compared with the same periods of 2020. Net interest income, on a taxable-equivalent basis, increased $77 million (5.2 percent) in the third quarter and $364 million (8.6 percent) in the first nine months of 2021, compared with the same periods of 2020, reflecting continued strong growth in deposit balances as well as favorable deposit mix, favorable loan spreads driven by growth in installment loans, and higher loan fees driven by loan forgiveness related to the SBA’s Paycheck Protection Program. These increases in net interest income were partially offset by lower deposit spreads. Noninterest income decreased $133 million (15.7 percent) in the third quarter of 2021, compared with the third quarter of 2020, primarily due to lower mortgage banking revenue reflecting lower production volume and related gain on sale margins as refinancing activities declined, partially offset by an increase in the fair value of MSRs, net of hedging activities, as well as higher gains on GNMA loan sales. Partially offsetting the decline in mortgage banking revenue, retail product fees were stronger driven by retail leasing end of term residual gains, and deposit service charges increased as a result of customer activity and higher ATM processing revenue. Noninterest income decreased $515 million (21.2 percent) in the first nine months of 2021, compared with the first nine months of 2020, primarily due to lower mortgage banking revenue reflecting lower production volume and related gain on sale margins, along with a reduction in the fair value of MSRs, net of hedging activities, partially offset by higher gains on GNMA loan sales and higher retail product fees.

Noninterest expense increased $66 million (4.8 percent) in the third quarter and $146 million (3.6 percent) in the first nine months of 2021, compared with the same periods of 2020, primarily due to increases in net shared services expense due to investments in digital capabilities and higher compensation expense related to merit increases, business hiring related to mortgage forbearance loss mitigation and revenue-related compensation driven by business production. The provision for credit losses decreased $94 million in the third quarter and $412 million in the first nine months of 2021, compared with the same periods of 2020, due to a decrease in the reserve allocation primarily reflecting lower delinquency rates in consumer portfolios and a reduction in end of period outstanding loan balances in the first nine months of 2021, compared with loan growth in the first nine months of 2020.

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. Wealth Management and Investment Services contributed $196 million of the Company’s net income in the third quarter and $618 million in the first nine months of 2021, or decreases of $31 million (13.7 percent) and $119 million (16.1 percent), respectively, compared with the same periods of 2020.

Net revenue decreased $23 million (2.9 percent) in the third quarter and $112 million (4.5 percent) in the first nine months of 2021, compared with the same periods of 2020. Net interest income, on a taxable-equivalent basis, decreased $76 million (25.2 percent) in the third quarter and $243 million (25.2 percent) in the first nine months of 2021, compared with the same periods of 2020, primarily due to the declining margin benefit from deposits given lower interest rates, partially offset by higher noninterest-bearing deposit balances, favorable deposit mix and higher average loan balances. Noninterest income increased $53 million (10.5 percent) in the third quarter and $131 million (8.7 percent) in the first nine months of 2021, compared with the same periods of 2020, primarily due to core business growth in trust and investment management fees and investment products fees, both driven by favorable market conditions, partially offset by higher fee waivers related to money market funds.

U.S. Bancorp 31

 Table 11    Line of Business Financial Performance

	Corporate and Commercial Banking							Consumer and Business Banking
Three Months Ended September 30 (Dollars in Millions)	2021		2020		Percent Change			2021			2020		Percent Change
Condensed Income Statement
Net interest income (taxable-equivalent basis)	$	717	$	852		(15.8	)%	$	1,551		$	1,474		5.2	%
Noninterest income		253		267		(5.2	)		715			848		(15.7	)
Total net revenue		970		1,119		(13.3	)		2,266			2,322		(2.4	)
Noninterest expense		418		428		(2.3	)		1,450			1,383		4.8
Other intangibles		—		—		—			3			4		(25.0	)
Total noninterest expense		418		428		(2.3	)		1,453			1,387		4.8
Income (loss) before provision and income taxes		552		691		(20.1	)		813			935		(13.0	)
Provision for credit losses		15		95		(84.2	)		(25	)		69		*
Income (loss) before income taxes		537		596		(9.9	)		838			866		(3.2	)
Income taxes and taxable-equivalent adjustment		134		149		(10.1	)		210			217		(3.2	)
Net income (loss)		403		447		(9.8	)		628			649		(3.2	)
Net (income) loss attributable to noncontrolling interests		—		—		—			—			—		—
Net income (loss) attributable to U.S. Bancorp	$	403	$	447		(9.8	)	$	628		$	649		(3.2	)
Average Balance Sheet
Commercial	$	77,474	$	89,435		(13.4	)%	$	8,158		$	11,173		(27.0	)%
Commercial real estate		24,916		26,083		(4.5	)		10,975			11,916		(7.9	)
Residential mortgages		29		19		52.6			66,787			69,945		(4.5	)
Credit card		—		—		—			—			—		—
Other retail		12		10		20.0			54,913			52,195		5.2
Total loans		102,431		115,547		(11.4	)		140,833			145,229		(3.0	)
Goodwill		1,650		1,647		.2			3,506			3,475		.9
Other intangible assets		5		6		(16.7	)		2,754			1,942		41.8
Assets		114,629		128,369		(10.7	)		160,882			164,246		(2.0	)
Noninterest-bearing deposits		62,642		48,058		30.3			34,416			34,288		.4
Interest checking		12,843		12,673		1.3			70,953			57,593		23.2
Savings products		47,073		56,945		(17.3	)		76,367			63,577		20.1
Time deposits		9,001		17,940		(49.8	)		12,951			11,925		8.6
Total deposits		131,559		135,616		(3.0	)		194,687			167,383		16.3
Total U.S. Bancorp shareholders’ equity		13,772		15,051		(8.5	)		12,277			13,562		(9.5	)

	Corporate and Commercial Banking								Consumer and Business Banking
Nine Months Ended September 30 (Dollars in Millions)	2021			2020		Percent Change			2021			2020		Percent Change
Condensed Income Statement
Net interest income (taxable-equivalent basis)	$	2,172		$	2,623		(17.2	)%	$	4,603		$	4,239		8.6	%
Noninterest income		786			899		(12.6	)		1,918			2,433		(21.2	)
Total net revenue		2,958			3,522		(16.0	)		6,521			6,672		(2.3	)
Noninterest expense		1,257			1,310		(4.0	)		4,210			4,061		3.7
Other intangibles		—			—		—			9			12		(25.0	)
Total noninterest expense		1,257			1,310		(4.0	)		4,219			4,073		3.6
Income (loss) before provision and income taxes		1,701			2,212		(23.1	)		2,302			2,599		(11.4	)
Provision for credit losses		(20	)		572		*			(143	)		269		*
Income (loss) before income taxes		1,721			1,640		4.9			2,445			2,330		4.9
Income taxes and taxable-equivalent adjustment		430			410		4.9			612			583		5.0
Net income (loss)		1,291			1,230		5.0			1,833			1,747		4.9
Net (income) loss attributable to noncontrolling interests		—			—		—			—			—		—
Net income (loss) attributable to U.S. Bancorp	$	1,291		$	1,230		5.0		$	1,833		$	1,747		4.9
Average Balance Sheet
Commercial	$	77,339		$	92,959		(16.8	)%	$	9,447		$	8,601		9.8	%
Commercial real estate		24,744			25,696		(3.7	)		11,009			12,166		(9.5	)
Residential mortgages		23			20		15.0			67,301			67,093		.3
Credit card		—			—		—			—			—		—
Other retail		11			11		—			53,463			52,121		2.6
Total loans		102,117			118,686		(14.0	)		141,220			139,981		.9
Goodwill		1,648			1,647		.1			3,485			3,508		(.7	)
Other intangible assets		5			6		(16.7	)		2,692			2,095		28.5
Assets		114,182			131,106		(12.9	)		162,316			157,177		3.3
Noninterest-bearing deposits		59,841			41,091		45.6			33,734			29,397		14.8
Interest checking		13,246			14,266		(7.1	)		68,596			53,815		27.5
Savings products		47,576			55,451		(14.2	)		74,542			60,404		23.4
Time deposits		9,177			20,864		(56.0	)		13,683			12,715		7.6
Total deposits		129,840			131,672		(1.4	)		190,555			156,331		21.9
Total U.S. Bancorp shareholders’ equity		13,995			15,201		(7.9	)		12,378			12,797		(3.3	)

* Not meaningful

32 U.S. Bancorp

Wealth Management and Investment Services							Payment Services							Treasury and Corporate Support									Consolidated Company
2021		2020		Percent Change			2021		2020		Percent Change			2021			2020			Percent Change			2021			2020			Percent Change
$	225	$	301		(25.2	)%	$	616	$	643		(4.2	)%	$	88		$	(18	)		*	%	$	3,197		$	3,252			(1.7	)%
	558		505		10.5			946		867		9.1			221			225			(1.8	)		2,693			2,712			(.7	)
	783		806		(2.9	)		1,562		1,510		3.4			309			207			49.3			5,890			5,964			(1.2	)
	507		489		3.7			817		797		2.5			196			230			(14.8	)		3,388			3,327			1.8
	4		3		33.3			34		37		(8.1	)		—			—			—			41			44			(6.8	)
	511		492		3.9			851		834		2.0			196			230			(14.8	)		3,429			3,371			1.7
	272		314		(13.4	)		711		676		5.2			113			(23	)		*			2,461			2,593			(5.1	)
	11		11		—			166		246		(32.5	)		(330	)		214			*			(163	)		635			*
	261		303		(13.9	)		545		430		26.7			443			(237	)		*			2,624			1,958			34.0
	65		76		(14.5	)		136		108		25.9			45			(178	)		*			590			372			58.6
	196		227		(13.7	)		409		322		27.0			398			(59	)		*			2,034			1,586			28.2
	—		—		—			—		—		—			(6	)		(6	)		—			(6	)		(6	)		—
$	196	$	227		(13.7	)	$	409	$	322		27.0		$	392		$	(65	)		*		$	2,028		$	1,580			28.4
$	5,551	$	4,721		17.6	%	$	9,271	$	8,859		4.7	%	$	1,378		$	1,301			5.9	%	$	101,832		$	115,489			(11.8	)%
	767		776		(1.2	)		—		—		—			2,263			2,154			5.1			38,921			40,929			(4.9	)
	7,286		5,819		25.2			—		—		—			2			3			(33.3	)		74,104			75,786			(2.2	)
	—		—		—			21,905		22,052		(.7	)		—			—			—			21,905			22,052			(.7	)
	4,850		4,300		12.8			202		257		(21.4	)		—			—			—			59,977			56,762			5.7
	18,454		15,616		18.2			31,378		31,168		.7			3,643			3,458			5.3			296,739			311,018			(4.6	)
	1,618		1,618		—			3,168		3,123		1.4			—			—			—			9,942			9,863			.8
	80		37		*			496		602		(17.6	)		—			—			—			3,335			2,587			28.9
	21,566		18,708		15.3			37,173		36,191		2.7			219,196			189,388			15.7			553,446			536,902			3.1
	24,453		17,719		38.0			4,913		6,886		(28.7	)		2,594			2,424			7.0			129,018			109,375			18.0
	18,784		14,041		33.8			—		—		—			456			187			*			103,036			84,494			21.9
	51,564		56,245		(8.3	)		150		123		22.0			776			724			7.2			175,930			177,614			(.9	)
	1,493		3,571		(58.2	)		—		1		*			58			603			(90.4	)		23,503			34,040			(31.0	)
	96,294		91,576		5.2			5,063		7,010		(27.8	)		3,884			3,938			(1.4	)		431,487			405,523			6.4
	3,172		2,968		6.9			7,561		7,716		(2.0	)		17,491			13,119			33.3			54,273			52,416			3.5

Wealth Management and Investment Services							Payment Services							Treasury and Corporate Support									Consolidated Company
2021		2020		Percent Change			2021		2020		Percent Change			2021			2020			Percent Change			2021			2020			Percent Change
$	721	$	964		(25.2	)%	$	1,841	$	1,910		(3.6	)%	$	113		$	(13	)		*	%	$	9,450		$	9,723			(2.8	)%
	1,638		1,507		8.7			2,644		2,319		14.0			707			693			2.0			7,693			7,851			(2.0	)
	2,359		2,471		(4.5	)		4,485		4,229		6.1			820			680			20.6			17,143			17,574			(2.5	)
	1,499		1,445		3.7			2,381		2,296		3.7			729			764			(4.6	)		10,076			9,876			2.0
	10		9		11.1			100		108		(7.4	)		—			—			—			119			129			(7.8	)
	1,509		1,454		3.8			2,481		2,404		3.2			729			764			(4.6	)		10,195			10,005			1.9
	850		1,017		(16.4	)		2,004		1,825		9.8			91			(84	)		*			6,948			7,569			(8.2	)
	26		34		(23.5	)		216		477		(54.7	)		(1,239	)		2,013			*			(1,160	)		3,365			*
	824		983		(16.2	)		1,788		1,348		32.6			1,330			(2,097	)		*			8,108			4,204			92.9
	206		246		(16.3	)		447		338		32.2			106			(833	)		*			1,801			744			*
	618		737		(16.1	)		1,341		1,010		32.8			1,224			(1,264	)		*			6,307			3,460			82.3
	—		—		—			—		—		—			(17	)		(20	)		15.0			(17	)		(20	)		15.0
$	618	$	737		(16.1	)	$	1,341	$	1,010		32.8		$	1,207		$	(1,284	)		*		$	6,290		$	3,440			82.8
$	5,315	$	4,676		13.7	%	$	8,752	$	8,977		(2.5	)%	$	1,445		$	1,288			12.2	%	$	102,298		$	116,501			(12.2	)%
	711		736		(3.4	)		—		—		—			2,293			2,101			9.1			38,757			40,699			(4.8	)
	6,889		5,496		25.3			—		—		—			2			3			(33.3	)		74,215			72,612			2.2
	—		—		—			21,391		22,465		(4.8	)		—			—			—			21,391			22,465			(4.8	)
	4,669		4,243		10.0			210		283		(25.8	)		—			—			—			58,353			56,658			3.0
	17,584		15,151		16.1			30,353		31,725		(4.3	)		3,740			3,392			10.3			295,014			308,935			(4.5	)
	1,618		1,617		.1			3,174		3,027		4.9			—			—			—			9,925			9,799			1.3
	69		40		72.5			519		584		(11.1	)		—			—			—			3,285			2,725			20.6
	20,676		18,324		12.8			35,972		36,497		(1.4	)		218,053			182,276			19.6			551,199			525,380			4.9
	23,024		16,285		41.4			5,068		3,852		31.6			2,595			2,310			12.3			124,262			92,935			33.7
	18,885		13,584		39.0			—		—		—			553			225			*			101,280			81,890			23.7
	55,375		59,442		(6.8	)		141		117		20.5			796			770			3.4			178,430			176,184			1.3
	1,838		3,710		(50.5	)		—		2		*			369			2,298			(83.9	)		25,067			39,589			(36.7	)
	99,122		93,021		6.6			5,209		3,971		31.2			4,313			5,603			(23.0	)		429,039			390,598			9.8
	3,099		2,924		6.0			7,544		7,269		3.8			16,311			13,745			18.7			53,327			51,936			2.7

U.S. Bancorp 33

Noninterest expense increased $19 million (3.9 percent) in the third quarter and $55 million (3.8 percent) in the first nine months of 2021, compared with the same periods of 2020, reflecting higher compensation expense as a result of merit increases, higher performance-based incentives related to investment sales volumes and core business growth, and an increase in net shared services expense, partially offset by lower other noninterest expense due to the allocation to the business line of previously reserved legal matters in the third quarter of 2020. The provision for credit losses was flat in the third quarter of 2021, compared with the third quarter of 2020, reflecting stable credit quality in the current quarter, compared with credit quality deterioration in the third quarter of 2020, offset by stronger balance growth in the current period compared with the third quarter of 2021. The provision for credit losses decreased $8 million (23.5 percent) in the first nine months of 2021, compared with the first nine months of 2020, reflecting a decrease in the reserve allocation in the first quarter of 2021 driven by stable credit quality.

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. Payment Services contributed $409 million of the Company’s net income in the third quarter and $1.3 billion in the first nine months of 2021, or increases of $87 million (27.0 percent) and $331 million (32.8 percent), respectively, compared with the same periods of 2020.

Net revenue increased $52 million (3.4 percent) in the third quarter and $256 million (6.1 percent) in the first nine months of 2021, compared with the same periods of 2020. Net interest income, on a taxable-equivalent basis, decreased $27 million (4.2 percent) in the third quarter and $69 million (3.6 percent) in the first nine months of 2021, compared with the same periods of 2020, primarily due to loan mix and lower loan balances resulting from higher credit card payment rates by customers. Net interest income further decreased in the third quarter of 2021, compared with the third quarter of 2020, due to slightly lower loan yields and lower deposit balances driven by lower prepaid card processing activities as government stimulus dissipated. Noninterest income increased $79 million (9.1 percent) in the third quarter and $325 million (14.0 percent) in the first nine months of 2021, compared with the same periods of 2020, mainly due to continued strengthening of consumer and business spending across most sectors driven by government stimulus, local jurisdictions reducing restrictions and consumer behaviors normalizing. As a result, there was strong growth in merchant processing services revenue driven by increased sales volume and higher merchant fees and equipment income, partially offset by higher rebates. There was also solid growth in corporate payment products revenue driven by improving business spending across all product groups. Credit and debit card revenue increased, driven by higher net interchange revenue related to sales volume. The increase in credit and debit card revenue in the third quarter of 2021, compared with the third quarter of 2020, was mostly offset by lower prepaid card processing activities as government stimulus programs dissipated.

Noninterest expense increased $17 million (2.0 percent) in the third quarter of 2021, compared with the third quarter of 2020, reflecting the timing of marketing campaigns and higher net shared services expense, partially offset by higher incremental costs related to the prepaid card business in the third quarter of 2020. Noninterest expense increased $77 million (3.2 percent) in the first nine months of 2021, compared with the first nine months of 2020, due to incremental costs related to the prepaid card business in the first six months of 2021 and lower marketing costs during 2020. The provision for credit losses decreased $80 million (32.5 percent) in the third quarter and $261 million (54.7 percent) in the first nine months of 2021, compared with the same periods of 2020, primarily driven by improved credit quality relative to the prior year.

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 the business lines, 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. Treasury and Corporate Support recorded net income of $392 million in the third quarter and $1.2 billion in the first nine months of 2021, compared with net losses of $65 million and $1.3 billion in the same periods of 2020, respectively.

Net revenue increased $102 million (49.3 percent) in the third quarter and $140 million (20.6 percent) in the first nine months of 2021, compared with the same periods of 2020. Net interest income, on a taxable-equivalent basis, increased $106 million in the third quarter of 2021, compared with the third quarter of 2020, primarily due to favorable funding and deposit mix and lower premium amortization within the investment portfolio compared with the prior year. Net interest income, on a taxable-equivalent basis, increased $126 million in the first nine months of 2021, compared with the first nine months of 2020, due to favorable

34 U.S. Bancorp

funding and deposit mix, partially offset by higher premium amortization within the investment portfolio compared with the prior year. Noninterest income decreased $4 million (1.8 percent) in the third quarter and increased $14 million (2.0 percent) in the first nine months of 2021, compared with the same periods of 2020, reflecting changes in other noninterest income driven by lower equity investment income in 2021, offset by the impact of asset impairments in 2020 as a result of branch closures. The increase in noninterest income in the first nine months of 2021, compared with the first nine months of 2020, was further offset by lower gains on sales of businesses in 2021 and lower securities gains.

Noninterest expense decreased $34 million (14.8 percent) in the third quarter and $35 million (4.6 percent) in the first nine months of 2021, compared with the same periods of 2020, primarily due to lower COVID-19 related expenses compared with the prior year, including recognizing liabilities related to future delivery exposures for merchant and airline processing, lower net shared services expense and lower amortization related to tax-advantaged investments which were scaled back in 2020 during the pandemic. These decreases were partially offset by higher compensation expense as a result of merit increases and higher performance-based incentives. The provision for credit losses decreased $544 million in the third quarter and $3.3 billion in the first nine months of 2021, compared with the same periods of 2020, reflecting the residual impact of changes in the allowance for credit losses being impacted by improving economic conditions in the current year, compared to deteriorating conditions in the prior year.

Income taxes are assessed to each line of business at a managerial tax rate of 25.0 percent with the residual tax expense or benefit to arrive at the consolidated effective tax rate included in Treasury and Corporate Support.

NON-GAAP FINANCIAL MEASURES

In addition to capital ratios defined by banking regulators, the Company considers various other measures when evaluating capital utilization and adequacy, including:

• Tangible common equity to tangible assets,

• Tangible common equity to risk-weighted assets, and

• Common equity tier 1 capital to risk-weighted assets, reflecting the full implementation of the CECL methodology.

These capital measures are viewed by management as useful additional methods of evaluating the Company’s utilization of its capital held and the level of capital available to withstand unexpected negative market or economic conditions. Additionally, presentation of these measures allows investors, analysts and banking regulators to assess the Company’s capital position relative to other financial services companies. These capital measures are not defined in generally accepted accounting principles (“GAAP”), or are not currently effective or defined in banking regulations. In addition, certain of these measures differ from currently effective capital ratios defined by banking regulations principally in that the currently effective ratios, which are subject to certain transitional provisions, temporarily exclude the impact of the 2020 adoption of accounting guidance related to impairment of financial instruments based on the CECL methodology. As a result, these capital measures disclosed by the Company may be considered non-GAAP financial measures. Management believes this information helps investors assess trends in the Company’s capital adequacy.

The Company also discloses net interest income and related ratios and analysis on a taxable-equivalent basis, which may also be considered non-GAAP financial measures. The Company believes this presentation to be the preferred industry measurement of net interest income as it provides a relevant comparison of net interest income arising from taxable and tax-exempt sources. In addition, certain performance measures, including the efficiency ratio and net interest margin utilize net interest income on a taxable-equivalent basis.

There may be limits in the usefulness of these measures to investors. As a result, the Company encourages readers to consider the consolidated financial statements and other financial information contained in this report in their entirety, and not to rely on any single financial measure.

U.S. Bancorp 35

The following table shows the Company’s calculation of these non-GAAP financial measures:

(Dollars in Millions)	September 30, 2021			December 31, 2020
Total equity	$	54,378		$	53,725
Preferred stock		(5,968	)		(5,983	)
Noncontrolling interests		(635	)		(630	)
Goodwill (net of deferred tax liability) (1)		(9,063	)		(9,014	)
Intangible assets, other than mortgage servicing rights		(618	)		(654	)
Tangible common equity (a)		38,094			37,444
Common equity tier 1 capital, determined in accordance with transitional regulatory capital requirements related to the CECL methodology implementation		41,014			38,045
Adjustments (2)		(1,733	)		(1,733	)
Common equity tier 1 capital, reflecting the full implementation of the CECL methodology (b)		39,281			36,312
Total assets		567,495			553,905
Goodwill (net of deferred tax liability) (1)		(9,063	)		(9,014	)
Intangible assets, other than mortgage servicing rights		(618	)		(654	)
Tangible assets (c)		557,814			544,237
Risk-weighted assets, determined in accordance with prescribed regulatory capital requirements effective for the Company (d)		404,021			393,648
Adjustments (3)		(684	)		(1,471	)
Risk-weighted assets, reflecting the full implementation of the CECL methodology (e)		403,337			392,177
Ratios
Tangible common equity to tangible assets (a)/(c)		6.8	%		6.9	%
Tangible common equity to risk-weighted assets (a)/(d)		9.4			9.5
Common equity tier 1 capital to risk-weighted assets, reflecting the full implementation of the CECL methodology (b)/(e)		9.7			9.3

	Three Months Ended September 30						Nine Months Ended September 30
	2021			2020			2021			2020
Net interest income	$	3,171		$	3,227		$	9,371		$	9,650
Taxable-equivalent adjustment (4)		26			25			79			73
Net interest income, on a taxable-equivalent basis		3,197			3,252			9,450			9,723
Net interest income, on a taxable-equivalent basis (as calculated above)		3,197			3,252			9,450			9,723
Noninterest income		2,693			2,712			7,693			7,851
Less: Securities gains (losses), net		20			12			88			143
Total net revenue, excluding net securities gains (losses) (f)		5,870			5,952			17,055			17,431
Noninterest expense (g)		3,429			3,371			10,195			10,005
Efficiency ratio (g)/(f)		58.4	%		56.6	%		59.8	%		57.4	%

(1) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements.    

(2) Includes the estimated increase in the allowance for credit losses related to the adoption of the CECL methodology net of deferred taxes.    

(3) Includes the impact of the estimated increase in the allowance for credit losses related to the adoption of the CECL methodology.    

(4) Based on a federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes.    

CRITICAL ACCOUNTING POLICIES

The accounting and reporting policies of the Company comply with accounting principles generally accepted in the United States and conform to general practices within the banking industry. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. The Company’s financial position and results of operations can be affected by these estimates and assumptions, which are integral to understanding the Company’s financial statements. Critical accounting policies are those policies management believes are the most important to the portrayal of the Company’s financial condition and results, and require management to make estimates that are difficult, subjective or complex. Most accounting policies are not considered by management to be critical accounting policies. Management has discussed the development and the selection of critical accounting policies with the Company’s Audit Committee. Those policies considered to be critical accounting policies relate to the allowance for credit losses, fair value estimates, MSRs, and income taxes. These accounting policies are discussed in detail in “Management’s Discussion and Analysis — Critical Accounting Policies” and the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

CONTROLS AND PROCEDURES

Under the supervision and with the participation of the Company’s management, including its principal executive officer and principal financial officer, the Company has evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based upon this evaluation, the principal executive officer and principal financial officer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective.

During the most recently completed fiscal quarter, there was no change made in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

36 U.S. Bancorp

U.S. Bancorp

Consolidated Balance Sheet

(Dollars in Millions)	September 30, 2021			December 31, 2020
	(Unaudited)
Assets
Cash and due from banks	$	63,904		$	62,580
Available-for-sale investment securities ($850 and $402 pledged as collateral, respectively) (a)		149,376			136,840
Loans held for sale (including $6,176 and $8,524 of mortgage loans carried at fair value, respectively)		6,191			8,761
Loans
Commercial		101,013			102,871
Commercial real estate		38,808			39,311
Residential mortgages		74,954			76,155
Credit card		22,137			22,346
Other retail		60,696			57,024
Total loans		297,608			297,707
Less allowance for loan losses		(5,792	)		(7,314	)
Net loans		291,816			290,393
Premises and equipment		3,262			3,468
Goodwill		9,996			9,918
Other intangible assets		3,528			2,864
Other assets (including $1,426 and $1,255 of trading securities at fair value pledged as collateral, respectively) (a)		39,422			39,081
Total assets	$	567,495		$	553,905
Liabilities and Shareholders’ Equity
Deposits
Noninterest-bearing	$	135,549		$	118,089
Interest-bearing (b)		307,353			311,681
Total deposits		442,902			429,770
Short-term borrowings		16,088			11,766
Long-term debt		35,671			41,297
Other liabilities		18,456			17,347
Total liabilities		513,117			500,180
Shareholders’ equity
Preferred stock		5,968			5,983
Common stock, par value $0.01 a share—authorized: 4,000,000,000 shares; issued: 9/30/21 and 12/31/20— 2,125,725,742 shares		21			21
Capital surplus		8,550			8,511
Retained earnings		68,297			64,188
Less cost of common stock in treasury: 9/30/21—643,035,053 shares; 12/31/20—618,618,084 shares		(27,301	)		(25,930	)
Accumulated other comprehensive income (loss)		(1,792	)		322
Total U.S. Bancorp shareholders’ equity		53,743			53,095
Noncontrolling interests		635			630
Total equity		54,378			53,725
Total liabilities and equity	$	567,495		$	553,905

(a) Includes only collateral pledged by the Company where counterparties have the right to sell or pledge the collateral.

(b) lncludes time deposits greater than $250,000 balances of $2.4 billion and $4.4 billion at September 30, 2021 and December 31, 2020, respectively.

See Notes to Consolidated Financial Statements.

U.S. Bancorp 37

U.S. Bancorp

Consolidated Statement of Income

(Dollars and Shares in Millions, Except Per Share Data) (Unaudited)	Three Months Ended September 30						Nine Months Ended September 30
	2021			2020			2021			2020
Interest Income
Loans	$	2,711		$	2,892		$	8,112		$	9,152
Loans held for sale		54			61			176			157
Investment securities		606			586			1,741			1,908
Other interest income		38			34			103			144
Total interest income		3,409			3,573			10,132			11,361
Interest Expense
Deposits		78			130			245			849
Short-term borrowings		18			19			52			124
Long-term debt		142			197			464			738
Total interest expense		238			346			761			1,711
Net interest income		3,171			3,227			9,371			9,650
Provision for credit losses		(163	)		635			(1,160	)		3,365
Net interest income after provision for credit losses		3,334			2,592			10,531			6,285
Noninterest Income
Credit and debit card revenue		393			388			1,125			976
Corporate payment products revenue		156			125			420			371
Merchant processing services		392			347			1,084			950
Trust and investment management fees		459			434			1,349			1,295
Deposit service charges		194			170			531			512
Treasury management fees		155			145			462			425
Commercial products revenue		277			303			837			904
Mortgage banking revenue		418			553			1,063			1,596
Investment products fees		62			48			177			142
Securities gains (losses), net		20			12			88			143
Other		167			187			557			537
Total noninterest income		2,693			2,712			7,693			7,851
Noninterest Expense
Compensation		1,847			1,687			5,448			4,992
Employee benefits		336			335			1,057			1,001
Net occupancy and equipment		259			276			780			823
Professional services		126			102			332			307
Marketing and business development		99			72			237			213
Technology and communications		361			334			1,082			932
Postage, printing and supplies		69			70			203			214
Other intangibles		41			44			119			129
Other		291			451			937			1,394
Total noninterest expense		3,429			3,371			10,195			10,005
Income before income taxes		2,598			1,933			8,029			4,131
Applicable income taxes		564			347			1,722			671
Net income		2,034			1,586			6,307			3,460
Net (income) loss attributable to noncontrolling interests		(6	)		(6	)		(17	)		(20	)
Net income attributable to U.S. Bancorp	$	2,028		$	1,580		$	6,290		$	3,440
Net income applicable to U.S. Bancorp common shareholders	$	1,934		$	1,494		$	6,023		$	3,196
Earnings per common share	$	1.30		$	.99		$	4.04		$	2.12
Diluted earnings per common share	$	1.30		$	.99		$	4.04		$	2.11
Average common shares outstanding		1,483			1,506			1,491			1,510
Average diluted common shares outstanding		1,484			1,507			1,492			1,511

See Notes to Consolidated Financial Statements.

38 U.S. Bancorp

U.S. Bancorp

Consolidated Statement of Comprehensive Income

(Dollars in Millions) (Unaudited)	Three Months Ended September 30						Nine Months Ended September 30
	2021			2020			2021			2020
Net income	$	2,034		$	1,586		$	6,307		$	3,460
Other Comprehensive Income (Loss)
Changes in unrealized gains and losses on investment securities available-for-sale		(825	)		(305	)		(3,008	)		2,935
Changes in unrealized gains and losses on derivative hedges		8			27			121			(230	)
Foreign currency translation		(1	)		6			23			(6	)
Reclassification to earnings of realized gains and losses		27			23			34			(42	)
Income taxes related to other comprehensive income (loss)		201			63			716			(672	)
Total other comprehensive income (loss)		(590	)		(186	)		(2,114	)		1,985
Comprehensive income (loss)		1,444			1,400			4,193			5,445
Comprehensive (income) loss attributable to noncontrolling interests		(6	)		(6	)		(17	)		(20	)
Comprehensive income (loss) attributable to U.S. Bancorp	$	1,438		$	1,394		$	4,176		$	5,425

See Notes to Consolidated Financial Statements.

U.S. Bancorp 39

U.S. Bancorp

Consolidated Statement of Shareholders’ Equity

	U.S. Bancorp Shareholders
(Dollars and Shares in Millions, Except Per Share Data) (Unaudited)	Common Shares Outstanding			Preferred Stock			Common Stock		Capital Surplus			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total U.S. Bancorp Shareholders’ Equity			Noncontrolling Interests			Total Equity
Balance June 30, 2020		1,506		$	5,984		$	21	$	8,483		$	62,526		$	(25,962	)	$	798		$	51,850		$	630		$	52,480
Net income (loss)													1,580									1,580			6			1,586
Other comprehensive income (loss)																			(186	)		(186	)					(186	)
Preferred stock dividends (a)													(79	)								(79	)					(79	)
Common stock dividends ($.42 per share)													(636	)								(636	)					(636	)
Issuance of common and treasury stock										(1	)					3						2						2
Distributions to noncontrolling interests																						—			(5	)		(5	)
Net other changes in noncontrolling interests																						—			(1	)		(1	)
Stock option and restricted stock grants										34												34						34
Balance September 30, 2020		1,506		$	5,984		$	21	$	8,516		$	63,391		$	(25,959	)	$	612		$	52,565		$	630		$	53,195
Balance June 30, 2021		1,483		$	5,968		$	21	$	8,518		$	67,039		$	(27,305	)	$	(1,202	)	$	53,039		$	635		$	53,674
Net income (loss)													2,028									2,028			6			2,034
Other comprehensive income (loss)																			(590	)		(590	)					(590	)
Preferred stock dividends (b)													(84	)								(84	)					(84	)
Common stock dividends ($.46 per share)													(686	)								(686	)					(686	)
Issuance of common and treasury stock										(1	)					4						3						3
Distributions to noncontrolling interests																						—			(5	)		(5	)
Net other changes in noncontrolling interests																						—			(1	)		(1	)
Stock option and restricted stock grants										33												33						33
Balance September 30, 2021		1,483		$	5,968		$	21	$	8,550		$	68,297		$	(27,301	)	$	(1,792	)	$	53,743		$	635		$	54,378
Balance December 31, 2019		1,534		$	5,984		$	21	$	8,475		$	63,186		$	(24,440	)	$	(1,373	)	$	51,853		$	630		$	52,483
Change in accounting principle (c)													(1,099	)								(1,099	)					(1,099	)
Net income (loss)													3,440									3,440			20			3,460
Other comprehensive income (loss)																			1,985			1,985						1,985
Preferred stock dividends (d)													(229	)								(229	)					(229	)
Common stock dividends ($1.26 per share)													(1,907	)								(1,907	)					(1,907	)
Issuance of common and treasury stock		3								(118	)					130						12						12
Purchase of treasury stock		(31	)													(1,649	)					(1,649	)					(1,649	)
Distributions to noncontrolling interests																						—			(19	)		(19	)
Net other changes in noncontrolling interests																						—			(1	)		(1	)
Stock option and restricted stock grants										159												159						159
Balance September 30, 2020		1,506		$	5,984		$	21	$	8,516		$	63,391		$	(25,959	)	$	612		$	52,565		$	630		$	53,195
Balance December 31, 2020		1,507		$	5,983		$	21	$	8,511		$	64,188		$	(25,930	)	$	322		$	53,095		$	630		$	53,725
Net income (loss)													6,290									6,290			17			6,307
Other comprehensive income (loss)																			(2,114	)		(2,114	)					(2,114	)
Preferred stock dividends (e)													(232	)								(232	)					(232	)
Common stock dividends ($1.30 per share)													(1,944	)								(1,944	)					(1,944	)
Issuance of preferred stock					730																	730						730
Redemption of preferred stock					(745	)							(5	)								(750	)					(750	)
Issuance of common and treasury stock		4								(127	)					166						39						39
Purchase of treasury stock		(28	)													(1,537	)					(1,537	)					(1,537	)
Distributions to noncontrolling interests																						—			(16	)		(16	)
Net other changes in noncontrolling interests																						—			4			4
Stock option and restricted stock grants										166												166						166
Balance September 30, 2021		1,483		$	5,968		$	21	$	8,550		$	68,297		$	(27,301	)	($	1,792	)	$	53,743		$	635		$	54,378

(a) Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series H, Series J and Series K Non-Cumulative Perpetual Preferred Stock of $894.444, $223.61, $406.25, $321.88, $662.50 and $343.75, respectively.

(b) Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series J, Series K, Series L and Series M Non-Cumulative Perpetual Preferred Stock of $894.444, $223.611, $406.25, $662.50, $343.75, $234.375 and $250.00, respectively.

(c) Effective January 1, 2020, the Company adopted accounting guidance which changed impairment recognition of financial instruments to a model that is based on expected losses rather than incurred losses. Upon adoption, the Company increased its allowance for credit losses and reduced retained earnings net of deferred tax liabilities through a cumulative-effect adjustment.

(d) Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series H, Series I, Series J and Series K Non-Cumulative Perpetual Preferred Stock of $2,663.888, $665.97, $1,218.75, $965.64, $640.625, $1,325.00 and $1,031.25, respectively.

(e) Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series I, Series J, Series K, Series L and Series M Non-Cumulative Perpetual Preferred Stock of $2,654.166, $663.542, $1,218.75, $232.953, $1,325.00, $1,031.25, $703.125 and $702.778, respectively.

See Notes to Consolidated Financial Statements.

40 U.S. Bancorp

U.S. Bancorp

Consolidated Statement of Cash Flows

(Dollars in Millions) (Unaudited)	Nine Months Ended September 30
	2021			2020
Operating Activities
Net income attributable to U.S. Bancorp	$	6,290		$	3,440
Adjustments to reconcile net income to net cash provided by operating activities
Provision for credit losses		(1,160	)		3,365
Depreciation and amortization of premises and equipment		253			264
Amortization of intangibles		119			129
(Gain) loss on sale of loans held for sale		(950	)		(1,613	)
(Gain) loss on sale of securities and other assets		(297	)		(274	)
Loans originated for sale, net of repayments		(56,256	)		(46,456	)
Proceeds from sales of loans held for sale		58,517			45,469
Other, net		2,651			461
Net cash provided by operating activities		9,167			4,785
Investing Activities
Proceeds from sales of available-for-sale investment securities		13,383			13,920
Proceeds from maturities of available-for-sale investment securities		33,740			24,992
Purchases of available-for-sale investment securities		(62,764	)		(48,481	)
Net increase in loans outstanding		(1,157	)		(3,915	)
Proceeds from sales of loans		4,228			1,429
Purchases of loans		(3,278	)		(9,561	)
Net (increase) decrease in securities purchased under agreements to resell		(41	)		732
Other, net		120			(966	)
Net cash used in investing activities		(15,769	)		(21,850	)
Financing Activities
Net increase in deposits		13,132			51,301
Net increase (decrease) in short-term borrowings		4,322			(10,000	)
Proceeds from issuance of long-term debt		1,211			14,282
Principal payments or redemption of long-term debt		(6,603	)		(13,088	)
Proceeds from issuance of preferred stock		730			—
Proceeds from issuance of common stock		38			11
Repurchase of preferred stock		(1,250	)		—
Repurchase of common stock		(1,537	)		(1,660	)
Cash dividends paid on preferred stock		(223	)		(222	)
Cash dividends paid on common stock		(1,894	)		(1,917	)
Net cash provided by financing activities		7,926			38,707
Change in cash and due from banks		1,324			21,642
Cash and due from banks at beginning of period		62,580			22,405
Cash and due from banks at end of period	$	63,904		$	44,047

See Notes to Consolidated Financial Statements.

U.S. Bancorp 41

Notes to Consolidated Financial Statements

(Unaudited)

 Note 1    Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and notes necessary for a complete presentation of financial position, results of operations and cash flow activity required in accordance with accounting principles generally accepted in the United States. In the opinion of management of U.S. Bancorp (the “Company”), all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of results for the interim periods have been made. These financial statements and notes should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Certain amounts in prior periods have been reclassified to conform to the current presentation.

 Note 2    Accounting Changes

Reference Interest Rate Transition In March 2020, the FASB issued accounting guidance, providing temporary optional expedients and exceptions to the guidance in United States generally accepted accounting principles on contract modifications and hedge accounting, to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. Under the guidance, a company can elect not to apply certain modification accounting requirements to contracts affected by reference rate transition, if certain criteria are met. A company that makes this election would not be required to remeasure the contracts at the modification date or reassess a previous accounting determination. This guidance also permits a company to elect various optional expedients that would allow it to continue applying hedge accounting for hedging relationships affected by reference rate transition, if certain criteria are met. The guidance is effective upon issuance and generally can be applied through December 31, 2022. The Company is in the process of evaluating and applying, as applicable, the optional expedients and exceptions in accounting for eligible contract modifications, eligible existing hedging relationships and new hedging relationships available through December 31, 2022. The adoption of this guidance has not had, and is expected to continue to not have, a material impact on the Company’s financial statements.

 Note 3    Business Combinations

In September 2021, the Company announced that it has entered into a definitive agreement to acquire MUFG Union Bank’s core regional banking franchise from Mitsubishi UFJ Financial Group (“MUFG”), for a purchase price of approximately $8.0 billion, including $5.5 billion in cash and approximately 44 million shares of the Company’s common stock. Upon close of the transaction, MUFG will hold approximately 2.9 percent of the Company’s common stock. The transaction excludes the purchase of MUFG Union Bank’s Global Corporate & Investment Bank, certain middle and back office functions, and other assets. MUFG Union Bank currently has approximately 300 branches in California, Washington and Oregon and is expected to add, based on MUFG Union Bank’s June 30, 2021 balance sheet, approximately $105 billion in total assets, $58 billion of loans and $90 billion of deposits to the Company’s consolidated balance sheet. The transaction is expected to close in the first half of 2022, subject to customary closing conditions, including regulatory approvals.

42 U.S. Bancorp

 Note 4    Investment Securities

The Company’s available-for-sale investment securities are carried at fair value with unrealized net gains or losses reported within accumulated other comprehensive income (loss) in shareholders’ equity. The Company had no outstanding investment securities classified as held-to-maturity at September 30, 2021 and December 31, 2020.

The amortized cost, gross unrealized holding gains and losses, and fair value of available-for-sale investment securities were as follows:

	September 30, 2021									December 31, 2020
(Dollars in Millions)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
U.S. Treasury and agencies	$	18,460	$	230	$	(199	)	$	18,491	$	21,954	$	462	$	(25	)	$	22,391
Mortgage-backed securities
Residential agency		113,137		996		(1,337	)		112,796		98,031		1,950		(13	)		99,968
Commercial agency		7,750		77		(141	)		7,686		5,251		170		(15	)		5,406
Asset-backed securities		64		5		–			69		200		5		–			205
Obligations of state and political subdivisions		9,820		560		(53	)		10,327		8,166		695		–			8,861
Other		7		–		–			7		9		–		–			9
Total available-for-sale	$	149,238	$	1,868	$	(1,730	)	$	149,376	$	133,611	$	3,282	$	(53	)	$	136,840

Investment securities with a fair value of $31.7 billion at September 30, 2021, and $11.0 billion at December 31, 2020, were pledged to secure public, private and trust deposits, repurchase agreements and for other purposes required by contractual obligation or law. Included in these amounts were securities where the Company and certain counterparties have agreements granting the counterparties the right to sell or pledge the securities. Investment securities securing these types of arrangements had a fair value of $850 million at September 30, 2021, and $402 million at December 31, 2020.

The following table provides information about the amount of interest income from taxable and non-taxable investment securities:

	Three Months Ended September 30				Nine Months Ended September 30
(Dollars in Millions)	2021		2020		2021		2020
Taxable	$	539	$	528	$	1,548	$	1,741
Non-taxable		67		58		193		167
Total interest income from investment securities	$	606	$	586	$	1,741	$	1,908

The following table provides information about the amount of gross gains and losses realized through the sales of available-for-sale investment securities:

	Three Months Ended September 30					Nine Months Ended September 30
(Dollars in Millions)	2021			2020		2021			2020
Realized gains	$	39		$	12	$	107		$	166
Realized losses		(19	)		–		(19	)		(23	)
Net realized gains	$	20		$	12	$	88		$	143
Income tax on net realized gains	$	5		$	3	$	22		$	36

The Company conducts a regular assessment of its available-for-sale investment securities with unrealized losses to determine whether all or some portion of a security’s unrealized loss is related to credit and an allowance for credit losses is necessary. If the Company intends to sell or it is more likely than not the Company will be required to sell an investment security, the amortized cost of the security is written down to fair value. When evaluating credit losses, the Company considers various factors such as the nature of the investment security, the credit ratings or financial condition of the issuer, the extent of the unrealized loss, expected cash flows of underlying collateral, the existence of any government or agency guarantees, and market conditions. The Company measures the allowance for credit losses using market information where available and discounting the cash flows at the original effective rate of the investment security. The allowance for credit losses is adjusted each period through earnings and can be subsequently recovered. The allowance for credit losses on the Company’s available-for-sale investment securities was immaterial at September 30, 2021 and December 31, 2020.

U.S. Bancorp 43

At September 30, 2021, certain investment securities had a fair value below amortized cost. The following table shows the gross unrealized losses and fair value of the Company’s available-for-sale investment securities with unrealized losses, aggregated by investment category and length of time the individual investment securities have been in continuous unrealized loss positions, at September 30, 2021:  

	Less Than 12 Months					12 Months or Greater					Total
(Dollars in Millions)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury and agencies	$	6,023	$	(163	)	$	980	$	(36	)	$	7,003	$	(199	)
Residential agency mortgage-backed securities		66,781		(1,328	)		375		(9	)		67,156		(1,337	)
Commercial agency mortgage-backed securities		3,947		(88	)		1,122		(53	)		5,069		(141	)
Asset-backed securities		–		–			2		–			2		–
Obligations of state and political subdivisions		2,145		(53	)		–		–			2,145		(53	)
Other		4		–			–		–			4		–
Total investment securities	$	78,900	$	(1,632	)	$	2,479	$	(98	)	$	81,379	$	(1,730	)

These unrealized losses primarily relate to changes in interest rates and market spreads subsequent to purchase of the investment securities. U.S. Treasury and agencies securities and agency mortgage-backed securities are issued, guaranteed or otherwise supported by the United States government. The Company’s obligations of state and political subdivisions are generally high grade. Accordingly, the Company does not consider these unrealized losses to be credit-related and an allowance for credit losses is not necessary. In general, the issuers of the investment securities are contractually prohibited from prepayment at less than par, and the Company did not pay significant purchase premiums for these investment securities. At September 30, 2021, the Company had no plans to sell investment securities with unrealized losses, and believes it is more likely than not it would not be required to sell such investment securities before recovery of their amortized cost.

During the nine months ended September 30, 2021 and 2020, the Company did not purchase any available-for-sale investment securities that had more-than-insignificant credit deterioration.

44 U.S. Bancorp

The following table provides information about the amortized cost, fair value and yield by maturity date of the available-for-sale investment securities outstanding at September 30, 2021:

(Dollars in Millions)	Amortized Cost		Fair Value		Weighted- Average Maturity in Years		Weighted- Average Yield (e)
U.S. Treasury and Agencies
Maturing in one year or less	$	2,873	$	2,894		.5		1.87	%
Maturing after one year through five years		6,835		6,977		2.4		1.61
Maturing after five years through ten years		7,146		7,041		7.9		1.33
Maturing after ten years		1,606		1,579		12.6		1.91
Total	$	18,460	$	18,491		5.1		1.57	%
Mortgage-Backed Securities (a)
Maturing in one year or less	$	140	$	138		.5		1.70	%
Maturing after one year through five years		54,361		55,259		3.4		1.57
Maturing after five years through ten years		66,370		65,068		6.5		1.53
Maturing after ten years		16		17		12.2		1.27
Total	$	120,887	$	120,482		5.1		1.55	%
Asset-Backed Securities (a)
Maturing in one year or less	$	–	$	–		.6		2.69	%
Maturing after one year through five years		63		66		3.8		1.50
Maturing after five years through ten years		1		2		6.2		2.58
Maturing after ten years		–		1		12.9		2.41
Total	$	64	$	69		3.8		1.51	%
Obligations of State and Political Subdivisions (b) (c)
Maturing in one year or less	$	349	$	355		.6		4.28	%
Maturing after one year through five years		2,492		2,663		4.1		4.24
Maturing after five years through ten years		5,595		5,964		6.9		3.73
Maturing after ten years		1,384		1,345		17.4		2.50
Total	$	9,820	$	10,327		7.4		3.71	%
Other
Maturing in one year or less	$	–	$	–		–		–	%
Maturing after one year through five years		7		7		3.7		2.07
Maturing after five years through ten years		–		–		–		–
Maturing after ten years		–		–		–		–
Total	$	7	$	7		3.7		2.07	%
Total investment securities (d)	$	149,238	$	149,376		5.3		1.69	%

(a) Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities that take into account anticipated future prepayments.

(b) Information related to obligations of state and political subdivisions is presented based upon yield to first optional call date if the security is purchased at a premium, and yield to maturity if the security is purchased at par or a discount.

(c) Maturity calculations for obligations of state and political subdivisions are based on the first optional call date for securities with a fair value above par and the contractual maturity date for securities with a fair value equal to or below par.

(d) The weighted-average maturity of total available-for-sale investment securities was 3.4 years at December 31, 2020, with a corresponding weighted-average yield of 1.61 percent.

(e) Weighted-average yields for obligations of state and political subdivisions are presented on a fully-taxable equivalent basis based on a federal income tax rate of 21 percent. Yields on investment securities are computed based on amortized cost balances.

U.S. Bancorp 45

 Note 5    Loans and Allowance for Credit Losses

The composition of the loan portfolio, disaggregated by class and underlying specific portfolio type, was as follows:​​​​​​​

	September 30, 2021					December 31, 2020
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	95,876		32.2	%	$	97,315		32.7	%
Lease financing		5,137		1.8			5,556		1.9
Total commercial		101,013		34.0			102,871		34.6
Commercial Real Estate
Commercial mortgages		28,029		9.4			28,472		9.6
Construction and development		10,779		3.6			10,839		3.6
Total commercial real estate		38,808		13.0			39,311		13.2
Residential Mortgages
Residential mortgages		65,941		22.2			66,525		22.4
Home equity loans, first liens		9,013		3.0			9,630		3.2
Total residential mortgages		74,954		25.2			76,155		25.6
Credit Card		22,137		7.4			22,346		7.5
Other Retail
Retail leasing		7,505		2.5			8,150		2.7
Home equity and second mortgages		10,718		3.6			12,472		4.2
Revolving credit		2,682		.9			2,688		.9
Installment		16,166		5.5			13,823		4.6
Automobile		23,488		7.9			19,722		6.6
Student		137		–			169		.1
Total other retail		60,696		20.4			57,024		19.1
Total loans	$	297,608		100.0	%	$	297,707		100.0	%

The Company had loans of $89.8 billion at September 30, 2021, and $96.1 billion at December 31, 2020, pledged at the Federal Home Loan Bank, and loans of $73.1 billion at September 30, 2021, and $67.8 billion at December 31, 2020, pledged at the Federal Reserve Bank.

Originated loans are reported at the principal amount outstanding, net of unearned interest and deferred fees and costs, and any partial charge-offs recorded. Net unearned interest and deferred fees and costs amounted to $567 million at September 30, 2021 and $763 million at December 31, 2020. All purchased loans are recorded at fair value at the date of purchase. Beginning January 1, 2020, the Company evaluates purchased loans for more-than-insignificant deterioration at the date of purchase in accordance with applicable authoritative accounting guidance. Purchased loans that have experienced more-than-insignificant deterioration from origination are considered purchased credit deteriorated loans. All other purchased loans are considered non-purchased credit deteriorated loans.

Allowance for Credit Losses Beginning January 1, 2020, the allowance for credit losses is established for current expected credit losses on the Company’s loan and lease portfolio, including unfunded credit commitments. The allowance considers expected losses for the remaining lives of the applicable assets, inclusive of expected recoveries. The allowance for credit losses is increased through provisions charged to earnings and reduced by net charge-offs. Management evaluates the appropriateness of the allowance for credit losses on a quarterly basis. Multiple economic scenarios are considered over a three-year reasonable and supportable forecast period, which includes increasing consideration of historical loss experience over years two and three. These economic scenarios are constructed with interrelated projections of multiple economic variables, and loss estimates are produced that consider the historical correlation of those economic variables with credit losses. After the forecast period, the Company fully reverts to long-term historical loss experience, adjusted for prepayments and characteristics of the current loan and lease portfolio, to estimate losses over the remaining life of the portfolio. The economic scenarios are updated at least quarterly and are designed to provide a range of reasonable estimates, from better to worse than current expectations. Scenarios are weighted based on the Company’s expectation of economic conditions for the foreseeable future and reflect significant judgment and consideration of uncertainties that exist. Final loss estimates also consider factors affecting credit losses not reflected in the scenarios, due to the unique aspects of current conditions and expectations. These factors may include, but are not limited to, loan servicing practices, regulatory guidance, and/or fiscal and monetary policy actions.

The allowance recorded for credit losses utilizes forward-looking expected loss models to consider a variety of factors affecting lifetime credit losses. These factors include, but are not limited to, macroeconomic variables such as unemployment rate, real estate prices, gross domestic product levels and corporate bonds spreads, as well as loan and borrower characteristics, such as internal risk ratings on commercial loans and consumer credit scores, delinquency

46 U.S. Bancorp

status, collateral type and available valuation information, consideration of end-of-term losses on lease residuals, and the remaining term of the loan, adjusted for expected prepayments. For each loan portfolio, model estimates are adjusted as necessary to consider any relevant changes in portfolio composition, lending policies, underwriting standards, risk management practices, economic conditions or other factors that would affect the accuracy of the model. Expected credit loss estimates also include consideration of expected cash recoveries on loans previously charged-off or expected recoveries on collateral dependent loans where recovery is expected through sale of the collateral. Where loans do not exhibit similar risk characteristics, an individual analysis is performed to consider expected credit losses. The allowance recorded for individually evaluated loans greater than $5 million in the commercial lending segment is based on an analysis utilizing expected cash flows discounted using the original effective interest rate, the observable market price of the loan, or the fair value of the collateral, less selling costs, for collateral-dependent loans as appropriate.

The allowance recorded for Troubled Debt Restructuring (“TDR”) loans in the consumer lending segment is determined on a homogenous pool basis utilizing expected cash flows discounted using the original effective interest rate of the pool. TDRs generally do not include loan modifications granted to customers resulting directly from the economic effects of the COVID-19 pandemic, who were otherwise in current payment status. The expected cash flows on TDR loans consider subsequent payment defaults since modification, the borrower’s ability to pay under the restructured terms, and the timing and amount of payments. The allowance for collateral-dependent loans in the consumer lending segment is determined based on the fair value of the collateral less costs to sell. With respect to the commercial lending segment, TDRs may be collectively evaluated for impairment where observed performance history, including defaults, is a primary driver of the loss allocation. For commercial TDRs individually evaluated for impairment, attributes of the borrower are the primary factors in determining the allowance for credit losses. However, historical loss experience is also incorporated into the allowance methodology applied to this category of loans.

Beginning January 1, 2020, when a loan portfolio is purchased, the acquired loans are divided into those considered purchased with more than insignificant credit deterioration (“PCD”) and those not considered purchased with more than insignificant credit deterioration. An allowance is established for each population and considers product mix, risk characteristics of the portfolio, bankruptcy experience, delinquency status and refreshed LTV ratios when possible. The allowance established for purchased loans not considered PCD is recognized through provision expense upon acquisition, whereas the allowance established for loans considered PCD at acquisition is offset by an increase in the basis of the acquired loans. Any subsequent increases and decreases in the allowance related to purchased loans, regardless of PCD status, are recognized through provision expense, with charge-offs charged to the allowance. The Company did not have a material amount of PCD loans included in its loan portfolio at September 30, 2021.

The Company’s methodology for determining the appropriate allowance for credit losses also considers the imprecision inherent in the methodologies used and allocated to the various loan portfolios. As a result, amounts determined under the methodologies described above, are adjusted by management to consider the potential impact of other qualitative factors not captured in the quantitative model adjustments which include, but are not limited to the following: model imprecision, imprecision in economic scenario assumptions, and emerging risks related to either changes in the environment that are affecting specific portfolios, or changes in portfolio concentrations over time that may affect model performance. The consideration of these items results in adjustments to allowance amounts included in the Company’s allowance for credit losses for each loan portfolio.

The Company also assesses the credit risk associated with off-balance sheet loan commitments, letters of credit, investment securities and derivatives. Credit risk associated with derivatives is reflected in the fair values recorded for those positions. The liability for off-balance sheet credit exposure related to loan commitments and other credit guarantees is included in other liabilities. Because business processes and credit risks associated with unfunded credit commitments are essentially the same as for loans, the Company utilizes similar processes to estimate its liability for unfunded credit commitments.

Prior to January 1, 2020, the allowance for credit losses was established based on an incurred loss model. The allowance recorded for loans in the commercial lending segment was based on the migration analysis of commercial loans and actual loss experience. The allowance recorded for loans in the consumer lending segment was determined on a homogenous pool basis and primarily included consideration of delinquency status and historical losses. In addition to the amounts determined under the methodologies described above, management also considered the potential impact of qualitative factors.

U.S. Bancorp 47

Activity in the allowance for credit losses by portfolio class was as follows:

Three Months Ended September 30 (Dollars in Millions)	Commercial			Commercial Real Estate			Residential Mortgages			Credit Card			Other Retail			Total Loans
2021
Balance at beginning of period		$1,838			$1,409			$478			$1,891			$   994			$6,610
Add
Provision for credit losses		(75	)		(104	)		3			(23	)		36			(163	)
Deduct
Loans charged-off		40			14			3			154			55			266
Less recoveries of loans charged-off		(26	)		(1	)		(13	)		(43	)		(36	)		(119	)
Net loan charge-offs (recoveries)		14			13			(10	)		111			19			147
Balance at end of period		$1,749			$1,292			$491			$1,757			$1,011			$6,300
2020
Balance at beginning of period		$2,645			$1,269			$633			$2,156			$1,187			$7,890
Add
Provision for credit losses		20			263			(49	)		369			32			635
Deduct
Loans charged-off		193			89			4			236			89			611
Less recoveries of loans charged-off		(15	)		(6	)		(7	)		(35	)		(33	)		(96	)
Net loan charge-offs (recoveries)		178			83			(3	)		201			56			515
Balance at end of period		$2,487			$1,449			$587			$2,324			$1,163			$8,010

Nine Months Ended September 30 (Dollars in Millions)	Commercial			Commercial Real Estate			Residential Mortgages			Credit Card			Other Retail			Total Loans
2021
Balance at beginning of period		$2,423			$1,544			$573			$2,355			$1,115			$8,010
Add
Provision for credit losses		(577	)		(246	)		(107	)		(195	)		(35	)		(1,160	)
Deduct
Loans charged-off		184			28			13			536			193			954
Less recoveries of loans charged-off		(87	)		(22	)		(38	)		(133	)		(124	)		(404	)
Net loan charge-offs (recoveries)		97			6			(25	)		403			69			550
Balance at end of period		$1,749			$1,292			$491			$1,757			$1,011			$6,300
2020
Balance at beginning of period		$1,484			$   799			$433			$1,128			$   647			$4,491
Add
Change in accounting principle (a)		378			(122	)		(30	)		872			401			1,499
Provision for credit losses		988			875			179			988			335			3,365
Deduct
Loans charged-off		406			112			15			775			316			1,624
Less recoveries of loans charged-off		(43	)		(9	)		(20	)		(111	)		(96	)		(279	)
Net loan charge-offs (recoveries)		363			103			(5	)		664			220			1,345
Balance at end of period		$2,487			$1,449			$587			$2,324			$1,163			$8,010

(a) Effective January 1, 2020, the Company adopted accounting guidance which changed impairment recognition of financial instruments to a model that is based on expected losses rather than incurred losses.

The decrease in the allowance for credit losses from December 31, 2020 to September 30, 2021 primarily reflected factors affecting economic conditions during the first nine months of 2021, including the enactment of additional benefits from government stimulus programs and broad vaccine availability in the United States that has reduced the risks associated with COVID-19, contributing to an economic recovery and strong portfolio credit performance. Other factors considered include concerns around inflationary pressures, new virus variants, sustainability of asset values and borrower liquidity, along with the lack of a clear path to government funding.

Credit Quality The credit quality of the Company’s loan portfolios is assessed as a function of net credit losses, levels of nonperforming assets and delinquencies, and credit quality ratings as defined by the Company.

For all loan portfolio classes, loans are considered past due based on the number of days delinquent except for monthly amortizing loans which are classified delinquent based upon the number of contractually required payments not made (for example, two missed payments is considered 30 days delinquent). When a loan is placed on nonaccrual status, unpaid accrued interest is reversed, reducing interest income in the current period.

Commercial lending segment loans are generally placed on nonaccrual status when the collection of principal and interest has become 90 days past due or is otherwise considered doubtful. Commercial lending segment loans are generally fully or partially charged down to the fair value of the collateral securing the loan, less costs to sell, when the loan is placed on nonaccrual.

Consumer lending segment loans are generally charged-off at a specific number of days or payments past due. Residential mortgages and other retail loans secured by 1-4 family properties are generally charged down to the fair

48 U.S. Bancorp

value of the collateral securing the loan, less costs to sell, at 180 days past due. Residential mortgage loans and lines in a first lien position are placed on nonaccrual status in instances where a partial charge-off occurs unless the loan is well secured and in the process of collection. Residential mortgage loans and lines in a junior lien position secured by 1-4 family properties are placed on nonaccrual status at 120 days past due or when they are behind a first lien that has become 180 days or greater past due or placed on nonaccrual status. Any secured consumer lending segment loan whose borrower has had debt discharged through bankruptcy, for which the loan amount exceeds the fair value of the collateral, is charged down to the fair value of the related collateral and the remaining balance is placed on nonaccrual status. Credit card loans continue to accrue interest until the account is charged-off. Credit cards are charged-off at 180 days past due. Other retail loans not secured by 1-4 family properties are charged-off at 120 days past due; and revolving consumer lines are charged-off at 180 days past due. Similar to credit cards, other retail loans are generally not placed on nonaccrual status because of the relative short period of time to charge-off. Certain retail customers having financial difficulties may have the terms of their credit card and other loan agreements modified to require only principal payments and, as such, are reported as nonaccrual.

For all loan classes, interest payments received on nonaccrual loans are generally recorded as a reduction to a loan’s carrying amount while a loan is on nonaccrual and are recognized as interest income upon payoff of the loan. However, interest income may be recognized for interest payments if the remaining carrying amount of the loan is believed to be collectible. In certain circumstances, loans in any class may be restored to accrual status, such as when a loan has demonstrated sustained repayment performance or no amounts are past due and prospects for future payment are no longer in doubt; or when the loan becomes well secured and is in the process of collection. Loans where there has been a partial charge-off may be returned to accrual status if all principal and interest (including amounts previously charged-off) is expected to be collected and the loan is current.

The following table provides a summary of loans by portfolio class, including the delinquency status of those that continue to accrue interest, and those that are nonperforming:

	Accruing
(Dollars in Millions)	Current		30-89 Days Past Due		90 Days or More Past Due		Nonperforming (b)		Total
September 30, 2021
Commercial	$	100,595		$   163		$  39		$   216		$101,013
Commercial real estate		38,459		32		21		296		38,808
Residential mortgages (a)		74,450		153		114		237		74,954
Credit card		21,807		183		147		–		22,137
Other retail		60,224		251		64		157		60,696
Total loans	$	295,535		$   782		$385		$   906		$297,608
December 31, 2020
Commercial	$	102,127		$   314		$  55		$   375		$102,871
Commercial real estate		38,676		183		2		450		39,311
Residential mortgages (a)		75,529		244		137		245		76,155
Credit card		21,918		231		197		–		22,346
Other retail		56,466		318		86		154		57,024
Total loans	$	294,716		$1,290		$477		$1,224		$297,707

(a) At September 30, 2021, $946 million of loans 30–89 days past due and $1.5 billion of loans 90 days or more past due purchased from Government National Mortgage Association (“GNMA”) mortgage pools whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs, were classified as current, compared with $1.4 billion and $1.8 billion at December 31, 2020, respectively.

(b) Substantially all nonperforming loans at September 30, 2021 and December 31, 2020, had an associated allowance for credit losses. The Company recognized interest income on nonperforming loans of $4 million and $9 million for the three months ended September 30, 2021 and 2020, respectively, and $11 million and $19 million for the nine months ended September 30, 2021 and 2020, respectively.

At September 30, 2021, the amount of foreclosed residential real estate held by the Company, and included in other real estate owned (“OREO”), was $17 million, compared with $23 million at December 31, 2020. These amounts excluded $19 million and $33 million at September 30, 2021 and December 31, 2020, respectively, of foreclosed residential real estate related to mortgage loans whose payments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. In addition, the amount of residential mortgage loans secured by residential real estate in the process of foreclosure at September 30, 2021 and December 31, 2020, was $778 million and $1.0 billion, respectively, of which $620 million and $812 million, respectively, related to loans purchased from Government National Mortgage Association (“GNMA”) mortgage pools whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs.

U.S. Bancorp 49

The Company classifies its loan portfolio classes using internal credit quality ratings on a quarterly basis. These ratings include pass, special mention and classified, and are an important part of the Company’s overall credit risk management process and evaluation of the allowance for credit losses. Loans with a pass rating represent those loans not classified on the Company’s rating scale for problem credits, as minimal credit risk has been identified. Special mention loans are those loans that have a potential weakness deserving management’s close attention. Classified loans are those loans where a well-defined weakness has been identified that may put full collection of contractual cash flows at risk. It is possible that others, given the same information, may reach different reasonable conclusions regarding the credit quality rating classification of specific loans.

The following table provides a summary of loans by portfolio class and the Company’s internal credit quality rating:

	September 30, 2021										December 31, 2020
			Criticized										Criticized
(Dollars in Millions)	Pass		Special Mention		Classified (a)		Total Criticized		Total		Pass		Special Mention		Classified (a)		Total Criticized		Total
Commercial
Originated in 2021		$  32,826		$   346		$   277		$     623		$  33,449		$          –		$       –		$       –		$         –		$          –
Originated in 2020		17,202		637		252		889		18,091		34,557		1,335		1,753		3,088		37,645
Originated in 2019		11,851		198		63		261		12,112		17,867		269		349		618		18,485
Originated in 2018		6,853		77		51		128		6,981		12,349		351		176		527		12,876
Originated in 2017		3,213		14		53		67		3,280		5,257		117		270		387		5,644
Originated prior to 2017		3,373		30		40		70		3,443		4,954		128		115		243		5,197
Revolving		23,204		353		100		453		23,657		22,445		299		280		579		23,024
Total commercial		98,522		1,655		836		2,491		101,013		97,429		2,499		2,943		5,442		102,871
Commercial real estate
Originated in 2021		9,456		50		772		822		10,278		–		–		–		–		–
Originated in 2020		8,238		119		435		554		8,792		9,446		461		1,137		1,598		11,044
Originated in 2019		7,382		298		694		992		8,374		9,514		454		1,005		1,459		10,973
Originated in 2018		3,662		142		330		472		4,134		6,053		411		639		1,050		7,103
Originated in 2017		1,943		25		150		175		2,118		2,650		198		340		538		3,188
Originated prior to 2017		3,239		26		103		129		3,368		4,762		240		309		549		5,311
Revolving		1,556		1		187		188		1,744		1,445		9		238		247		1,692
Total commercial real estate		35,476		661		2,671		3,332		38,808		33,870		1,773		3,668		5,441		39,311
Residential mortgages (b)
Originated in 2021		21,045		–		–		–		21,045		–		–		–		–		–
Originated in 2020		18,043		1		5		6		18,049		23,262		1		3		4		23,266
Originated in 2019		8,508		1		18		19		8,527		13,969		1		17		18		13,987
Originated in 2018		3,492		–		21		21		3,513		5,670		1		22		23		5,693
Originated in 2017		4,494		–		21		21		4,515		6,918		1		24		25		6,943
Originated prior to 2017		19,002		–		302		302		19,304		25,921		2		342		344		26,265
Revolving		1		–		–		–		1		1		–		–		–		1
Total residential mortgages		74,585		2		367		369		74,954		75,741		6		408		414		76,155
Credit card (c)		21,990		–		147		147		22,137		22,149		–		197		197		22,346
Other retail
Originated in 2021		17,248		–		3		3		17,251		–		–		–		–		–
Originated in 2020		13,318		–		8		8		13,326		17,589		–		7		7		17,596
Originated in 2019		8,300		–		16		16		8,316		11,605		–		23		23		11,628
Originated in 2018		4,332		–		16		16		4,348		6,814		–		27		27		6,841
Originated in 2017		2,130		–		11		11		2,141		3,879		–		22		22		3,901
Originated prior to 2017		2,259		–		16		16		2,275		3,731		–		29		29		3,760
Revolving		12,400		–		123		123		12,523		12,647		–		110		110		12,757
Revolving converted to term		473		–		43		43		516		503		–		38		38		541
Total other retail		60,460		–		236		236		60,696		56,768		–		256		256		57,024
Total loans		$291,033		$2,318		$4,257		$  6,575		$297,608		$285,957		$4,278		$7,472		$11,750		$297,707
Total outstanding commitments		$645,955		$4,606		$6,342		$10,948		$656,903		$627,606		$8,772		$9,374		$18,146		$645,752

Note: Year of origination is based on the origination date of a loan, or for existing loans the date when the maturity date, pricing or commitment amount is amended.

(a) Classified rating on consumer loans primarily based on delinquency status.

(b) At September 30, 2021, $1.5 billion of GNMA loans 90 days or more past due and $1.2 billion of restructured GNMA loans whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs were classified with a pass rating, compared with $1.8 billion and $1.4 billion at December 31, 2020, respectively.

(c) All credit card loans are considered revolving loans.

Troubled Debt Restructurings In certain circumstances, the Company may modify the terms of a loan to maximize the collection of amounts due when a borrower is experiencing financial difficulties or is expected to experience difficulties

50 U.S. Bancorp

in the near-term. Concessionary modifications are classified as TDRs unless the modification results in only an insignificant delay in payments to be received. The Company recognizes interest on TDRs if the borrower complies with the revised terms and conditions as agreed upon with the Company and has demonstrated repayment performance at a level commensurate with the modified terms over several payment cycles, which is generally six months or greater. To the extent a previous restructuring was insignificant, the Company considers the cumulative effect of past restructurings related to the receivable when determining whether a current restructuring is a TDR.

The following table provides a summary of loans modified as TDRs for the periods presented by portfolio class:

	2021						2020
(Dollars in Millions)	Number of Loans		Pre-Modification Outstanding Loan Balance		Post-Modification Outstanding Loan Balance		Number of Loans		Pre-Modification Outstanding Loan Balance		Post-Modification Outstanding Loan Balance
Three Months Ended September 30
Commercial		506		$     46		$  47		699		$   262		$   159
Commercial real estate		14		12		13		51		105		81
Residential mortgages		171		54		54		374		108		108
Credit card		6,656		38		38		4,699		27		27
Other retail		382		9		9		508		26		26
Total loans, excluding loans purchased from GNMA mortgage pools		7,729		159		161		6,331		528		401
Loans purchased from GNMA mortgage pools		802		113		118		735		106		105
Total loans		8,531		$   272		$279		7,066		$   634		$   506
Nine Months Ended September 30
Commercial		1,736		$   133		$120		2,837		$   505		$   375
Commercial real estate		100		136		125		116		165		141
Residential mortgages		867		299		298		585		142		142
Credit card		17,492		102		103		19,282		110		112
Other retail		2,175		64		58		1,537		50		48
Total loans, excluding loans purchased from GNMA mortgage pools		22,370		734		704		24,357		972		818
Loans purchased from GNMA mortgage pools		1,839		267		276		3,648		514		503
Total loans		24,209		$1,001		$980		28,005		$1,486		$1,321

Residential mortgages, home equity and second mortgages, and loans purchased from GNMA mortgage pools in the table above include trial period arrangements offered to customers during the periods presented. The post-modification balances for these loans reflect the current outstanding balance until a permanent modification is made. In addition, the post-modification balances typically include capitalization of unpaid accrued interest and/or fees under the various modification programs. At September 30, 2021, 5 residential mortgages, 2 home equity and second mortgage loans and 43 loans purchased from GNMA mortgage pools with outstanding balances of less than $1 million, less than $1 million and $5 million, respectively, were in a trial period and have estimated post-modification balances of less than $1 million, less than $1 million and $5 million, respectively, assuming permanent modification occurs at the end of the trial period.

The Company has implemented certain restructuring programs that may result in TDRs. However, many of the Company’s TDRs are also determined on a case-by-case basis in connection with ongoing loan collection processes.

For the commercial lending segment, modifications generally result in the Company working with borrowers on a case-by-case basis. Commercial and commercial real estate modifications generally include extensions of the maturity date and may be accompanied by an increase or decrease to the interest rate, which may not be deemed a market interest rate. In addition, the Company may work with the borrower in identifying other changes that mitigate loss to the Company, which may include additional collateral or guarantees to support the loan. To a lesser extent, the Company may waive contractual principal. The Company classifies all of the above concessions as TDRs to the extent the Company determines that the borrower is experiencing financial difficulty.

Modifications for the consumer lending segment are generally part of programs the Company has initiated. The Company modifies residential mortgage loans under Federal Housing Administration, United States Department of Veterans Affairs, or its own internal programs. Under these programs, the Company offers qualifying homeowners the opportunity to permanently modify their loan and achieve more affordable monthly payments by providing loan concessions. These concessions may include adjustments to interest rates, conversion of adjustable rates to fixed rates, extension of maturity dates or deferrals of payments, capitalization of accrued interest and/or outstanding advances, or in limited situations, partial forgiveness of loan principal. In most instances, participation in residential mortgage loan restructuring programs requires the customer to complete a short-term trial period. A permanent loan modification is

U.S. Bancorp 51

contingent on the customer successfully completing the trial period arrangement, and the loan documents are not modified until that time. The Company reports loans in a trial period arrangement as TDRs and continues to report them as TDRs after the trial period.

Credit card and other retail loan TDRs are generally part of distinct restructuring programs providing customers experiencing financial difficulty with modifications whereby balances may be amortized up to 60 months, and generally include waiver of fees and reduced interest rates.

In addition, the Company considers secured loans to consumer borrowers that have debt discharged through bankruptcy where the borrower has not reaffirmed the debt to be TDRs.

Loan modifications or concessions granted to borrowers resulting directly from the effects of the COVID-19 pandemic, who were otherwise in current payment status, are generally not considered to be TDRs. As of September 30, 2021 and December 31, 2020, approximately $3.0 billion and $10.1 billion, respectively, of loan modifications included on the Company’s consolidated balance sheet related to borrowers impacted by the COVID-19 pandemic, consisting primarily of payment deferrals. 

The following table provides a summary of TDR loans that defaulted (fully or partially charged-off or became 90 days or more past due) for the periods presented, that were modified as TDRs within 12 months previous to default:

	2021				2020
(Dollars in Millions)	Number of Loans		Amount Defaulted		Number of Loans		Amount Defaulted
Three Months Ended September 30
Commercial		244		$  5		305		$  21
Commercial real estate		4		1		5		8
Residential mortgages		20		2		5		2
Credit card		2,069		12		1,363		8
Other retail		124		2		55		1
Total loans, excluding loans purchased from GNMA mortgage pools		2,461		22		1,733		40
Loans purchased from GNMA mortgage pools		29		5		72		9
Total loans		2,490		$27		1,805		$  49
Nine Months Ended September 30
Commercial		856		$29		922		$  49
Commercial real estate		16		7		33		24
Residential mortgages		47		5		23		4
Credit card		5,638		32		5,169		27
Other retail		595		10		245		3
Total loans, excluding loans purchased from GNMA mortgage pools		7,152		83		6,392		107
Loans purchased from GNMA mortgage pools		102		15		427		57
Total loans		7,254		$98		6,819		$164

In addition to the defaults in the table above, the Company had a total of 10 and 45 residential mortgage loans, home equity and second mortgage loans and loans purchased from GNMA mortgage pools for the three months and nine months ended September 30, 2021, respectively, where borrowers did not successfully complete the trial period arrangement and, therefore, are no longer eligible for a permanent modification under the applicable modification program. These loans had aggregate outstanding balances of $1 million and $7 million for the three months and nine months ended September 30, 2021, respectively.

As of September 30, 2021, the Company had $158 million of commitments to lend additional funds to borrowers whose terms of their outstanding owed balances have been modified in TDRs.

 Note 6    Accounting for Transfers and Servicing of Financial Assets and Variable Interest Entities

The Company transfers financial assets in the normal course of business. The majority of the Company’s financial asset transfers are residential mortgage loan sales primarily to government-sponsored enterprises (“GSEs”), transfers of tax-advantaged investments, commercial loan sales through participation agreements, and other individual or portfolio loan and securities sales. In accordance with the accounting guidance for asset transfers, the Company considers any ongoing involvement with transferred assets in determining whether the assets can be derecognized from the balance sheet. Guarantees provided to certain third parties in connection with the transfer of assets are further discussed in Note 16.

For loans sold under participation agreements, the Company also considers whether the terms of the loan participation agreement meet the accounting definition of a participating interest. With the exception of servicing and certain performance-based guarantees, the Company’s continuing involvement with financial assets sold is minimal and generally limited to market customary representation and warranty clauses. Any gain or loss on sale depends on the

52 U.S. Bancorp

previous carrying amount of the transferred financial assets, the consideration received, and any liabilities incurred in exchange for the transferred assets. Upon transfer, any servicing assets and other interests that continue to be held by the Company are initially recognized at fair value. For further information on mortgage servicing rights (“MSRs”), refer to Note 7. On a limited basis, the Company may acquire and package high-grade corporate bonds for select corporate customers, in which the Company generally has no continuing involvement with these transactions. Additionally, the Company is an authorized GNMA issuer and issues GNMA securities on a regular basis. The Company has no other asset securitizations or similar asset-backed financing arrangements that are off-balance sheet.

The Company also provides financial support primarily through the use of waivers of trust and investment management fees associated with various unconsolidated registered money market funds it manages. The Company provided $67 million and $28 million of support to the funds during the three months ended September 30, 2021 and 2020, respectively, and $184 million and $49 million during the nine months ended September 30, 2021 and 2020, respectively.

The Company is involved in various entities that are considered to be variable interest entities (“VIEs”). The Company’s investments in VIEs are primarily related to investments promoting affordable housing, community development and renewable energy sources. Some of these tax-advantaged investments support the Company’s regulatory compliance with the Community Reinvestment Act. The Company’s investments in these entities generate a return primarily through the realization of federal and state income tax credits, and other tax benefits, such as tax deductions from operating losses of the investments, over specified time periods. These tax credits are recognized as a reduction of tax expense or, for investments qualifying as investment tax credits, as a reduction to the related investment asset. The Company recognized federal and state income tax credits related to its affordable housing and other tax-advantaged investments in tax expense of $113 million and $142 million for the three months ended September 30, 2021 and 2020, respectively, and $356 million and $437 million for the nine months ended September 30, 2021 and 2020, respectively. The Company also recognized $75 million and $118 million of investment tax credits for the three months ended September 30, 2021 and 2020, respectively, and $235 million and $307 million for the nine months ended September 30, 2021 and 2020, respectively. The Company recognized $101 million and $142 million of expenses related to all of these investments for the three months ended September 30, 2021 and 2020, respectively, of which $83 million and $97 million, respectively, were included in tax expense and the remaining amounts were included in noninterest expense. The Company recognized $333 million and $429 million of expenses related to all of these investments for the nine months ended September 30, 2021 and 2020, respectively, of which $262 million and $297 million, respectively, were included in tax expense and the remaining amounts were included in noninterest expense.

The Company is not required to consolidate VIEs in which it has concluded it does not have a controlling financial interest, and thus is not the primary beneficiary. In such cases, the Company does not have both the power to direct the entities’ most significant activities and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs.

The Company’s investments in these unconsolidated VIEs are carried in other assets on the Consolidated Balance Sheet. The Company’s unfunded capital and other commitments related to these unconsolidated VIEs are generally carried in other liabilities on the Consolidated Balance Sheet. The Company’s maximum exposure to loss from these unconsolidated VIEs include the investment recorded on the Company’s Consolidated Balance Sheet, net of unfunded capital commitments, and previously recorded tax credits which remain subject to recapture by taxing authorities based on compliance features required to be met at the project level. While the Company believes potential losses from these investments are remote, the maximum exposure was determined by assuming a scenario where the community-based business and housing projects completely fail and do not meet certain government compliance requirements resulting in recapture of the related tax credits.

The following table provides a summary of investments in community development and tax-advantaged VIEs that the Company has not consolidated:

(Dollars in Millions)	September 30, 2021		December 31, 2020
Investment carrying amount	$	4,865	$	5,378
Unfunded capital and other commitments		2,180		2,334
Maximum exposure to loss		10,368		11,219

U.S. Bancorp 53

The Company also has noncontrolling financial investments in private investment funds and partnerships considered to be VIEs, which are not consolidated. The Company’s recorded investment in these entities, carried in other assets on the Consolidated Balance Sheet, was approximately $40 million at September 30, 2021 and $35 million at December 31, 2020. The maximum exposure to loss related to these VIEs was $81 million at September 30, 2021 and $57 million at December 31, 2020, representing the Company’s investment balance and its unfunded commitments to invest additional amounts.

The Company’s individual net investments in unconsolidated VIEs, which exclude any unfunded capital commitments, ranged from less than $1 million to $71 million at September 30, 2021, compared with less than $1 million to $78 million at December 31, 2020.

The Company is required to consolidate VIEs in which it has concluded it has a controlling financial interest. The Company sponsors entities to which it transfers its interests in tax-advantaged investments to third parties. At September 30, 2021, approximately $5.1 billion of the Company’s assets and $3.6 billion of its liabilities included on the Consolidated Balance Sheet were related to community development and tax-advantaged investment VIEs which the Company has consolidated, primarily related to these transfers. These amounts compared to $4.9 billion and $3.7 billion, respectively, at December 31, 2020. The majority of the assets of these consolidated VIEs are reported in other assets, and the liabilities are reported in long-term debt and other liabilities. The assets of a particular VIE are the primary source of funds to settle its obligations. The creditors of the VIEs do not have recourse to the general credit of the Company. The Company’s exposure to the consolidated VIEs is generally limited to the carrying value of its variable interests plus any related tax credits previously recognized or transferred to others with a guarantee.

In addition, the Company sponsors a municipal bond securities tender option bond program. The Company controls the activities of the program’s entities, is entitled to the residual returns and provides liquidity and remarketing arrangements to the program. As a result, the Company has consolidated the program’s entities. At September 30, 2021, $1.7 billion of available-for-sale investment securities and $1.2 billion of short-term borrowings on the Consolidated Balance Sheet were related to the tender option bond program, compared with $2.4 billion of available-for-sale investment securities and $1.5 billion of short-term borrowings at December 31, 2020.

 Note 7    Mortgage Servicing Rights

The Company capitalizes MSRs as separate assets when loans are sold and servicing is retained. MSRs may also be purchased from others. The Company carries MSRs at fair value, with changes in the fair value recorded in earnings during the period in which they occur. The Company serviced $219.3 billion of residential mortgage loans for others at September 30, 2021, and $211.8 billion at December 31, 2020, including subserviced mortgages with no corresponding MSR asset. Included in mortgage banking revenue are the MSR fair value changes arising from market rate and model assumption changes, net of the value change in derivatives used to economically hedge MSRs. These changes resulted in a net loss of $21 million and a net gain of $9 million for the three months ended September 30, 2021 and 2020, respectively, and a net loss of $168 million and a net gain of $58 million for the nine months ended September 30, 2021 and 2020, respectively. Loan servicing and ancillary fees, not including valuation changes, included in mortgage banking revenue were $183 million and $177 million for the three months ended September 30, 2021 and 2020, respectively, and $536 million and $537 million for the nine months ended September 30, 2021 and 2020, respectively.

Changes in fair value of capitalized MSRs are summarized as follows:

	Three Months Ended September 30						Nine Months Ended September 30
(Dollars in Millions)	2021			2020			2021			2020
Balance at beginning of period	$	2,713		$	1,840		$	2,210		$	2,546
Rights purchased		9			8			36			16
Rights capitalized		284			321			896			712
Rights sold (a)		—			1			1			3
Changes in fair value of MSRs
Due to fluctuations in market interest rates (b)		53			(8	)		307			(815	)
Due to revised assumptions or models (c)		(30	)		(7	)		(169	)		37
Other changes in fair value (d)		(119	)		(177	)		(371	)		(521	)
Balance at end of period	$	2,910		$	1,978		$	2,910		$	1,978

(a) MSRs sold include those having a negative fair value, resulting from the loans being severely delinquent.

(b) Includes changes in MSR value associated with changes in market interest rates, including estimated prepayment rates and anticipated earnings on escrow deposits.

(c) Includes changes in MSR value not caused by changes in market interest rates, such as changes in assumed cost to service, ancillary income and option adjusted spread, as well as the impact of any model changes.

(d) Primarily the change in MSR value from passage of time and cash flows realized (decay), but also includes the impact of changes to expected cash flows not associated with changes in market interest rates, such as the impact of delinquencies.

54 U.S. Bancorp

The estimated sensitivity to changes in interest rates of the fair value of the MSR portfolio and the related derivative instruments was as follows:

	September 30, 2021																		December 31, 2020
(Dollars in Millions)	Down 100 bps			Down 50 bps			Down 25 bps			Up 25 bps			Up 50 bps			Up 100 bps			Down 100 bps			Down 50 bps			Down 25 bps			Up 25 bps			Up 50 bps			Up 100 bps
MSR portfolio	$	(619	)	$	(320	)	$	(161	)	$	154		$	294		$	520		$	(442	)	$	(271	)	$	(150	)	$	169		$	343		$	671
Derivative instrument hedges		574			290			144			(137	)		(270	)		(524	)		523			281			145			(149	)		(304	)		(625	)
Net sensitivity	$	(45	)	$	(30	)	$	(17	)	$	17		$	24		$	(4	)	$	81		$	10		$	(5	)	$	20		$	39		$	46

The fair value of MSRs and their sensitivity to changes in interest rates is influenced by the mix of the servicing portfolio and characteristics of each segment of the portfolio. The Company’s servicing portfolio consists of the distinct portfolios of government-insured mortgages, conventional mortgages and Housing Finance Agency (“HFA”) mortgages. The servicing portfolios are predominantly comprised of fixed-rate agency loans with limited adjustable-rate or jumbo mortgage loans. The HFA servicing portfolio is comprised of loans originated under state and local housing authority program guidelines which assist purchases by first-time or low- to moderate-income homebuyers through a favorable rate subsidy, down payment and/or closing cost assistance on government- and conventional-insured mortgages.

A summary of the Company’s MSRs and related characteristics by portfolio was as follows:

	September 30, 2021												December 31, 2020
(Dollars in Millions)	HFA			Government			Conventional(d)			Total			HFA			Government			Conventional(d)			Total
Servicing portfolio (a)	$	40,038		$	22,392		$	153,543		$	215,973		$	40,396		$	25,474		$	143,085		$	208,955
Fair value	$	508		$	304		$	2,098		$	2,910		$	406		$	261		$	1,543		$	2,210
Value (bps) (b)		127			136			137			135			101			102			108			106
Weighted-average servicing fees (bps)		36			41			30			32			35			40			30			32
Multiple (value/servicing fees)		3.56			3.34			4.51			4.16			2.87			2.56			3.55			3.26
Weighted-average note rate		4.14	%		3.75	%		3.48	%		3.63	%		4.43	%		3.91	%		3.78	%		3.92	%
Weighted-average age (in years)		3.8			5.8			3.4			3.7			3.8			5.6			4.2			4.3
Weighted-average expected prepayment (constant prepayment rate)		11.3	%		13.4	%		9.4	%		10.2	%		14.1	%		18.0	%		13.8	%		14.4	%
Weighted-average expected life (in years)		6.6			5.5			7.0			6.8			5.6			4.3			5.5			5.4
Weighted-average option adjusted spread (c)		7.7	%		7.3	%		6.5	%		6.8	%		7.7	%		7.3	%		6.2	%		6.6	%

(a) Represents principal balance of mortgages having corresponding MSR asset.

(b) Calculated as fair value divided by the servicing portfolio.

(c) Option adjusted spread is the incremental spread added to the risk-free rate to reflect optionality and other risk inherent in the MSRs.

(d) Represents loans sold primarily to GSEs.

 Note 8    Preferred Stock

At September 30, 2021 and December 31, 2020, the Company had authority to issue 50 million shares of preferred stock. The number of shares issued and outstanding and the carrying amount of each outstanding series of the Company’s preferred stock were as follows:

	September 30, 2021								December 31, 2020
(Dollars in Millions)	Shares Issued and Outstanding		Liquidation Preference		Discount		Carrying Amount		Shares Issued and Outstanding		Liquidation Preference		Discount		Carrying Amount
Series A		12,510	$	1,251	$	145	$	1,106		12,510	$	1,251	$	145	$	1,106
Series B		40,000		1,000		—		1,000		40,000		1,000		—		1,000
Series F		44,000		1,100		12		1,088		44,000		1,100		12		1,088
Series I		—		—		—		—		30,000		750		5		745
Series J		40,000		1,000		7		993		40,000		1,000		7		993
Series K		23,000		575		10		565		23,000		575		10		565
Series L		20,000		500		14		486		20,000		500		14		486
Series M		30,000		750		20		730		—		—		—		—
Total preferred stock (a)		209,510	$	6,176	$	208	$	5,968		209,510	$	6,176	$	193	$	5,983

(a) The par value of all shares issued and outstanding at September 30, 2021 and December 31, 2020, was $1.00 per share.

During the first nine months of 2021, the Company issued depositary shares representing an ownership interest in 30,000 shares of Series M Non-Cumulative Perpetual Preferred Stock with a liquidation preference of $25,000 per share (the “Series M Preferred Stock”). The Series M Preferred Stock has no stated maturity and will not be subject to

U.S. Bancorp 55

any sinking fund or other obligation of the Company. Dividends, if declared, will accrue and be payable quarterly, in arrears, at a rate per annum equal to 4.00 percent. The Series M Preferred Stock is redeemable at the Company’s option, in whole or in part, on or after April 15, 2026. The Series M Preferred Stock is redeemable at the Company’s option, in whole, but not in part, prior to April 15, 2026 within 90 days following an official administrative or judicial decision, amendment to, or change in the laws or regulations that would not allow the Company to treat the full liquidation value of the Series M Preferred Stock as Tier 1 capital for purposes of the capital adequacy guidelines of the Federal Reserve Board.

During the first nine months of 2021, the Company redeemed all outstanding shares of the Series I Non-Cumulative Perpetual Preferred Stock (the “Series I Preferred Stock”) at a redemption price equal to the liquidation preference amount. The Company included a $5 million loss in the computation of diluted earnings per common share for the first nine months of 2021, which represents the stock issuance costs recorded in preferred stock upon the issuance of the Series I Preferred Stock that were reclassified to retained earnings on the date the Company provided notice of its intent to redeem the outstanding shares.

 Note 9    Accumulated Other Comprehensive Income (Loss)

Shareholders' equity is affected by transactions and valuations of asset and liability positions that require adjustments to accumulated other comprehensive income (loss). The reconciliation of the transactions affecting accumulated other comprehensive income (loss) included in shareholders' equity is as follows:

Three Months Ended September 30 (Dollars in Millions)	Unrealized Gains (Losses) on Investment Securities Available-For- Sale			Unrealized Gains (Losses) on Derivative Hedges			Unrealized Gains (Losses) on Retirement Plans			Foreign Currency Translation			Total
2021
Balance at beginning of period	$	735		$	(107	)	$	(1,783	)	$	(47	)	$	(1,202	)
Changes in unrealized gains and losses		(825	)		8			—			—			(817	)
Foreign currency translation adjustment (a)		—			—			—			(1	)		(1	)
Reclassification to earnings of realized gains and losses		(20	)		8			39			—			27
Applicable income taxes		215			(4	)		(10	)		—			201
Balance at end of period	$	105		$	(95	)	$	(1,754	)	$	(48	)	$	(1,792	)
2020
Balance at beginning of period	$	2,701		$	(240	)	$	(1,589	)	$	(74	)	$	798
Changes in unrealized gains and losses		(305	)		27			—			—			(278	)
Foreign currency translation adjustment (a)		—			—			—			6			6
Reclassification to earnings of realized gains and losses		(12	)		3			32			—			23
Applicable income taxes		81			(7	)		(9	)		(2	)		63
Balance at end of period	$	2,465		$	(217	)	$	(1,566	)	$	(70	)	$	612

(a) Represents the impact of changes in foreign currency exchange rates on the Company's investment in foreign operations and related hedges.

Nine Months Ended September 30 (Dollars in Millions)	Unrealized Gains (Losses) on Investment Securities Available-For- Sale			Unrealized Gains (Losses) on Derivative Hedges			Unrealized Gains (Losses) on Retirement Plans			Foreign Currency Translation			Total
2021
Balance at beginning of period	$	2,417		$	(189	)	$	(1,842	)	$	(64	)	$	322
Changes in unrealized gains and losses		(3,008	)		121			—			—			(2,887	)
Foreign currency translation adjustment (a)		—			—			—			23			23
Reclassification to earnings of realized gains and losses		(88	)		4			118			—			34
Applicable income taxes		784			(31	)		(30	)		(7	)		716
Balance at end of period	$	105		$	(95	)	$	(1,754	)	$	(48	)	$	(1,792	)
2020
Balance at beginning of period	$	379		$	(51	)	$	(1,636	)	$	(65	)	$	(1,373	)
Changes in unrealized gains and losses		2,935			(230	)		—			—			2,705
Foreign currency translation adjustment (a)		—			—			—			(6	)		(6	)
Reclassification to earnings of realized gains and losses		(143	)		7			94			—			(42	)
Applicable income taxes		(706	)		57			(24	)		1			(672	)
Balance at end of period	$	2,465		$	(217	)	$	(1,566	)	$	(70	)	$	612

(a) Represents the impact of changes in foreign currency exchange rates on the Company's investment in foreign operations and related hedges.

56 U.S. Bancorp

Additional detail about the impact to net income for items reclassified out of accumulated other comprehensive income (loss) and into earnings is as follows:

	Impact to Net Income												Affected Line Item in the Consolidated Statement of Income
	Three Months Ended September 30						Nine Months Ended September 30
(Dollars in Millions)	2021			2020			2021			2020
Unrealized gains (losses) on investment securities available-for-sale
Realized gains (losses) on sale of investment securities	$	20		$	12		$	88		$	143		Securities gains (losses), net
		(5	)		(3	)		(22	)		(36	)	Applicable income taxes
		15			9			66			107		Net-of-tax
Unrealized gains (losses) on derivative hedges
Realized gains (losses) on derivative hedges		(8	)		(3	)		(4	)		(7	)	Interest expense
		2			1			1			2		Applicable income taxes
		(6	)		(2	)		(3	)		(5	)	Net-of-tax
Unrealized gains (losses) on retirement plans
Actuarial gains (losses) and prior service cost (credit) amortization		(39	)		(32	)		(118	)		(94	)	Other noninterest expense
		10			9			30			24		Applicable income taxes
		(29	)		(23	)		(88	)		(70	)	Net-of-tax
Total impact to net income	$	(20	)	$	(16	)	$	(25	)	$	32

 Note 10    Earnings Per Share

The components of earnings per share were:

	Three Months Ended September 30						Nine Months Ended September 30
(Dollars and Shares in Millions, Except Per Share Data)	2021			2020			2021			2020
Net income attributable to U.S. Bancorp	$	2,028		$	1,580		$	6,290		$	3,440
Preferred dividends		(84	)		(79	)		(232	)		(229	)
Impact of preferred stock redemption (a)		—			—			(5	)		—
Earnings allocated to participating stock awards		(10	)		(7	)		(30	)		(15	)
Net income applicable to U.S. Bancorp common shareholders	$	1,934		$	1,494		$	6,023		$	3,196
Average common shares outstanding		1,483			1,506			1,491			1,510
Net effect of the exercise and assumed purchase of stock awards		1			1			1			1
Average diluted common shares outstanding		1,484			1,507			1,492			1,511
Earnings per common share	$	1.30		$	.99		$	4.04		$	2.12
Diluted earnings per common share	$	1.30		$	.99		$	4.04		$	2.11

(a) Represents stock issuance costs originally recorded in preferred stock upon the issuance of the Company’s Series I Preferred Stock that were reclassified to retained earnings on the date the Company announced its intent to redeem the outstanding shares.

Options outstanding at September 30, 2020, to purchase 4 million and 2 million common shares for the three months and nine months ended September 30, 2020, respectively, were not included in the computation of diluted earnings per share because they were antidilutive.

 Note 11    Employee Benefits

The components of net periodic benefit cost for the Company's retirement plans were:

	Three Months Ended September 30												Nine Months Ended September 30
	Pension Plans						Postretirement Welfare Plan						Pension Plans						Postretirement Welfare Plan
(Dollars in Millions)	2021			2020			2021			2020			2021			2020			2021			2020
Service cost	$	66		$	58		$	—		$	—		$	198		$	176		$	—		$	—
Interest cost		54			59			1			—			164			176			1			1
Expected return on plan assets		(112	)		(101	)		—			—			(337	)		(302	)		—			(2	)
Prior service cost (credit) amortization		—			—			(1	)		—			(1	)		—			(3	)		(2	)
Actuarial loss (gain) amortization		42			34			(2	)		(2	)		127			101			(5	)		(5	)
Net periodic benefit cost (a)	$	50		$	50		$	(2	)	$	(2	)	$	151		$	151		$	(7	)	$	(8	)

(a) Service cost is included in employee benefits expense on the Consolidated Statement of Income. All other components are included in other noninterest expense on the Consolidated Statement of Income.

U.S. Bancorp 57

Note 12    Income Taxes

The components of income tax expense were:

	Three Months Ended September 30					Nine Months Ended September 30
(Dollars in Millions)	2021		2020			2021		2020
Federal
Current	$	354	$	(53	)	$	1,057	$	966
Deferred		99		306			305		(459	)
Federal income tax		453		253			1,362		507
State
Current		94		92			297		298
Deferred		17		2			63		(134	)
State income tax		111		94			360		164
Total income tax provision	$	564	$	347		$	1,722	$	671

A reconciliation of expected income tax expense at the federal statutory rate of 21 percent to the Company’s applicable income tax expense follows:

	Three Months Ended September 30						Nine Months Ended September 30
(Dollars in Millions)	2021			2020			2021			2020
Tax at statutory rate	$	546		$	406		$	1,686		$	867
State income tax, at statutory rates, net of federal tax benefit		108			75			327			170
Tax effect of
Tax credits and benefits, net of related expenses		(91	)		(82	)		(267	)		(280	)
Exam resolutions		—			(47	)		—			(47	)
Tax-exempt income		(28	)		(29	)		(85	)		(87	)
Other items		29			24			61			48
Applicable income taxes	$	564		$	347		$	1,722		$	671

The Company’s income tax returns are subject to review and examination by federal, state, local and foreign government authorities. On an ongoing basis, numerous federal, state, local and foreign examinations are in progress and cover multiple tax years. As of September 30, 2021, federal tax examinations for all years ending through December 31, 2014 are completed and resolved. The Company's tax returns for the years ended December 31, 2015, 2016, 2017 and 2018 are under examination by the Internal Revenue Service. The years open to examination by foreign, state and local government authorities vary by jurisdiction.

The Company’s net deferred tax asset was $946 million at September 30, 2021 and $597 million at December 31, 2020.

 Note 13    Derivative Instruments

In the ordinary course of business, the Company enters into derivative transactions to manage various risks and to accommodate the business requirements of its customers. The Company recognizes all derivatives on the Consolidated Balance Sheet at fair value in other assets or in other liabilities. On the date the Company enters into a derivative contract, the derivative is designated as either a fair value hedge, cash flow hedge, net investment hedge, or a designation is not made as it is a customer-related transaction, an economic hedge for asset/liability risk management purposes or another stand-alone derivative created through the Company’s operations (“free-standing derivative”). When a derivative is designated as a fair value, cash flow or net investment hedge, the Company performs an assessment, at inception and, at a minimum, quarterly thereafter, to determine the effectiveness of the derivative in offsetting changes in the value or cash flows of the hedged item(s).

Fair Value Hedges These derivatives are interest rate swaps the Company uses to hedge the change in fair value related to interest rate changes of its underlying available-for-sale investment securities and fixed-rate debt. Changes in the fair value of derivatives designated as fair value hedges, and changes in the fair value of the hedged items, are recorded in earnings.

Cash Flow Hedges These derivatives are interest rate swaps the Company uses to hedge the forecasted cash flows from its underlying variable-rate debt. Changes in the fair value of derivatives designated as cash flow hedges are recorded in other comprehensive income (loss) until the cash flows of the hedged items are realized. If a derivative designated as a

58 U.S. Bancorp

cash flow hedge is terminated or ceases to be highly effective, the gain or loss in other comprehensive income (loss) is amortized to earnings over the period the forecasted hedged transactions impact earnings. If a hedged forecasted transaction is no longer probable, hedge accounting is ceased and any gain or loss included in other comprehensive income (loss) is reported in earnings immediately, unless the forecasted transaction is at least reasonably possible of occurring, whereby the amounts remain within other comprehensive income (loss). At September 30, 2021, the Company had $95 million (net-of-tax) of realized and unrealized losses on derivatives classified as cash flow hedges recorded in other comprehensive income (loss), compared with $189 million (net-of-tax) of realized and unrealized losses at December 31, 2020. The estimated amount to be reclassified from other comprehensive income (loss) into earnings during both the remainder of 2021 and the next 12 months are losses of $1 million (net-of-tax). All cash flow hedges were highly effective for the three and nine months ended September 30, 2021.

Net Investment Hedges The Company uses forward commitments to sell specified amounts of certain foreign currencies, and non-derivative debt instruments, to hedge the volatility of its net investment in foreign operations driven by fluctuations in foreign currency exchange rates. The carrying amount of non-derivative debt instruments designated as net investment hedges was $1.4 billion at September 30, 2021 and December 31, 2020.

Other Derivative Positions The Company enters into free-standing derivatives to mitigate interest rate risk and for other risk management purposes. These derivatives include forward commitments to sell to-be-announced securities (“TBAs”) and other commitments to sell residential mortgage loans, which are used to economically hedge the interest rate risk related to mortgage loans held for sale (“MLHFS”) and unfunded mortgage loan commitments. The Company also enters into interest rate swaps, swaptions, forward commitments to buy TBAs, U.S. Treasury and Eurodollar futures and options on U.S. Treasury futures to economically hedge the change in the fair value of the Company’s MSRs. The Company also enters into foreign currency forwards to economically hedge remeasurement gains and losses the Company recognizes on foreign currency denominated assets and liabilities. In addition, the Company acts as a seller and buyer of interest rate derivatives and foreign exchange contracts for its customers. The Company mitigates the market and liquidity risk associated with these customer derivatives by entering into similar offsetting positions with broker-dealers, or on a portfolio basis by entering into other derivative or non-derivative financial instruments that partially or fully offset the exposure to earnings from these customer-related positions. The Company’s customer derivatives and related hedges are monitored and reviewed by the Company’s Market Risk Committee, which establishes policies for market risk management, including exposure limits for each portfolio. The Company also has derivative contracts that are created through its operations, including certain unfunded mortgage loan commitments and swap agreements related to the sale of a portion of its Class B common and preferred shares of Visa Inc. Refer to Note 15 for further information on these swap agreements.

U.S. Bancorp 59

The following table summarizes the asset and liability management derivative positions of the Company:

	Asset Derivatives						Liability Derivatives
(Dollars in Millions)	Notional Value		Fair Value		Weighted- Average Remaining Maturity In Years		Notional Value		Fair Value		Weighted- Average Remaining Maturity In Years
September 30, 2021
Fair value hedges
Interest rate contracts
Receive fixed/pay floating swaps	$	700	$	—		.04	$	2,250	$	—		3.70
Pay fixed/receive floating swaps		1,330		—		9.23		1,850		—		8.95
Cash flow hedges
Interest rate contracts
Pay fixed/receive floating swaps		—		—		—		250		—		.23
Net investment hedges
Foreign exchange forward contracts		826		7		.06		—		—		—
Other economic hedges
Interest rate contracts
Futures and forwards
Buy		5,325		29		.07		10,347		69		.05
Sell		28,069		139		.29		17,637		57		.14
Options
Purchased		16,930		235		3.34		—		—		—
Written		3,620		78		.09		7,541		241		2.11
Receive fixed/pay floating swaps		4,423		—		4.38		5,690		—		10.29
Pay fixed/receive floating swaps		2,006		—		4.26		4,562		—		4.24
Foreign exchange forward contracts		292		2		.04		275		2		.05
Equity contracts		21		2		.31		184		5		.70
Other (a)		601		9		.02		2,386		147		1.31
Total	$	64,143	$	501			$	52,972	$	521
December 31, 2020
Fair value hedges
Interest rate contracts
Receive fixed/pay floating swaps	$	8,400	$	—		1.76	$	—	$	—		—
Pay fixed/receive floating swaps		—		—		—		100		—		9.63
Cash flow hedges
Interest rate contracts
Pay fixed/receive floating swaps		—		—		—		3,250		—		4.59
Net investment hedges
Foreign exchange forward contracts		479		—		.06		336		3		.06
Other economic hedges
Interest rate contracts
Futures and forwards
Buy		16,431		73		.50		1,925		5		.07
Sell		10,440		48		.04		28,976		157		.07
Options
Purchased		11,610		121		4.11		—		—		—
Written		5,073		202		.13		7,770		198		2.53
Receive fixed/pay floating swaps		11,064		—		7.31		907		—		23.43
Pay fixed/receive floating swaps		78		—		13.68		8,538		—		5.67
Foreign exchange forward contracts		292		1		.04		341		2		.05
Equity contracts		127		3		.39		45		—		.46
Other (a)		47		1		.11		1,832		183		2.44
Total	$	64,041	$	449			$	54,020	$	548

(a) Includes derivative liability swap agreements related to the sale of a portion of the Company’s Class B common and preferred shares of Visa Inc. The Visa swap agreements had a total notional value, fair value and weighted-average remaining maturity of $1.8 billion, $139 million and 1.75 years at September 30, 2021, respectively, compared to $1.8 billion, $182 million and 2.50 years at December 31, 2020, respectively. In addition, includes short-term underwriting purchase and sale commitments with total asset and liability notional values of $602 million at September 30, 2021, and $47 million at December 31, 2020.

60 U.S. Bancorp

The following table summarizes the customer-related derivative positions of the Company:

	Asset Derivatives						Liability Derivatives
(Dollars in Millions)	Notional Value		Fair Value		Weighted- Average Remaining Maturity In Years		Notional Value		Fair Value		Weighted- Average Remaining Maturity In Years
September 30, 2021
Interest rate contracts
Receive fixed/pay floating swaps	$	124,770	$	2,398		4.80	$	46,250	$	296		6.61
Pay fixed/receive floating swaps		47,573		80		6.65		119,027		784		4.51
Other (a)		8,463		1		3.98		7,260		3		4.66
Options
Purchased		85,251		217		1.29		2,701		41		1.86
Written		2,690		41		1.85		79,781		192		1.23
Futures
Buy		3,456		—		.14		318		—		1.97
Sell		2,583		—		1.43		565		—		.45
Foreign exchange rate contracts
Forwards, spots and swaps		38,518		1,112		1.20		39,988		1,121		1.45
Options
Purchased		629		18		.96		—		—		—
Written		—		—		—		629		18		.96
Credit contracts		2,737		—		2.49		6,934		6		4.41
Total	$	316,670	$	3,867			$	303,453	$	2,461
December 31, 2020
Interest rate contracts
Receive fixed/pay floating swaps	$	144,859	$	3,782		4.93	$	12,027	$	99		8.72
Pay fixed/receive floating swaps		15,048		2		8.43		134,963		1,239		4.71
Other (a)		9,921		6		3.75		6,387		3		4.22
Options
Purchased		72,655		111		1.40		1,454		46		2.96
Written		1,736		46		2.76		68,205		81		1.25
Futures
Buy		1,851		—		1.22		924		—		.05
Sell		—		—		—		4,090		—		.72
Foreign exchange rate contracts
Forwards, spots and swaps		44,845		1,590		.96		45,992		1,565		1.13
Options
Purchased		519		14		.90		—		—		—
Written		—		—		—		519		14		.90
Credit contracts		2,876		1		2.75		7,479		7		3.81
Total	$	294,310	$	5,552			$	282,040	$	3,054

(a) Primarily represents floating rate interest rate swaps that pay based on differentials between specified interest rate indexes.

The table below shows the effective portion of the gains (losses) recognized in other comprehensive income (loss) and the gains (losses) reclassified from other comprehensive income (loss) into earnings (net-of-tax):

	Three Months Ended September 30											Nine Months Ended September 30
	Gains (Losses) Recognized in Other Comprehensive Income (Loss)					Gains (Losses) Reclassified from Other Comprehensive Income (Loss) into Earnings						Gains (Losses) Recognized in Other Comprehensive Income (Loss)					Gains (Losses) Reclassified from Other Comprehensive Income (Loss) into Earnings
(Dollars in Millions)	2021		2020			2021			2020			2021		2020			2021			2020
Asset and Liability Management Positions
Cash flow hedges
Interest rate contracts	$	6	$	21		$	(6	)	$	(2	)	$	91	$	(171	)	$	(3	)	$	(5	)
Net investment hedges
Foreign exchange forward contracts		17		(4	)		—			—			16		6			—			—
Non-derivative debt instruments		27		(45	)		—			—			61		(41	)		—			—

Note: The Company does not exclude components from effectiveness testing for cash flow and net investment hedges.

U.S. Bancorp 61

The table below shows the effect of fair value and cash flow hedge accounting on the Consolidated Statement of Income:

	Interest Income					Interest Expense						Interest Income					Interest Expense
	Three Months Ended September 30											Nine Months Ended September 30
(Dollars in Millions)	2021			2020		2021			2020			2021			2020		2021			2020
Total amount of income and expense line items presented in the Consolidated Statement of Income in which the effects of fair value or cash flow hedges are recorded	$	3,409		$	3,573	$	238		$	346		$	10,132		$	11,361	$	761		$	1,711
Asset and Liability Management Positions
Fair value hedges
Interest rate contract derivatives		45			—		112			28			14			—		185			(166	)
Hedged items		(45	)		—		(113	)		(27	)		(15	)		—		(185	)		167
Cash flow hedges
Interest rate contract derivatives		—			—		8			3			—			—		4			7

Note: The Company does not exclude components from effectiveness testing for fair value and cash flow hedges. The Company reclassified losses of $13 million and $40 million into earnings during the three and nine months ended September 30, 2021, respectively, as a result of realized cash flows on discontinued cash flow hedges. The Company reclassified losses of $18 million and $24 million into earnings during the three and nine months ended September 30, 2020, respectively, as a result of realized cash flows on discontinued cash flow hedges. No amounts were reclassified into earnings on discontinued cash flow hedges because it is probable the original hedged forecasted cash flows will not occur. 

The table below shows cumulative hedging adjustments and the carrying amount of assets and liabilities designated in fair value hedges:

	Carrying Amount of the Hedged Assets and Liabilities				Cumulative Hedging Adjustment (a)
(Dollars in Millions)	September 30, 2021		December 31, 2020		September 30, 2021			December 31, 2020
Line Item in the Consolidated Balance Sheet
Available-for-sale investment securities	$	3,127	$	99	$	(22	)	$	(1	)
Long-term debt		2,940		8,567		692			903

(a) The cumulative hedging adjustment related to discontinued hedging relationships on available-for-sale investment securities and long-term debt was $(6) million and $700 million, respectively, at September 30, 2021. The cumulative hedging adjustment related to discontinued hedging relationships on long-term debt was $726 million at December 31, 2020.

The table below shows the gains (losses) recognized in earnings for other economic hedges and the customer-related positions:

	Location of Gains (Losses) Recognized in Earnings		Three Months Ended September 30						Nine Months Ended September 30
(Dollars in Millions)			2021			2020			2021			2020
Asset and Liability Management Positions
Other economic hedges
Interest rate contracts
Futures and forwards		Mortgage banking revenue/ other noninterest income	$	101		$	46		$	432		$	53
Purchased and written options		Mortgage banking revenue		171			428			436			1,173
Swaps		Mortgage banking revenue		(39	)		(51	)		(236	)		724
Foreign exchange forward contracts		Other noninterest income		9			(2	)		(1	)		9
Equity contracts		Compensation expense		1			3			6			—
Other		Other noninterest income		2			(69	)		3			(70	)
Customer-Related Positions
Interest rate contracts
Swaps		Commercial products revenue		26			59			78			103
Purchased and written options		Commercial products revenue		(1	)		(14	)		(4	)		3
Futures		Commercial products revenue		—			—			—			(18	)
Foreign exchange rate contracts
Forwards, spots and swaps		Commercial products revenue		23			20			69			54
Purchased and written options		Commercial products revenue		1			1			1			1
Credit contracts		Commercial products revenue		(1	)		(10	)		(3	)		(15	)

Derivatives are subject to credit risk associated with counterparties to the derivative contracts. The Company measures that credit risk using a credit valuation adjustment and includes it within the fair value of the derivative. The Company manages counterparty credit risk through diversification of its derivative positions among various counterparties, by entering into derivative positions that are centrally cleared through clearinghouses, by entering into master netting arrangements and, where possible, by requiring collateral arrangements. A master netting arrangement allows two counterparties, who have multiple derivative contracts with each other, the ability to net settle amounts under all contracts, including any related collateral, through a single payment and in a single currency. Collateral arrangements generally require the counterparty to deliver collateral (typically cash or U.S. Treasury and agency securities) equal to the Company’s net derivative receivable, subject to minimum transfer and credit rating requirements.

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The Company’s collateral arrangements are predominately bilateral and, therefore, contain provisions that require collateralization of the Company’s net liability derivative positions. Required collateral coverage is based on net liability thresholds and may be contingent upon the Company’s credit rating from two of the nationally recognized statistical rating organizations. If the Company’s credit rating were to fall below credit ratings thresholds established in the collateral arrangements, the counterparties to the derivatives could request immediate additional collateral coverage up to and including full collateral coverage for derivatives in a net liability position. The aggregate fair value of all derivatives under collateral arrangements that were in a net liability position at September 30, 2021, was $874 million. At September 30, 2021, the Company had $589 million of cash posted as collateral against this net liability position.

 Note 14 Netting Arrangements for Certain Financial Instruments and Securities Financing Activities

The Company’s derivative portfolio consists of bilateral over-the-counter trades, certain interest rate derivatives and credit contracts required to be centrally cleared through clearinghouses per current regulations, and exchange-traded positions which may include U.S. Treasury and Eurodollar futures or options on U.S. Treasury futures. Of the Company’s $737.2 billion total notional amount of derivative positions at September 30, 2021, $384.1 billion related to bilateral over-the-counter trades, $331.5 billion related to those centrally cleared through clearinghouses and $21.6 billion related to those that were exchange-traded. The Company’s derivative contracts typically include offsetting rights (referred to as netting arrangements), and depending on expected volume, credit risk, and counterparty preference, collateral maintenance may be required. For all derivatives under collateral support arrangements, fair value is determined daily and, depending on the collateral maintenance requirements, the Company and a counterparty may receive or deliver collateral, based upon the net fair value of all derivative positions between the Company and the counterparty. Collateral is typically cash, but securities may be allowed under collateral arrangements with certain counterparties. Receivables and payables related to cash collateral are included in other assets and other liabilities on the Consolidated Balance Sheet, along with the related derivative asset and liability fair values. Any securities pledged to counterparties as collateral remain on the Consolidated Balance Sheet. Securities received from counterparties as collateral are not recognized on the Consolidated Balance Sheet, unless the counterparty defaults. In general, securities used as collateral can be sold, repledged or otherwise used by the party in possession. No restrictions exist on the use of cash collateral by either party. Refer to Note 13 for further discussion of the Company’s derivatives, including collateral arrangements.

As part of the Company’s treasury and broker-dealer operations, the Company executes transactions that are treated as securities sold under agreements to repurchase or securities purchased under agreements to resell, both of which are accounted for as collateralized financings. Securities sold under agreements to repurchase include repurchase agreements and securities loaned transactions. Securities purchased under agreements to resell include reverse repurchase agreements and securities borrowed transactions. For securities sold under agreements to repurchase, the Company records a liability for the cash received, which is included in short-term borrowings on the Consolidated Balance Sheet. For securities purchased under agreements to resell, the Company records a receivable for the cash paid, which is included in other assets on the Consolidated Balance Sheet.

Securities transferred to counterparties under repurchase agreements and securities loaned transactions continue to be recognized on the Consolidated Balance Sheet, are measured at fair value, and are included in investment securities or other assets. Securities received from counterparties under reverse repurchase agreements and securities borrowed transactions are not recognized on the Consolidated Balance Sheet unless the counterparty defaults. The securities transferred under repurchase and reverse repurchase transactions typically are U.S. Treasury and agency securities, residential agency mortgage-backed securities or corporate debt securities. The securities loaned or borrowed typically are corporate debt securities traded by the Company’s broker-dealer subsidiary. In general, the securities transferred can be sold, repledged or otherwise used by the party in possession. No restrictions exist on the use of cash collateral by either party. Repurchase/reverse repurchase and securities loaned/borrowed transactions expose the Company to counterparty risk. The Company manages this risk by performing assessments, independent of business line managers, and establishing concentration limits on each counterparty. Additionally, these transactions include collateral arrangements that require the fair values of the underlying securities to be determined daily, resulting in cash being obtained or refunded to counterparties to maintain specified collateral levels.

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The following table summarizes the maturities by category of collateral pledged for repurchase agreements and securities loaned transactions:

(Dollars in Millions)	Overnight and Continuous		Less Than 30 Days		30-89 Days		Greater Than 90 Days		Total
September 30, 2021
Repurchase agreements
U.S. Treasury and agencies	$	568	$	–	$	–	$	–	$	568
Residential agency mortgage-backed securities		838		–		–		–		838
Corporate debt securities		692		–		–		–		692
Total repurchase agreements		2,098		–		–		–		2,098
Securities loaned
Corporate debt securities		166		–		–		–		166
Total securities loaned		166		–		–		–		166
Gross amount of recognized liabilities	$	2,264	$	–	$	–	$	–	$	2,264
December 31, 2020
Repurchase agreements
U.S. Treasury and agencies	$	472	$	–	$	–	$	–	$	472
Residential agency mortgage-backed securities		398		–		–		–		398
Corporate debt securities		560		–		–		–		560
Total repurchase agreements		1,430		–		–		–		1,430
Securities loaned
Corporate debt securities		218		–		–		–		218
Total securities loaned		218		–		–		–		218
Gross amount of recognized liabilities	$	1,648	$	–	$	–	$	–	$	1,648

The Company executes its derivative, repurchase/reverse repurchase and securities loaned/borrowed transactions under the respective industry standard agreements. These agreements include master netting arrangements that allow for multiple contracts executed with the same counterparty to be viewed as a single arrangement. This allows for net settlement of a single amount on a daily basis. In the event of default, the master netting arrangement provides for close-out netting, which allows all of these positions with the defaulting counterparty to be terminated and net settled with a single payment amount.

The Company has elected to offset the assets and liabilities under netting arrangements for the balance sheet presentation of the majority of its derivative counterparties. The netting occurs at the counterparty level, and includes all assets and liabilities related to the derivative contracts, including those associated with cash collateral received or delivered. The Company has not elected to offset the assets and liabilities under netting arrangements for the balance sheet presentation of repurchase/reverse repurchase and securities loaned/borrowed transactions.

The following tables provide information on the Company’s netting adjustments, and items not offset on the Consolidated Balance Sheet but available for offset in the event of default:

(Dollars in Millions)	Gross Recognized Assets		Gross Amounts Offset on the Consolidated Balance Sheet (a)			Net Amounts Presented on the Consolidated Balance Sheet		Gross Amounts Not Offset on the Consolidated Balance Sheet						Net Amount
								Financial Instruments (b)			Collateral Received (c)
September 30, 2021
Derivative assets (d)	$	4,275	$	(1,858	)	$	2,417	$	(104	)	$	(141	)	$	2,172
Reverse repurchase agreements		418		–			418		(317	)		(101	)		–
Securities borrowed		1,978		–			1,978		–			(1,925	)		53
Total	$	6,671	$	(1,858	)	$	4,813	$	(421	)	$	(2,167	)	$	2,225
December 31, 2020
Derivative assets (d)	$	5,744	$	(1,874	)	$	3,870	$	(109	)	$	(287	)	$	3,474
Reverse repurchase agreements		377		–			377		(262	)		(115	)		–
Securities borrowed		1,716		–			1,716		–			(1,670	)		46
Total	$	7,837	$	(1,874	)	$	5,963	$	(371	)	$	(2,072	)	$	3,520

(a) Includes $750 million and $898 million of cash collateral related payables that were netted against derivative assets at September 30, 2021 and December 31, 2020, respectively.

(b) For derivative assets this includes any derivative liability fair values that could be offset in the event of counterparty default; for reverse repurchase agreements this includes any repurchase agreement payables that could be offset in the event of counterparty default; for securities borrowed this includes any securities loaned payables that could be offset in the event of counterparty default.

(c) Includes the fair value of securities received by the Company from the counterparty. These securities are not included on the Consolidated Balance Sheet unless the counterparty defaults.

(d) Excludes $93 million and $257 million at September 30, 2021 and December 31, 2020, respectively, of derivative assets not subject to netting arrangements.

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(Dollars in Millions)	Gross Recognized Liabilities		Gross Amounts Offset on the Consolidated Balance Sheet (a)			Net Amounts Presented on the Consolidated Balance Sheet		Gross Amounts Not Offset on the Consolidated Balance Sheet						Net Amount
								Financial Instruments (b)			Collateral Pledged (c)
September 30, 2021
Derivative liabilities (d)	$	2,809	$	(1,697	)	$	1,112	$	(104	)	$	–		$	1,008
Repurchase agreements		2,098		–			2,098		(317	)		(1,779	)		2
Securities loaned		166		–			166		–			(164	)		2
Total	$	5,073	$	(1,697	)	$	3,376	$	(421	)	$	(1,943	)	$	1,012
December 31, 2020
Derivative liabilities (d)	$	3,419	$	(2,312	)	$	1,107	$	(109	)	$	–		$	998
Repurchase agreements		1,430		–			1,430		(262	)		(1,168	)		–
Securities loaned		218		–			218		–			(215	)		3
Total	$	5,067	$	(2,312	)	$	2,755	$	(371	)	$	(1,383	)	$	1,001

(a) Includes $589 million and $1.3 billion of cash collateral related receivables that were netted against derivative liabilities at September 30, 2021 and December 31, 2020, respectively.

(b) For derivative liabilities this includes any derivative asset fair values that could be offset in the event of counterparty default; for repurchase agreements this includes any reverse repurchase agreement receivables that could be offset in the event of counterparty default; for securities loaned this includes any securities borrowed receivables that could be offset in the event of counterparty default.

(c) Includes the fair value of securities pledged by the Company to the counterparty. These securities are included on the Consolidated Balance Sheet unless the Company defaults.

(d) Excludes $173 million and $183 million at September 30, 2021 and December 31, 2020, respectively, of derivative liabilities not subject to netting arrangements.

 Note 15    Fair Values of Assets and Liabilities

The Company uses fair value measurements for the initial recording of certain assets and liabilities, periodic remeasurement of certain assets and liabilities, and disclosures. Derivatives, trading and available-for-sale investment securities, MSRs and substantially all MLHFS are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as loans held for sale, loans held for investment and certain other assets. These nonrecurring fair value adjustments typically involve application of lower-of-cost-or-fair value accounting or impairment write-downs of individual assets.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value measurement reflects all of the assumptions that market participants would use in pricing the asset or liability, including assumptions about the risk inherent in a particular valuation technique, the effect of a restriction on the sale or use of an asset and the risk of nonperformance.

The Company groups its assets and liabilities measured at fair value into a three-level hierarchy for valuation techniques used to measure financial assets and financial liabilities at fair value. This hierarchy is based on whether the valuation inputs are observable or unobservable. These levels are:

• Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 1 includes U.S. Treasury securities, as well as exchange-traded instruments.

• Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 includes debt securities that are traded less frequently than exchange-traded instruments and which are typically valued using third party pricing services; derivative contracts and other assets and liabilities, including securities, whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data; and MLHFS whose values are determined using quoted prices for similar assets or pricing models with inputs that are observable in the market or can be corroborated by observable market data.

• Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category includes MSRs and certain derivative contracts.

Valuation Methodologies

The valuation methodologies used by the Company to measure financial assets and liabilities at fair value are described below. In addition, the following section includes an indication of the level of the fair value hierarchy in which the

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assets or liabilities are classified. Where appropriate, the descriptions include information about the valuation models and key inputs to those models. During the nine months ended September 30, 2021 and 2020, there were no significant changes to the valuation techniques used by the Company to measure fair value.

Available-For-Sale Investment Securities When quoted market prices for identical securities are available in an active market, these prices are used to determine fair value and these securities are classified within Level 1 of the fair value hierarchy. Level 1 investment securities include U.S. Treasury and exchange-traded securities.

For other securities, quoted market prices may not be readily available for the specific securities. When possible, the Company determines fair value based on market observable information, including quoted market prices for similar securities, inactive transaction prices, and broker quotes. These securities are classified within Level 2 of the fair value hierarchy. Level 2 valuations are generally provided by a third party pricing service. Level 2 investment securities are predominantly agency mortgage-backed securities, certain other asset-backed securities, obligations of state and political subdivisions and agency debt securities.

Mortgage Loans Held For Sale MLHFS measured at fair value, for which an active secondary market and readily available market prices exist, are initially valued at the transaction price and are subsequently valued by comparison to instruments with similar collateral and risk profiles. MLHFS are classified within Level 2. Included in mortgage banking revenue was a net loss of $18 million and a net gain of $97 million for the three months ended September 30, 2021 and 2020, respectively, and a net loss of $135 million and a net gain of $271 million for the nine months ended September 30, 2021 and 2020, respectively, from the changes to fair value of these MLHFS under fair value option accounting guidance. Changes in fair value due to instrument specific credit risk were immaterial. Interest income for MLHFS is measured based on contractual interest rates and reported as interest income on the Consolidated Statement of Income. Electing to measure MLHFS at fair value reduces certain timing differences and better matches changes in fair value of these assets with changes in the value of the derivative instruments used to economically hedge them without the burden of complying with the requirements for hedge accounting.

Mortgage Servicing Rights MSRs are valued using a discounted cash flow methodology, and are classified within Level 3. The Company determines fair value of the MSRs by projecting future cash flows for different interest rate scenarios using prepayment rates and other assumptions, and discounts these cash flows using a risk adjusted rate based on option adjusted spread levels. There is minimal observable market activity for MSRs on comparable portfolios and, therefore, the determination of fair value requires significant management judgment. Refer to Note 7 for further information on MSR valuation assumptions.

Derivatives The majority of derivatives held by the Company are executed over-the-counter or centrally cleared through clearinghouses and are valued using market standard cash flow valuation techniques. The models incorporate inputs, depending on the type of derivative, including interest rate curves, foreign exchange rates and volatility. All derivative values incorporate an assessment of the risk of counterparty nonperformance, measured based on the Company’s evaluation of credit risk including external assessments of credit risk. The Company monitors and manages its nonperformance risk by considering its ability to net derivative positions under master netting arrangements, as well as collateral received or provided under collateral arrangements. Accordingly, the Company has elected to measure the fair value of derivatives, at a counterparty level, on a net basis. The majority of the derivatives are classified within Level 2 of the fair value hierarchy, as the significant inputs to the models, including nonperformance risk, are observable. However, certain derivative transactions are with counterparties where risk of nonperformance cannot be observed in the market and, therefore, the credit valuation adjustments result in these derivatives being classified within Level 3 of the fair value hierarchy.

The Company also has other derivative contracts that are created through its operations, including commitments to purchase and originate mortgage loans and swap agreements executed in conjunction with the sale of a portion of its Class B common and preferred shares of Visa Inc. (the “Visa swaps”). The mortgage loan commitments are valued by pricing models that include market observable and unobservable inputs, which result in the commitments being classified within Level 3 of the fair value hierarchy. The unobservable inputs include assumptions about the percentage of commitments that actually become a closed loan and the MSR value that is inherent in the underlying loan value. The Visa swaps require payments by either the Company or the purchaser of the Visa Inc. Class B common and preferred shares when there are changes in the conversion rate of the Visa Inc. Class B common and preferred shares to Visa Inc. Class A common and preferred shares, respectively, as well as quarterly payments to the purchaser based on specified terms of the agreements. Management reviews and updates the Visa swaps fair value in conjunction with its

66 U.S. Bancorp

review of Visa Inc. related litigation contingencies, and the associated escrow funding. The expected litigation resolution impacts the Visa Inc. Class B common share to Visa Inc. Class A common share conversion rate, as well as the ultimate termination date for the Visa swaps. Accordingly, the Visa swaps are classified within Level 3. Refer to Note 16 for further information on the Visa Inc. restructuring and related card association litigation.

Significant Unobservable Inputs of Level 3 Assets and Liabilities

The following section provides information to facilitate an understanding of the uncertainty in the fair value measurements for the Company’s Level 3 assets and liabilities recorded at fair value on the Consolidated Balance Sheet. This section includes a description of the significant inputs used by the Company and a description of any interrelationships between these inputs. The discussion below excludes nonrecurring fair value measurements of collateral value used for impairment measures for loans and OREO. These valuations utilize third party appraisal or broker price opinions, and are classified as Level 3 due to the significant judgment involved.

Mortgage Servicing Rights The significant unobservable inputs used in the fair value measurement of the Company’s MSRs are expected prepayments and the option adjusted spread that is added to the risk-free rate to discount projected cash flows. Significant increases in either of these inputs in isolation would have resulted in a significantly lower fair value measurement. Significant decreases in either of these inputs in isolation would have resulted in a significantly higher fair value measurement. There is no direct interrelationship between prepayments and option adjusted spread. Prepayment rates generally move in the opposite direction of market interest rates. Option adjusted spread is generally impacted by changes in market return requirements.

The following table shows the significant valuation assumption ranges for MSRs at September 30, 2021:

	Minimum			Maximum			Weighted- Average (a)
Expected prepayment		3	%		13	%		10	%
Option adjusted spread		6			11			7

(a) Determined based on the relative fair value of the related mortgage loans serviced.

Derivatives The Company has two distinct Level 3 derivative portfolios: (i) the Company’s commitments to purchase and originate mortgage loans that meet the requirements of a derivative and (ii) the Company’s asset/liability and customer-related derivatives that are Level 3 due to unobservable inputs related to measurement of risk of nonperformance by the counterparty. In addition, the Company’s Visa swaps are classified within Level 3.

The significant unobservable inputs used in the fair value measurement of the Company’s derivative commitments to purchase and originate mortgage loans are the percentage of commitments that actually become a closed loan and the MSR value that is inherent in the underlying loan value. A significant increase in the rate of loans that close would have resulted in a larger derivative asset or liability. A significant increase in the inherent MSR value would have resulted in an increase in the derivative asset or a reduction in the derivative liability. Expected loan close rates and the inherent MSR values are directly impacted by changes in market rates and will generally move in the same direction as interest rates.

The following table shows the significant valuation assumption ranges for the Company’s derivative commitments to purchase and originate mortgage loans at September 30, 2021:

	Minimum			Maximum			Weighted- Average (a)
Expected loan close rate		1	%		100	%		76	%
Inherent MSR value (basis points per loan)		47			187			121

(a) Determined based on the relative fair value of the related mortgage loans.

The significant unobservable input used in the fair value measurement of certain of the Company’s asset/liability and customer-related derivatives is the credit valuation adjustment related to the risk of counterparty nonperformance. A significant increase in the credit valuation adjustment would have resulted in a lower fair value measurement. A significant decrease in the credit valuation adjustment would have resulted in a higher fair value measurement. The credit valuation adjustment is impacted by changes in market rates, volatility, market implied credit spreads, and loss recovery rates, as well as the Company’s assessment of the counterparty’s credit position. At September 30, 2021, the minimum, maximum and weighted-average credit valuation adjustment as a percentage of the net fair value of the counterparty’s derivative contracts prior to adjustment was 0 percent, 97 percent and 2 percent, respectively.

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The significant unobservable inputs used in the fair value measurement of the Visa swaps are management’s estimate of the probability of certain litigation scenarios occurring, and the timing of the resolution of the related litigation loss estimates in excess, or shortfall, of the Company’s proportional share of escrow funds. An increase in the loss estimate or a delay in the resolution of the related litigation would have resulted in an increase in the derivative liability. A decrease in the loss estimate or an acceleration of the resolution of the related litigation would have resulted in a decrease in the derivative liability.

The following table summarizes the balances of assets and liabilities measured at fair value on a recurring basis:

(Dollars in Millions)	Level 1		Level 2		Level 3		Netting			Total
September 30, 2021
Available-for-sale securities
U.S. Treasury and agencies	$	14,344	$	4,147	$	–	$	–		$	18,491
Mortgage-backed securities
Residential agency		–		112,796		–		–			112,796
Commercial agency		–		7,686		–		–			7,686
Asset-backed securities		–		61		8		–			69
Obligations of state and political subdivisions		–		10,326		1		–			10,327
Other		–		7		–		–			7
Total available-for-sale		14,344		135,023		9		–			149,376
Mortgage loans held for sale		–		6,176		–		–			6,176
Mortgage servicing rights		–		–		2,910		–			2,910
Derivative assets		6		2,691		1,671		(1,858	)		2,510
Other assets		322		2,118		–		–			2,440
Total	$	14,672	$	146,008	$	4,590	$	(1,858	)	$	163,412
Derivative liabilities	$	–	$	2,429	$	553	$	(1,697	)	$	1,285
Short-term borrowings and other liabilities (a)		205		1,893		–		–			2,098
Total	$	205	$	4,322	$	553	$	(1,697	)	$	3,383
December 31, 2020
Available-for-sale securities
U.S. Treasury and agencies	$	19,251	$	3,140	$	–	$	–		$	22,391
Mortgage-backed securities
Residential agency		–		99,968		–		–			99,968
Commercial agency		–		5,406		–		–			5,406
Asset-backed securities		–		198		7		–			205
Obligations of state and political subdivisions		–		8,860		1		–			8,861
Other		–		9		–		–			9
Total available-for-sale		19,251		117,581		8		–			136,840
Mortgage loans held for sale		–		8,524		–		–			8,524
Mortgage servicing rights		–		–		2,210		–			2,210
Derivative assets		4		3,235		2,762		(1,874	)		4,127
Other assets		302		1,601		–		–			1,903
Total	$	19,557	$	130,941	$	4,980	$	(1,874	)	$	153,604
Derivative liabilities	$	–	$	3,166	$	436	$	(2,312	)	$	1,290
Short-term borrowings and other liabilities (a)		85		1,672		–		–			1,757
Total	$	85	$	4,838	$	436	$	(2,312	)	$	3,047

Note: Excluded from the table above are equity investments without readily determinable fair values. The Company has elected to carry these investments at historical cost, adjusted for impairment and any changes resulting from observable price changes for identical or similar investments of the issuer. The aggregate carrying amount of these equity investments was $73 million and $85 million at September 30, 2021 and December 31, 2020, respectively. The Company has not recorded impairments or adjustments for observable price changes on these equity investments during the first nine months of 2021 and 2020, or on a cumulative basis.

(a) Primarily represents the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.

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The following table presents the changes in fair value for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended September 30:

(Dollars in Millions)	Beginning of Period Balance		Net Gains (Losses) Included in Net Income			Net Gains (Losses) Included in Other Comprehensive Income (Loss)		Purchases		Sales			Principal Payments		Issuances			Settlements			End of Period Balance		Net Change in Unrealized Gains (Losses) Relating to Assets and Liabilities Held at End of Period
2021
Available-for-sale securities
Asset-backed securities	$	8	$	–		$	–	$	–	$	–		$	–	$	–		$	–		$	8	$	–
Obligations of state and political subdivisions		1		–			–		–		–			–		–			–			1		–
Total available-for-sale		9		–			–		–		–			–		–			–			9		–
Mortgage servicing rights		2,713		(96	) (a)		–		9		–			–		284	(c)		–			2,910		(96	) (a)
Net derivative assets and liabilities		1,500		(225	) (b)		–		106		(1	)		–		–			(262	)		1,118		(203	) (d)
2020
Available-for-sale securities
Asset-backed securities	$	7	$	–		$	–	$	–	$	–		$	–	$	–		$	–		$	7	$	–
Obligations of state and political subdivisions		1		–			–		–		–			–		–			–			1		–
Total available-for-sale		8		–			–		–		–			–		–			–			8		–
Mortgage servicing rights		1,840		(192	) (a)		–		8		1			–		321	(c)		–			1,978		(192	) (a)
Net derivative assets and liabilities		2,841		211	(e)		–		152		(1	)		–		–			(579	)		2,624		228	(f)

(a) Included in mortgage banking revenue.

(b) Approximately $208 million, $(434) million and $1 million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

(c) Represents MSRs capitalized during the period.

(d) Approximately $57 million, $(261) million and $1 million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

(e) Approximately $508 million, $(228) million and $(69) million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

(f) Approximately $291 million, $6 million and $(69) million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

The following table presents the changes in fair value for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months ended September 30:

(Dollars in Millions)	Beginning of Period Balance		Net Gains (Losses) Included in Net Income			Net Gains (Losses) Included in Other Comprehensive Income (Loss)		Purchases		Sales			Principal Payments			Issuances			Settlements			End of Period Balance		Net Change in Unrealized Gains (Losses) Relating to Assets and Liabilities Held at End of Period
2021
Available-for-sale securities
Asset-backed securities	$	7	$	–		$	1	$	–	$	–		$	–		$	–		$	–		$	8	$	1
Obligations of state and political subdivisions		1		–			–		–		–			–			–			–			1		–
Total available-for-sale		8		–			1		–		–			–			–			–			9		1
Mortgage servicing rights		2,210		(233	) (a)		–		36		1			–			896	(c)		–			2,910		(233	) (a)
Net derivative assets and liabilities		2,326		(604	) (b)		–		166		(2	)		–			–			(768	)		1,118		(761	) (d)
2020
Available-for-sale securities
Asset-backed securities	$	8	$	–		$	–	$	–	$	–		$	(1	)	$	–		$	–		$	7	$	–
Obligations of state and political subdivisions		1		–			–		–		–			–			–			–			1		–
Total available-for-sale		9		–			–		–		–			(1	)		–			–			8		–
Mortgage servicing rights		2,546		(1,299	) (a)		–		16		3			–			712	(c)		–			1,978		(1,299	) (a)
Net derivative assets and liabilities		810		2,685	(e)		–		247		(2	)		–			–			(1,116	)		2,624		1,888	(f)

(a) Included in mortgage banking revenue.

(b) Approximately $544 million, $(1.2) billion and $2 million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

(c) Represents MSRs capitalized during the period.

(d) Approximately $57 million, $(820) million and $2 million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

(e) Approximately $1.5 billion, $1.3 billion and $(70) million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

(f) Approximately $291 million, $1.7 billion and $(70) million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

The Company is also required periodically to measure certain other financial assets at fair value on a nonrecurring basis. These measurements of fair value usually result from the application of lower-of-cost-or-fair value accounting or write-downs of individual assets.

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The following table summarizes the balances as of the measurement date of assets measured at fair value on a nonrecurring basis, and still held as of the reporting date:

	September 30, 2021								December 31, 2020
(Dollars in Millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Loans (a)	$	–	$	–	$	65	$	65	$	–	$	–	$	385	$	385
Other assets (b)		–		–		67		67		–		–		30		30

(a) Represents the carrying value of loans for which adjustments were based on the fair value of the collateral, excluding loans fully charged-off.

(b) Primarily represents the fair value of foreclosed properties that were measured at fair value based on an appraisal or broker price opinion of the collateral subsequent to their initial acquisition.

The following table summarizes losses recognized related to nonrecurring fair value measurements of individual assets or portfolios:

	Three Months Ended September 30				Nine Months Ended September 30
(Dollars in Millions)	2021		2020		2021		2020
Loans (a)	$	15	$	184	$	58	$	244
Other assets (b)		1		13		7		19

(a) Represents write-downs of loans which were based on the fair value of the collateral, excluding loans fully charged-off.

(b) Primarily represents related losses of foreclosed properties that were measured at fair value subsequent to their initial acquisition.

Fair Value Option

The following table summarizes the differences between the aggregate fair value carrying amount of MLHFS for which the fair value option has been elected and the aggregate unpaid principal amount that the Company is contractually obligated to receive at maturity:

	September 30, 2021						December 31, 2020
(Dollars in Millions)	Fair Value Carrying Amount		Aggregate Unpaid Principal		Carrying Amount Over (Under) Unpaid Principal		Fair Value Carrying Amount		Aggregate Unpaid Principal		Carrying Amount Over (Under) Unpaid Principal
Total loans	$	6,176	$	6,017	$	159	$	8,524	$	8,136	$	388
Nonaccrual loans		1		1		–		1		1		–
Loans 90 days or more past due		1		1		–		2		2		–

Fair Value of Financial Instruments

The following section summarizes the estimated fair value for financial instruments accounted for at amortized cost as of September 30, 2021 and December 31, 2020. In accordance with disclosure guidance related to fair values of financial instruments, the Company did not include assets and liabilities that are not financial instruments, such as the value of goodwill, long-term relationships with deposit, credit card, merchant processing and trust customers, other purchased intangibles, premises and equipment, deferred taxes and other liabilities. Additionally, in accordance with the disclosure guidance, receivables and payables due in one year or less, insurance contracts, equity investments not accounted for at fair value, and deposits with no defined or contractual maturities are excluded.

The estimated fair values of the Company’s financial instruments are shown in the table below:

	September 30, 2021										December 31, 2020
	Carrying Amount		Fair Value								Carrying Amount		Fair Value
(Dollars in Millions)			Level 1		Level 2		Level 3		Total				Level 1		Level 2		Level 3		Total
Financial Assets
Cash and due from banks	$	63,904	$	63,904	$	–	$	–	$	63,904	$	62,580	$	62,580	$	–	$	–	$	62,580
Federal funds sold and securities purchased under resale agreements		440		–		440		–		440		377		–		377		–		377
Loans held for sale (a)		15		–		–		15		15		237		–		–		237		237
Loans		291,816		–		–		298,764		298,764		290,393		–		–		300,419		300,419
Other (b)		1,472		–		630		842		1,472		1,772		–		731		1,041		1,772
Financial Liabilities
Time deposits		22,879		–		22,946		–		22,946		30,694		–		30,864		–		30,864
Short-term borrowings (c)		13,990		–		13,894		–		13,894		10,009		–		9,956		–		9,956
Long-term debt		35,671		–		36,262		–		36,262		41,297		–		42,485		–		42,485
Other (d)		3,972		–		1,114		2,858		3,972		4,052		–		1,234		2,818		4,052

(a) Excludes mortgages held for sale for which the fair value option under applicable accounting guidance was elected.

(b) Includes investments in Federal Reserve Bank and Federal Home Loan Bank stock and tax-advantaged investments.

(c) Excludes the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.

(d) Includes operating lease liabilities and liabilities related to tax-advantaged investments.

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The fair value of unfunded commitments, deferred non-yield related loan fees, standby letters of credit and other guarantees is approximately equal to their carrying value. The carrying value of unfunded commitments, deferred non-yield related loan fees and standby letters of credit was $577 million and $774 million at September 30, 2021 and December 31, 2020, respectively. The carrying value of other guarantees was $278 million and $362 million at September 30, 2021 and December 31, 2020, respectively.

 Note 16    Guarantees and Contingent Liabilities

Visa Restructuring and Card Association Litigation The Company’s payment services business issues credit and debit cards and acquires credit and debit card transactions through the Visa U.S.A. Inc. card association or its affiliates (collectively “Visa”). In 2007, Visa completed a restructuring and issued shares of Visa Inc. common stock to its financial institution members in contemplation of its initial public offering (“IPO”) completed in the first quarter of 2008 (the “Visa Reorganization”). As a part of the Visa Reorganization, the Company received its proportionate number of shares of Visa Inc. common stock, which were subsequently converted to Class B shares of Visa Inc. (“Class B shares”).

Visa U.S.A. Inc. (“Visa U.S.A.”) and MasterCard International (collectively, the “Card Brands”) are defendants in antitrust lawsuits challenging the practices of the Card Brands (the “Visa Litigation”). Visa U.S.A. member banks have a contingent obligation to indemnify Visa Inc. under the Visa U.S.A. bylaws (which were modified at the time of the restructuring in October 2007) for potential losses arising from the Visa Litigation. The indemnification by the Visa U.S.A. member banks has no specific maximum amount. Using proceeds from its IPO and through reductions to the conversion ratio applicable to the Class B shares held by Visa U.S.A. member banks, Visa Inc. has funded an escrow account for the benefit of member financial institutions to fund their indemnification obligations associated with the Visa Litigation. The receivable related to the escrow account is classified in other liabilities as a direct offset to the related Visa Litigation contingent liability.

In October 2012, Visa signed a settlement agreement to resolve class action claims associated with the multidistrict interchange litigation pending in the United States District Court for the Eastern District of New York (the “Multi-District Litigation”). The U.S. Court of Appeals for the Second Circuit reversed the approval of that settlement and remanded the matter to the district court. Thereafter, the case was split into two putative class actions, one seeking damages (the “Damages Action”) and a separate class action seeking injunctive relief only (the “Injunctive Action”). In September 2018, Visa signed a new settlement agreement, superseding the original settlement agreement, to resolve the Damages Action. The Damages Action settlement was approved by the United States District Court for the Eastern District of New York, but is now on appeal. The Injunctive Action, which generally seeks changes to Visa rules, is still pending.

Other Guarantees and Contingent Liabilities

The following table is a summary of other guarantees and contingent liabilities of the Company at September 30, 2021:

(Dollars in Millions)	Collateral Held		Carrying Amount		Maximum Potential Future Payments
Standby letters of credit	$	–	$	60	$	9,556
Third party borrowing arrangements		–		–		4
Securities lending indemnifications		10,479		–		10,157
Asset sales		–		84		6,793	(a)
Merchant processing		827		172		121,902
Tender option bond program guarantee		1,719		–		1,490
Other		–		22		1,532

(a) The maximum potential future payments do not include loan sales where the Company provides standard representation and warranties to the buyer against losses related to loan underwriting documentation defects that may have existed at the time of sale that generally are identified after the occurrence of a triggering event such as delinquency. For these types of loan sales, the maximum potential future payments is generally the unpaid principal balance of loans sold measured at the end of the current reporting period. Actual losses will be significantly less than the maximum exposure, as only a fraction of loans sold will have a representation and warranty breach, and any losses on repurchase would generally be mitigated by any collateral held against the loans.

Merchant Processing The Company, through its subsidiaries, provides merchant processing services. Under the rules of credit card associations, a merchant processor retains a contingent liability for credit card transactions processed. This contingent liability arises in the event of a billing dispute between the merchant and a cardholder that is ultimately resolved in the cardholder’s favor. In this situation, the transaction is “charged-back” to the merchant and the disputed

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amount is credited or otherwise refunded to the cardholder. If the Company is unable to collect this amount from the merchant, it bears the loss for the amount of the refund paid to the cardholder.

The Company currently processes card transactions in the United States, Canada and Europe through wholly-owned subsidiaries. In the event a merchant was unable to fulfill product or services subject to future delivery, such as airline tickets, the Company could become financially liable for refunding the purchase price of such products or services purchased through the credit card associations under the charge-back provisions. Charge-back risk related to these merchants is evaluated in a manner similar to credit risk assessments and, as such, merchant processing contracts contain various provisions to protect the Company in the event of default. At September 30, 2021, the value of airline tickets purchased to be delivered at a future date through card transactions processed by the Company was $7.2 billion. The Company held collateral of $653 million in escrow deposits, letters of credit and indemnities from financial institutions, and liens on various assets. In addition to specific collateral or other credit enhancements, the Company maintains a liability for its implied guarantees associated with future delivery. At September 30, 2021, the liability was $155 million primarily related to these airline processing arrangements.

Asset Sales The Company regularly sells loans to GSEs as part of its mortgage banking activities. The Company provides customary representations and warranties to GSEs in conjunction with these sales. These representations and warranties generally require the Company to repurchase assets if it is subsequently determined that a loan did not meet specified criteria, such as a documentation deficiency or rescission of mortgage insurance. If the Company is unable to cure or refute a repurchase request, the Company is generally obligated to repurchase the loan or otherwise reimburse the GSE for losses. At September 30, 2021, the Company had reserved $18 million for potential losses from representation and warranty obligations, compared with $19 million at December 31, 2020. The Company’s reserve reflects management’s best estimate of losses for representation and warranty obligations. The Company’s repurchase reserve is modeled at the loan level, taking into consideration the individual credit quality and borrower activity that has transpired since origination. The model applies credit quality and economic risk factors to derive a probability of default and potential repurchase that are based on the Company’s historical loss experience, and estimates loss severity based on expected collateral value. The Company also considers qualitative factors that may result in anticipated losses differing from historical loss trends.

As of September 30, 2021 and December 31, 2020, the Company had $14 million and $13 million, respectively, of unresolved representation and warranty claims from GSEs. The Company does not have a significant amount of unresolved claims from investors other than GSEs.

Litigation and Regulatory Matters

The Company is subject to various litigation and regulatory matters that arise in the ordinary course of its business. The Company establishes reserves for such matters when potential losses become probable and can be reasonably estimated. The Company believes the ultimate resolution of existing legal and regulatory matters will not have a material adverse effect on the financial condition, results of operations or cash flows of the Company. However, in light of the uncertainties inherent in these matters, it is possible that the ultimate resolution of one or more of these matters may have a material adverse effect on the Company’s results from operations for a particular period, and future changes in circumstances or additional information could result in additional accruals or resolution in excess of established accruals, which could adversely affect the Company’s results from operations, potentially materially.

Residential Mortgage-Backed Securities Litigation Starting in 2011, the Company and other large financial institutions have been sued in their capacity as trustee for residential mortgage—backed securities trusts. In the lawsuits brought against the Company, the investors allege that the Company’s banking subsidiary, U.S. Bank National Association (“U.S. Bank”), as trustee caused them to incur substantial losses by failing to enforce loan repurchase obligations and failing to abide by appropriate standards of care after events of default allegedly occurred. The plaintiffs in these matters seek monetary damages in unspecified amounts and most also seek equitable relief.

Regulatory Matters The Company is continually subject to examinations, inquiries and investigations in areas of heightened regulatory scrutiny, such as compliance, risk management, third-party risk management and consumer protection. For example, the Consumer Financial Protection Bureau (“CFPB”) is investigating certain of the Company’s consumer sales practices, and the Company has responded and continues to respond to the CFPB. The Company is cooperating fully with all pending examinations, inquiries and investigations, any of which could lead to administrative or legal proceedings or settlements. Remedies in these proceedings or settlements may include fines, penalties,

72 U.S. Bancorp

restitution or alterations in the Company’s business practices (which may increase the Company’s operating expenses and decrease its revenue).

Outlook Due to their complex nature, it can be years before litigation and regulatory matters are resolved. The Company may be unable to develop an estimate or range of loss where matters are in early stages, there are significant factual or legal issues to be resolved, damages are unspecified or uncertain, or there is uncertainty as to a litigation class being certified or the outcome of pending motions, appeals or proceedings. For those litigation and regulatory matters where the Company has information to develop an estimate or range of loss, the Company believes the upper end of the range of reasonably possible losses in aggregate, in excess of any reserves established for matters where a loss is considered probable, will not be material to its financial condition, results of operations or cash flows. The Company’s estimates are subject to significant judgment and uncertainties, and the matters underlying the estimates will change from time to time. Actual results may vary significantly from the current estimates.

 Note 17    Business Segments

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

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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.

74 U.S. Bancorp

Business segment results for the three months ended September 30 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)	$	717		$	852		$	1,551		$	1,474		$	225		$	301
Noninterest income		253			267			715			848			558			505
Total net revenue		970			1,119			2,266			2,322			783			806
Noninterest expense		418			428			1,450			1,383			507			489
Other intangibles		–			–			3			4			4			3
Total noninterest expense		418			428			1,453			1,387			511			492
Income (loss) before provision and income taxes		552			691			813			935			272			314
Provision for credit losses		15			95			(25	)		69			11			11
Income (loss) before income taxes		537			596			838			866			261			303
Income taxes and taxable-equivalent adjustment		134			149			210			217			65			76
Net income (loss)		403			447			628			649			196			227
Net (income) loss attributable to noncontrolling interests		–			–			–			–			–			–
Net income (loss) attributable to U.S. Bancorp	$	403		$	447		$	628		$	649		$	196		$	227
Average Balance Sheet
Loans	$	102,431		$	115,547		$	140,833		$	145,229		$	18,454		$	15,616
Other earning assets		4,722			4,110			7,645			8,195			225			288
Goodwill		1,650			1,647			3,506			3,475			1,618			1,618
Other intangible assets		5			6			2,754			1,942			80			37
Assets		114,629			128,369			160,882			164,246			21,566			18,708
Noninterest-bearing deposits		62,642			48,058			34,416			34,288			24,453			17,719
Interest-bearing deposits		68,917			87,558			160,271			133,095			71,841			73,857
Total deposits		131,559			135,616			194,687			167,383			96,294			91,576
Total U.S. Bancorp shareholders’ equity		13,772			15,051			12,277			13,562			3,172			2,968
	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)	$	616		$	643		$	88		$	(18	)	$	3,197		$	3,252
Noninterest income		946	(a)		867	(a)		221			225			2,693	(b)		2,712	(b)
Total net revenue		1,562			1,510			309			207			5,890	(c)		5,964	(c)
Noninterest expense		817			797			196			230			3,388			3,327
Other intangibles		34			37			–			–			41			44
Total noninterest expense		851			834			196			230			3,429			3,371
Income (loss) before provision and income taxes		711			676			113			(23	)		2,461			2,593
Provision for credit losses		166			246			(330	)		214			(163	)		635
Income (loss) before income taxes		545			430			443			(237	)		2,624			1,958
Income taxes and taxable-equivalent adjustment		136			108			45			(178	)		590			372
Net income (loss)		409			322			398			(59	)		2,034			1,586
Net (income) loss attributable to noncontrolling interests		–			–			(6	)		(6	)		(6	)		(6	)
Net income (loss) attributable to U.S. Bancorp	$	409		$	322		$	392		$	(65	)	$	2,028		$	1,580
Average Balance Sheet
Loans	$	31,378		$	31,168		$	3,643		$	3,458		$	296,739		$	311,018
Other earning assets		5			5			193,989			162,488			206,586			175,086
Goodwill		3,168			3,123			–			–			9,942			9,863
Other intangible assets		496			602			–			–			3,335			2,587
Assets		37,173			36,191			219,196			189,388			553,446			536,902
Noninterest-bearing deposits		4,913			6,886			2,594			2,424			129,018			109,375
Interest-bearing deposits		150			124			1,290			1,514			302,469			296,148
Total deposits		5,063			7,010			3,884			3,938			431,487			405,523
Total U.S. Bancorp shareholders’ equity		7,561			7,716			17,491			13,119			54,273			52,416

(a) Presented net of related rewards and rebate costs and certain partner payments of $652 million and $525 million for the three months ended September 30, 2021 and 2020, respectively.

(b) Includes revenue generated from certain contracts with customers of $2.0 billion and $1.8 billion for the three months ended September 30, 2021 and 2020, respectively.

(c) The Company, as a lessor, originates retail and commercial leases either directly to the consumer or indirectly through dealer networks. Under these arrangments, the Company recorded $220 million and $246 million of revenue for the three months ended September 30, 2021 and 2020, respectively, primarily consisting of interest income on sales-type and direct financing leases.

U.S. Bancorp 75

Business segment results for the nine months ended September 30 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)	$	2,172		$	2,623		$	4,603		$	4,239		$	721		$	964
Noninterest income		786			899			1,918			2,433			1,638			1,507
Total net revenue		2,958			3,522			6,521			6,672			2,359			2,471
Noninterest expense		1,257			1,310			4,210			4,061			1,499			1,445
Other intangibles		–			–			9			12			10			9
Total noninterest expense		1,257			1,310			4,219			4,073			1,509			1,454
Income (loss) before provision and income taxes		1,701			2,212			2,302			2,599			850			1,017
Provision for credit losses		(20	)		572			(143	)		269			26			34
Income (loss) before income taxes		1,721			1,640			2,445			2,330			824			983
Income taxes and taxable-equivalent adjustment		430			410			612			583			206			246
Net income (loss)		1,291			1,230			1,833			1,747			618			737
Net (income) loss attributable to noncontrolling interests		–			–			–			–			–			–
Net income (loss) attributable to U.S. Bancorp	$	1,291		$	1,230		$	1,833		$	1,747		$	618		$	737
Average Balance Sheet
Loans	$	102,117		$	118,686		$	141,220		$	139,981		$	17,584		$	15,151
Other earning assets		4,485			4,170			8,606			6,578			247			285
Goodwill		1,648			1,647			3,485			3,508			1,618			1,617
Other intangible assets		5			6			2,692			2,095			69			40
Assets		114,182			131,106			162,316			157,177			20,676			18,324
Noninterest-bearing deposits		59,841			41,091			33,734			29,397			23,024			16,285
Interest-bearing deposits		69,999			90,581			156,821			126,934			76,098			76,736
Total deposits		129,840			131,672			190,555			156,331			99,122			93,021
Total U.S. Bancorp shareholders’ equity		13,995			15,201			12,378			12,797			3,099			2,924
	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)	$	1,841		$	1,910		$	113		$	(13	)	$	9,450		$	9,723
Noninterest income		2,644	(a)		2,319	(a)		707			693			7,693	(b)		7,851	(b)
Total net revenue		4,485			4,229			820			680			17,143	(c)		17,574	(c)
Noninterest expense		2,381			2,296			729			764			10,076			9,876
Other intangibles		100			108			–			–			119			129
Total noninterest expense		2,481			2,404			729			764			10,195			10,005
Income (loss) before provision and income taxes		2,004			1,825			91			(84	)		6,948			7,569
Provision for credit losses		216			477			(1,239	)		2,013			(1,160	)		3,365
Income (loss) before income taxes		1,788			1,348			1,330			(2,097	)		8,108			4,204
Income taxes and taxable-equivalent adjustment		447			338			106			(833	)		1,801			744
Net income (loss)		1,341			1,010			1,224			(1,264	)		6,307			3,460
Net (income) loss attributable to noncontrolling interests		–			–			(17	)		(20	)		(17	)		(20	)
Net income (loss) attributable to U.S. Bancorp	$	1,341		$	1,010		$	1,207		$	(1,284	)	$	6,290		$	3,440
Average Balance Sheet
Loans	$	30,353		$	31,725		$	3,740		$	3,392		$	295,014		$	308,935
Other earning assets		5			5			192,259			156,045			205,602			167,083
Goodwill		3,174			3,027			–			–			9,925			9,799
Other intangible assets		519			584			–			–			3,285			2,725
Assets		35,972			36,497			218,053			182,276			551,199			525,380
Noninterest-bearing deposits		5,068			3,852			2,595			2,310			124,262			92,935
Interest-bearing deposits		141			119			1,718			3,293			304,777			297,663
Total deposits		5,209			3,971			4,313			5,603			429,039			390,598
Total U.S. Bancorp shareholders’ equity		7,544			7,269			16,311			13,745			53,327			51,936

(a) Presented net of related rewards and rebate costs and certain partner payments of $1.8 billion and $1.5 billion for the nine months ended September 30, 2021 and 2020, respectively.

(b) Includes revenue generated from certain contracts with customers of $5.6 billion and $5.1 billion for the nine months ended September 30, 2021 and 2020, respectively.

(c) The Company, as a lessor, originates retail and commercial leases either directly to the consumer or indirectly through dealer networks. Under these arrangments, the Company recorded $686 million and $714 million of revenue for the nine months ended September 30, 2021 and 2020, respectively, primarily consisting of interest income on sales-type and direct financing leases.

76 U.S. Bancorp

 Note 18    Subsequent Events

The Company has evaluated the impact of events that have occurred subsequent to September 30, 2021 through the date the consolidated financial statements were filed with the United States Securities and Exchange Commission. Based on this evaluation, the Company has determined none of these events were required to be recognized or disclosed in the consolidated financial statements and related notes.

U.S. Bancorp 77

U.S. Bancorp

Consolidated Daily Average Balance Sheet and Related Yields and Rates (a)

	For the Three Months Ended September 30
				2021								2020
(Dollars in Millions) (Unaudited)	Average Balances			Interest		Yields and Rates			Average Balances			Interest		Yields and Rates			% Change Average Balances
Assets
Investment securities	$	151,755		$	624		1.64	%	$	128,565		$	602		1.87	%		18.0	%
Loans held for sale		7,438			54		2.92			7,983			61		3.06			(6.8	)
Loans (b)
Commercial		101,832			711		2.77			115,489			718		2.48			(11.8	)
Commercial real estate		38,921			303		3.09			40,929			341		3.31			(4.9	)
Residential mortgages		74,104			604		3.25			75,786			687		3.62			(2.2	)
Credit card		21,905			569		10.30			22,052			583		10.51			(.7	)
Other retail		59,977			532		3.52			56,762			572		4.01			5.7
Total loans		296,739			2,719		3.64			311,018			2,901		3.72			(4.6	)
Other earning assets		47,393			38		.31			38,538			34		.35			23.0
Total earning assets		503,325			3,435		2.72			486,104			3,598		2.95			3.5
Allowance for loan losses		(5,972	)							(7,824	)							23.7
Unrealized gain (loss) on investment securities		1,231								3,655								(66.3	)
Other assets		54,862								54,967								(.2	)
Total assets	$	553,446							$	536,902								3.1
Liabilities and Shareholders’ Equity
Noninterest-bearing deposits	$	129,018							$	109,375								18.0	%
Interest-bearing deposits
Interest checking		103,036			5		.02			84,494			7		.04			21.9
Money market savings		112,543			50		.17			124,115			68		.22			(9.3	)
Savings accounts		63,387			2		.01			53,499			5		.04			18.5
Time deposits		23,503			21		.35			34,040			50		.58			(31.0	)
Total interest-bearing deposits		302,469			78		.10			296,148			130		.17			2.1
Short-term borrowings		14,688			18		.49			18,049			19		.43			(18.6	)
Long-term debt		35,972			142		1.57			43,542			197		1.80			(17.4	)
Total interest-bearing liabilities		353,129			238		.27			357,739			346		.39			(1.3	)
Other liabilities		16,391								16,742								(2.1	)
Shareholders’ equity
Preferred equity		5,968								5,984								(.3	)
Common equity		48,305								46,432								4.0
Total U.S. Bancorp shareholders’ equity		54,273								52,416								3.5
Noncontrolling interests		635								630								.8
Total equity		54,908								53,046								3.5
Total liabilities and equity	$	553,446							$	536,902								3.1
Net interest income				$	3,197							$	3,252
Gross interest margin							2.45	%							2.56	%
Gross interest margin without taxable-equivalent increments							2.43	%							2.54	%
Percent of Earning Assets
Interest income							2.72	%							2.95	%
Interest expense							.19								.28
Net interest margin							2.53	%							2.67	%
Net interest margin without taxable-equivalent increments							2.51	%							2.65	%

(a) Interest and rates are presented on a fully taxable-equivalent basis based on a federal income tax rate of 21 percent.

(b) Interest income and rates on loans include loan fees. Nonaccrual loans are included in average loan balances.

78 U.S. Bancorp

U.S. Bancorp

Consolidated Daily Average Balance Sheet and Related Yields and Rates (a)

	For the Nine Months Ended September 30
				2021								2020
(Dollars in Millions) (Unaudited)	Average Balances			Interest		Yields and Rates			Average Balances			Interest		Yields and Rates			% Change Average Balances
Assets
Investment securities	$	152,653		$	1,793		1.57	%	$	123,444		$	1,953		2.11	%		23.7	%
Loans held for sale		8,422			176		2.79			6,352			157		3.31			32.6
Loans (b)
Commercial		102,298			2,060		2.69			116,501			2,492		2.86			(12.2	)
Commercial real estate		38,757			914		3.15			40,699			1,129		3.71			(4.8	)
Residential mortgages		74,215			1,870		3.36			72,612			1,985		3.65			2.2
Credit card		21,391			1,701		10.63			22,465			1,794		10.66			(4.8	)
Other retail		58,353			1,594		3.65			56,658			1,783		4.20			3.0
Total loans		295,014			8,139		3.69			308,935			9,183		3.97			(4.5	)
Other earning assets		44,527			103		.31			37,287			144		.52			19.4
Total earning assets		500,616			10,211		2.72			476,018			11,437		3.21			5.2
Allowance for loan losses		(6,513	)							(6,656	)							2.1
Unrealized gain (loss) on investment securities		1,304								2,863								(54.5	)
Other assets		55,792								53,155								5.0
Total assets	$	551,199							$	525,380								4.9
Liabilities and Shareholders’ Equity
Noninterest-bearing deposits	$	124,262							$	92,935								33.7	%
Interest-bearing deposits
Interest checking		101,280			18		.02			81,890			58		.10			23.7
Money market savings		116,968			150		.17			125,247			474		.51			(6.6	)
Savings accounts		61,462			5		.01			50,937			42		.11			20.7
Time deposits		25,067			72		.38			39,589			275		.93			(36.7	)
Total interest-bearing deposits		304,777			245		.11			297,663			849		.38			2.4
Short-term borrowings		14,758			52		.47			21,335			127		.80			(30.8	)
Long-term debt		37,196			464		1.67			44,587			738		2.21			(16.6	)
Total interest-bearing liabilities		356,731			761		.28			363,585			1,714		.63			(1.9	)
Other liabilities		16,247								16,294								(.3	)
Shareholders’ equity
Preferred equity		6,049								5,984								1.1
Common equity		47,278								45,952								2.9
Total U.S. Bancorp shareholders’ equity		53,327								51,936								2.7
Noncontrolling interests		632								630								.3
Total equity		53,959								52,566								2.7
Total liabilities and equity	$	551,199							$	525,380								4.9
Net interest income				$	9,450							$	9,723
Gross interest margin							2.44	%							2.58	%
Gross interest margin without taxable-equivalent increments							2.42	%							2.56	%
Percent of Earning Assets
Interest income							2.72	%							3.21	%
Interest expense							.20								.48
Net interest margin							2.52	%							2.73	%
Net interest margin without taxable-equivalent increments							2.50	%							2.71	%

(a) Interest and rates are presented on a fully taxable-equivalent basis based on a federal income tax rate of 21 percent.

(b) Interest income and rates on loans include loan fees. Nonaccrual loans are included in average loan balances.

U.S. Bancorp 79

Part II — Other Information

Item 1. Legal Proceedings — See the information set forth in Note 16 in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Report, which is incorporated herein by reference.

Item 1A. Risk Factors — There are a number of factors that may adversely affect the Company’s business, financial results or stock price. Refer to “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, for discussion of these risks.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds — Refer to the “Capital Management” section within Management’s Discussion and Analysis in Part I, Item 2 of this Report for information regarding shares repurchased by the Company during the third quarter of 2021.

Item 6. Exhibits

2.1	Share Purchase Agreement, dated as of September 21, 2021, among Mitsubishi UFJ Financial Group, Inc., MUFG Americas Holdings Corporation, and U.S. Bancorp (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed on September 24, 2021).
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
104	The cover page of U.S. Bancorp’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, formatted in Inline XBRL (included within the Exhibit 101 attachments).

80 U.S. Bancorp

SIGNATURE

Pursuant to the requirements 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
	By:	/s/    LISA R. STARK
Dated: November 2, 2021		Lisa R. Stark Controller (Principal Accounting Officer and Duly Authorized Officer)

U.S. Bancorp 81

EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Andrew Cecere, certify that:

(1) I have reviewed this Quarterly Report on Form 10-Q of U.S. Bancorp;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/S/    ANDREW CECERE

Andrew Cecere

Chief Executive Officer

Dated: November 2, 2021

82 U.S. Bancorp

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Terrance R. Dolan, certify that:

(1) I have reviewed this Quarterly Report on Form 10-Q of U.S. Bancorp;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/    TERRANCE R. DOLAN

Terrance R. Dolan

Chief Financial Officer

Dated: November 2, 2021

U.S. Bancorp 83

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, Chief Executive Officer and Chief Financial Officer of U.S. Bancorp, a Delaware corporation (the “Company”), do hereby certify that:

(1) The Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/    ANDREW CECERE	/s/    TERRANCE R. DOLAN
Andrew Cecere Chief Executive Officer Dated: November 2, 2021	Terrance R. Dolan Chief Financial Officer

84 U.S. Bancorp

Corporate Information

Executive Offices

U.S. Bancorp

800 Nicollet Mall

Minneapolis, MN 55402

Common Stock Transfer Agent and Registrar

Computershare acts as our transfer agent and registrar, dividend paying agent and dividend reinvestment plan administrator, and maintains all shareholder records for the Company. Inquiries related to shareholder records, stock transfers, changes of ownership, lost stock certificates, changes of address and dividend payment should be directed to the transfer agent at:

Computershare

P.O. Box 505000

Louisville, KY 40233

Phone: 888-778-1311 or 201-680-6578 (international calls)

Internet: www.computershare.com/investor

Registered or Certified Mail:

Computershare

462 South 4th Street, Suite 1600

Louisville, KY 40202

Telephone representatives are available weekdays from 8 a.m. to 6 p.m., Central Time, and automated support is available 24 hours a day, seven days a week. Specific information about your account is available on Computershare’s Investor Center website.

Independent Auditor

Ernst & Young LLP serves as the independent auditor for U.S. Bancorp’s financial statements.

Common Stock Listing and Trading

U.S. Bancorp common stock is listed and traded on the New York Stock Exchange under the ticker symbol USB.

Dividends and Reinvestment Plan

U.S. Bancorp currently pays quarterly dividends on our common stock on or about the 15th day of January, April, July and October, subject to approval by our Board of Directors. U.S. Bancorp shareholders can choose to participate in a plan that provides automatic reinvestment of dividends and/or optional cash purchase of additional shares of U.S. Bancorp common stock. For more information, please contact our transfer agent, Computershare.

Investor Relations Contact

Jennifer A. Thompson, CFA

Executive Vice President, Investor Relations

jen.thompson@usbank.com

Phone: 612-303-0778 or 866-775-9668

Financial Information

U.S. Bancorp news and financial results are available through our website and by mail.

Website For information about U.S. Bancorp, including news, financial results, annual reports and other documents filed with the Securities and Exchange Commission, visit usbank.com and click on About Us.

Mail At your request, we will mail to you our quarterly earnings, news releases, quarterly financial data reported on Form 10-Q, Form 10-K and additional copies of our annual reports. Please contact:

U.S. Bancorp Investor Relations

800 Nicollet Mall

Minneapolis, MN 55402

investorrelations@usbank.com

Phone: 866-775-9668

Media Requests

David R. Palombi

Global Chief Communications Officer

Public Affairs and Communications

david.palombi@usbank.com

Phone: 612-303-3167

Privacy

U.S. Bancorp is committed to respecting the privacy of our customers and safeguarding the financial and personal information provided to us. To learn more about the U.S. Bancorp commitment to protecting privacy, visit usbank.com and click on Privacy.

Code of Ethics

At U.S. Bancorp, our commitment to high ethical standards guides everything we do. Demonstrating this commitment through our words and actions is how each of us does the right thing every day for our customers, shareholders, communities and each other. Our ethical culture has been recognized by the Ethisphere Institute, which again named us to its World’s Most Ethical Companies® list.

For details about our Code of Ethics and Business Conduct, visit usbank.com and click on About Us and then Investor Relations and then Corporate Governance.

Diversity and Inclusion

At U.S. Bancorp, embracing diversity, championing equity and fostering inclusion are business imperatives. We view everything we do through a diversity, equity and inclusion lens to deepen our relationships with our stakeholders: our employees, customers, shareholders and communities.

Our employees bring their whole selves to work. We respect and value each other’s differences, strengths and perspectives, and we strive to reflect the communities we serve. This makes us stronger, more innovative and more responsive to our diverse customers’ needs.

Equal Opportunity and Affirmative Action

U.S. Bancorp and our subsidiaries are committed to providing Equal Employment Opportunity to all employees and applicants for employment. In keeping with this commitment, employment decisions are made based on abilities, not race, color, religion, creed, citizenship, national origin or ancestry, gender, age, disability, veteran status, sexual orientation, marital status, gender identity or expression, genetic information or any other factors protected by law. The Company complies with municipal, state and federal fair employment laws, including regulations applying to federal contractors.

U.S. Bancorp, including each of our subsidiaries, is an equal opportunity employer committed to creating a diverse workforce.

Accessibility

U.S. Bancorp is committed to providing ready access to our products and services so all of our customers, including people with disabilities, can succeed financially. To learn more, visit usbank.com and click on Accessibility.

This report has been produced on recycled paper.

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Andrew Cecere, certify that:

(1) I have reviewed this Quarterly Report on Form 10-Q of U.S. Bancorp;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/S/    ANDREW CECERE

Andrew Cecere

Chief Executive Officer

Dated: November 2, 2021

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Terrance R. Dolan, certify that:

(1) I have reviewed this Quarterly Report on Form 10-Q of U.S. Bancorp;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/    TERRANCE R. DOLAN

Terrance R. Dolan

Chief Financial Officer

Dated: November 2, 2021

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, Chief Executive Officer and Chief Financial Officer of U.S. Bancorp, a Delaware corporation (the “Company”), do hereby certify that:

(1) The Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/    ANDREW CECERE	/s/    TERRANCE R. DOLAN
Andrew Cecere Chief Executive Officer Dated: November 2, 2021	Terrance R. Dolan Chief Financial Officer

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2021	Oct. 31, 2021
Document Information [Line Items]
Document Type	10-Q
Entity Registrant Name	US BANCORP \DE\
Document Period End Date	Sep. 30, 2021
Entity Filer Category	Large Accelerated Filer
Entity Shell Company	false
Entity Current Reporting Status	Yes
Entity Smaller Reporting Company	false
Entity Emerging Growth Company	false
Document Transition Report	false
Document Quarterly Report	true
Entity Incorporation, State or Country Code	DE
Entity File Number	1-6880
Entity Tax Identification Number	41-0255900
Entity Interactive Data Current	Yes
Entity Address, Postal Zip Code	55402
Entity Address, City or Town	Minneapolis
Entity Address, State or Province	MN
Entity Address, Address Line One	800 Nicollet Mall
City Area Code	651
Local Phone Number	466-3000
Entity Common Stock, Shares Outstanding		1,482,797,679
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Entity Central Index Key	0000036104
Current Fiscal Year End Date	--12-31
Common Stock [Member]
Document Information [Line Items]
Trading Symbol	USB
Title of 12(b) Security	Common Stock
Security Exchange Name	NYSE
Series A Preferred Stock [Member]
Document Information [Line Items]
Trading Symbol	USB PrA
Title of 12(b) Security	Depositary Shares
Security Exchange Name	NYSE
Series B Preferred Stock [Member]
Document Information [Line Items]
Trading Symbol	USB PrH
Title of 12(b) Security	Depositary Shares
Security Exchange Name	NYSE
Series F Preferred Stock [Member]
Document Information [Line Items]
Trading Symbol	USB PrM
Title of 12(b) Security	Depositary Shares
Security Exchange Name	NYSE
Series K Preferred Stock [Member]
Document Information [Line Items]
Trading Symbol	USB PrP
Title of 12(b) Security	Depositary Shares
Security Exchange Name	NYSE
Series L Preferred Stock [Member]
Document Information [Line Items]
Trading Symbol	USB PrQ
Title of 12(b) Security	Depositary Shares
Security Exchange Name	NYSE
Series M Preferred Stock [Member]
Document Information [Line Items]
Trading Symbol	USB PrR
Title of 12(b) Security	Depositary Shares
Security Exchange Name	NYSE
Series X [Member]
Document Information [Line Items]
Trading Symbol	USB/24B
Title of 12(b) Security	Medium-Term Notes
Security Exchange Name	NYSE

XML

Consolidated Balance Sheet - USD ($) $ in Millions		Sep. 30, 2021		Dec. 31, 2020
Assets
Cash and due from banks		$ 63,904		$ 62,580
Available-for-sale investment securities	[1]	149,376	[2]	136,840
Loans held for sale		6,191		8,761
Loans
Total loans		297,608		297,707
Less allowance for loan losses		(5,792)		(7,314)
Net loans		291,816		290,393
Premises and equipment		3,262		3,468
Goodwill		9,996		9,918
Other intangible assets		3,528		2,864
Other assets	[1]	39,422		39,081
Total assets		567,495		553,905
Deposits
Noninterest-bearing		135,549		118,089
Interest-bearing	[3]	307,353		311,681
Total deposits		442,902		429,770
Short-term borrowings		16,088		11,766
Long-term debt		35,671		41,297
Other liabilities		18,456		17,347
Total liabilities		513,117		500,180
Shareholders' equity
Preferred stock		5,968		5,983
Common stock		21		21
Capital surplus		8,550		8,511
Retained earnings		68,297		64,188
Less cost of common stock in treasury		(27,301)		(25,930)
Accumulated other comprehensive income (loss)		(1,792)		322
Total U.S. Bancorp shareholders' equity		53,743		53,095
Noncontrolling interests		635		630
Total equity		54,378		53,725
Total liabilities and equity		567,495		553,905
Commercial
Loans
Total loans		101,013		102,871
Commercial real estate
Loans
Total loans		38,808		39,311
Residential mortgages
Loans
Total loans		74,954		76,155
Credit card
Loans
Total loans		22,137		22,346
Other retail
Loans
Total loans		$ 60,696		$ 57,024

[1] Includes only collateral pledged by the Company where counterparties have the right to sell or pledge the collateral.

[2] The weighted-average maturity of total available-for-sale investment securities was 3.4 years at December 31, 2020, with a corresponding weighted-average yield of 1.61 percent.

[3] lncludes time deposits greater than $250,000 balances of $2.4 billion and $4.4 billion at September 30, 2021 and December 31, 2020, respectively.

XML

Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Securities, pledged as collateral	$ 850	$ 402
Mortgage loans, carried at fair value	$ 6,176	$ 8,524
Common stock, par value	$ 0.01	$ 0.01
Common stock, share-authorized (actual number of shares)	4,000,000,000	4,000,000,000
Common stock, shares issued (actual number of shares)	2,125,725,742	2,125,725,742
Treasury stock, shares (actual number of shares)	643,035,053	618,618,084
Time deposits greater than 250,000	$ 2,400	$ 4,400
Available-for-Sale Securities [Member]
Securities, pledged as collateral	850	402
Trading Assets, Excluding Debt and Equity Securities [Member]
Securities, pledged as collateral	$ 1,426	$ 1,255

XML

Consolidated Statement of Income - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Interest Income
Loans	$ 2,711	$ 2,892	$ 8,112	$ 9,152
Loans held for sale	54	61	176	157
Investment securities	606	586	1,741	1,908
Other interest income	38	34	103	144
Total interest income	3,409	3,573	10,132	11,361
Interest Expense
Deposits	78	130	245	849
Short-term borrowings	18	19	52	124
Long-term debt	142	197	464	738
Total interest expense	238	346	761	1,711
Net interest income	3,171	3,227	9,371	9,650
Provision for credit losses	(163)	635	(1,160)	3,365
Net interest income after provision for credit losses	3,334	2,592	10,531	6,285
Noninterest Income
Credit and debit card revenue	393	388	1,125	976
Corporate payment products revenue	156	125	420	371
Merchant processing services	392	347	1,084	950
Trust and investment management fees	459	434	1,349	1,295
Deposit service charges	194	170	531	512
Treasury management fees	155	145	462	425
Commercial products revenue	277	303	837	904
Mortgage banking revenue	418	553	1,063	1,596
Investment products fees	62	48	177	142
Securities gains (losses), net	20	12	88	143
Other	167	187	557	537
Total noninterest income	2,693	2,712	7,693	7,851
Noninterest Expense
Compensation	1,847	1,687	5,448	4,992
Employee benefits	336	335	1,057	1,001
Net occupancy and equipment	259	276	780	823
Professional services	126	102	332	307
Marketing and business development	99	72	237	213
Technology and communications	361	334	1,082	932
Postage, printing and supplies	69	70	203	214
Other intangibles	41	44	119	129
Other	291	451	937	1,394
Total noninterest expense	3,429	3,371	10,195	10,005
Income before income taxes	2,598	1,933	8,029	4,131
Applicable income taxes	564	347	1,722	671
Net income	2,034	1,586	6,307	3,460
Net (income) loss attributable to noncontrolling interests	(6)	(6)	(17)	(20)
Net income attributable to U.S. Bancorp	2,028	1,580	6,290	3,440
Net income applicable to U.S. Bancorp common shareholders	$ 1,934	$ 1,494	$ 6,023	$ 3,196
Earnings per common share	$ 1.30	$ 0.99	$ 4.04	$ 2.12
Diluted earnings per common share	$ 1.30	$ 0.99	$ 4.04	$ 2.11
Average common shares outstanding	1,483	1,506	1,491	1,510
Average diluted common shares outstanding	1,484	1,507	1,492	1,511

XML

Consolidated Statement of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Statement of Comprehensive Income [Abstract]
Net income	$ 2,034	$ 1,586	$ 6,307	$ 3,460
Other Comprehensive Income (Loss)
Changes in unrealized gains and losses on investment securities available-for-sale	(825)	(305)	(3,008)	2,935
Changes in unrealized gains and losses on derivative hedges	8	27	121	(230)
Foreign currency translation	(1)	6	23	(6)
Reclassification to earnings of realized gains and losses	27	23	34	(42)
Income taxes related to other comprehensive income (loss)	201	63	716	(672)
Total other comprehensive income (loss)	(590)	(186)	(2,114)	1,985
Comprehensive income (loss)	1,444	1,400	4,193	5,445
Comprehensive (income) loss attributable to noncontrolling interests	(6)	(6)	(17)	(20)
Comprehensive income (loss) attributable to U.S. Bancorp	$ 1,438	$ 1,394	$ 4,176	$ 5,425

XML

Consolidated Statement of Shareholders' Equity - USD ($) shares in Millions, $ in Millions		Total	Cumulative Effect, Period of Adoption, Adjustment [Member]	[1]	Common Stock [Member]	Preferred Stock [Member]	Capital Surplus [Member]	Retained Earnings [Member]	Retained Earnings [Member] Cumulative Effect, Period of Adoption, Adjustment [Member]	[1]	Treasury Stock [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total U.S. Bancorp Shareholders' Equity [Member]	Total U.S. Bancorp Shareholders' Equity [Member] Cumulative Effect, Period of Adoption, Adjustment [Member]	[1]	Noncontrolling Interests [Member]
Beginning Balance at Dec. 31, 2019		$ 52,483	$ (1,099)		$ 21	$ 5,984	$ 8,475	$ 63,186	$ (1,099)		$ (24,440)	$ (1,373)	$ 51,853	$ (1,099)		$ 630
Shares, Beginning Balance at Dec. 31, 2019					1,534
Net income (loss)		3,460						3,440					3,440			20
Other comprehensive income (loss)		1,985										1,985	1,985
Preferred stock dividends	[2]	(229)						(229)					(229)
Common stock dividends		(1,907)						(1,907)					(1,907)
Issuance of common and treasury stock		12					(118)				130		12
Issuance of common and treasury stock, shares					3
Purchase of treasury stock		(1,649)									(1,649)		(1,649)
Purchase of treasury stock, shares					(31)
Distributions to noncontrolling interests		(19)														(19)
Net other changes in noncontrolling interests		(1)														(1)
Stock option and restricted stock grants		159					159						159
Ending Balance at Sep. 30, 2020		53,195			$ 21	5,984	8,516	63,391			(25,959)	612	52,565			630
Shares, Ending Balance at Sep. 30, 2020					1,506
Beginning Balance at Jun. 30, 2020		52,480			$ 21	5,984	8,483	62,526			(25,962)	798	51,850			630
Shares, Beginning Balance at Jun. 30, 2020					1,506
Net income (loss)		1,586						1,580					1,580			6
Other comprehensive income (loss)		(186)										(186)	(186)
Preferred stock dividends	[3]	(79)						(79)					(79)
Common stock dividends		(636)						(636)					(636)
Issuance of common and treasury stock		2					(1)				3		2
Distributions to noncontrolling interests		(5)														(5)
Net other changes in noncontrolling interests		(1)														(1)
Stock option and restricted stock grants		34					34						34
Ending Balance at Sep. 30, 2020		53,195			$ 21	5,984	8,516	63,391			(25,959)	612	52,565			630
Shares, Ending Balance at Sep. 30, 2020					1,506
Beginning Balance at Dec. 31, 2020		53,725			$ 21	5,983	8,511	64,188			(25,930)	322	53,095			630
Shares, Beginning Balance at Dec. 31, 2020					1,507
Net income (loss)		6,307						6,290					6,290			17
Other comprehensive income (loss)		(2,114)										(2,114)	(2,114)
Preferred stock dividends	[4]	(232)						(232)					(232)
Common stock dividends		(1,944)						(1,944)					(1,944)
Issuance of preferred stock		730				730							730
Issuance of common and treasury stock		39					(127)				166		39
Issuance of common and treasury stock, shares					4
Purchase of treasury stock		(1,537)									(1,537)		(1,537)
Purchase of treasury stock, shares					(28)
Distributions to noncontrolling interests		(16)														(16)
Net other changes in noncontrolling interests		4														4
Stock option and restricted stock grants		166					166						166
Redemption of preferred stock		(750)				(745)		(5)					(750)
Ending Balance at Sep. 30, 2021		54,378			$ 21	5,968	8,550	68,297			(27,301)	(1,792)	53,743			635
Shares, Ending Balance at Sep. 30, 2021					1,483
Beginning Balance at Jun. 30, 2021		53,674			$ 21	5,968	8,518	67,039			(27,305)	(1,202)	53,039			635
Shares, Beginning Balance at Jun. 30, 2021					1,483
Net income (loss)		2,034						2,028					2,028			6
Other comprehensive income (loss)		(590)										(590)	(590)
Preferred stock dividends	[5]	(84)						(84)					(84)
Common stock dividends		(686)						(686)					(686)
Issuance of common and treasury stock		3					(1)				4		3
Distributions to noncontrolling interests		(5)														(5)
Net other changes in noncontrolling interests		(1)														(1)
Stock option and restricted stock grants		33					33						33
Ending Balance at Sep. 30, 2021		$ 54,378			$ 21	$ 5,968	$ 8,550	$ 68,297			$ (27,301)	$ (1,792)	$ 53,743			$ 635
Shares, Ending Balance at Sep. 30, 2021					1,483

[1] Effective January 1, 2020, the Company adopted accounting guidance which changed impairment recognition of financial instruments to a model that is based on expected losses rather than incurred losses. Upon adoption, the Company increased its allowance for credit losses and reduced retained earnings net of deferred tax liabilities through a cumulative-effect adjustment.

[2] Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series H, Series I, Series J and Series K Non-Cumulative Perpetual Preferred Stock of $2,663.888, $665.97, $1,218.75, $965.64, $640.625, $1,325.00 and $1,031.25, respectively.

[3] Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series H, Series J and Series K Non-Cumulative Perpetual Preferred Stock of $894.444, $223.61, $406.25, $321.88, $662.50 and $343.75, respectively.

[4] Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series I, Series J, Series K, Series L and Series M Non-Cumulative Perpetual Preferred Stock of $2,654.166, $663.542, $1,218.75, $232.953, $1,325.00, $1,031.25, $703.125 and $702.778, respectively.

[5] Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series J, Series K, Series L and Series M Non-Cumulative Perpetual Preferred Stock of $894.444, $223.611, $406.25, $662.50, $343.75, $234.375 and $250.00, respectively.

XML

Consolidated Statement of Shareholders' Equity (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Common stock dividends, share	$ 0.46	$ 0.42	$ 1.30	$ 1.26
Series A [Member]
Preferred stock dividends declared per share	894.444	894.444	2,654.166	2,663.888
Series B [Member]
Preferred stock dividends declared per share	223.611	223.61	663.542	665.97
Series F [Member]
Preferred stock dividends declared per share	406.25	406.25	1,218.75	1,218.75
Series H [Member]
Preferred stock dividends declared per share		321.88		965.64
Series I [Member]
Preferred stock dividends declared per share			232.953	640.625
Series J [Member]
Preferred stock dividends declared per share	662.50	662.50	1,325.00	1,325.00
Series K [Member]
Preferred stock dividends declared per share	343.75	$ 343.75	1,031.25	$ 1,031.25
Series L [Member]
Preferred stock dividends declared per share	234.375		703.125
Series M [Member]
Preferred stock dividends declared per share	$ 250.00		$ 702.778

XML

Consolidated Statement of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Operating Activities
Net income attributable to U.S. Bancorp	$ 6,290	$ 3,440
Adjustments to reconcile net income to net cash provided by operating activities
Provision for credit losses	(1,160)	3,365
Depreciation and amortization of premises and equipment	253	264
Amortization of intangibles	119	129
(Gain) loss on sale of loans held for sale	(950)	(1,613)
(Gain) loss on sale of securities and other assets	(297)	(274)
Loans originated for sale, net of repayments	(56,256)	(46,456)
Proceeds from sales of loans held for sale	58,517	45,469
Other, net	2,651	461
Net cash provided by operating activities	9,167	4,785
Investing Activities
Proceeds from sales of available-for-sale investment securities	13,383	13,920
Proceeds from maturities of available-for-sale investment securities	33,740	24,992
Purchases of available-for-sale investment securities	(62,764)	(48,481)
Net increase in loans outstanding	(1,157)	(3,915)
Proceeds from sales of loans	4,228	1,429
Purchases of loans	(3,278)	(9,561)
Net (increase) decrease in securities purchased under agreements to resell	(41)	732
Other, net	120	(966)
Net cash used in investing activities	(15,769)	(21,850)
Financing Activities
Net increase in deposits	13,132	51,301
Net increase (decrease) in short-term borrowings	4,322	(10,000)
Proceeds from issuance of long-term debt	1,211	14,282
Principal payments or redemption of long-term debt	(6,603)	(13,088)
Proceeds from issuance of preferred stock	730
Proceeds from issuance of common stock	38	11
Repurchase of preferred stock	(1,250)
Repurchase of common stock	(1,537)	(1,660)
Cash dividends paid on preferred stock	(223)	(222)
Cash dividends paid on common stock	(1,894)	(1,917)
Net cash provided by financing activities	7,926	38,707
Change in cash and due from banks	1,324	21,642
Cash and due from banks at beginning of period	62,580	22,405
Cash and due from banks at end of period	$ 63,904	$ 44,047

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Basis of Presentation

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Basis of Presentation

 Note 1    Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and notes necessary for a complete presentation of financial position, results of operations and cash flow activity required in accordance with accounting principles generally accepted in the United States. In the opinion of management of U.S. Bancorp (the “Company”), all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of results for the interim periods have been made. These financial statements and notes should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Certain amounts in prior periods have been reclassified to conform to the current presentation.

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Accounting Changes

9 Months Ended

Sep. 30, 2021

Accounting Changes and Error Corrections [Abstract]

Accounting Changes

 Note 2    Accounting Changes

Reference Interest Rate Transition In March 2020, the FASB issued accounting guidance, providing temporary optional expedients and exceptions to the guidance in United States generally accepted accounting principles on contract modifications and hedge accounting, to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. Under the guidance, a company can elect not to apply certain modification accounting requirements to contracts affected by reference rate transition, if certain criteria are met. A company that makes this election would not be required to remeasure the contracts at the modification date or reassess a previous accounting determination. This guidance also permits a company to elect various optional expedients that would allow it to continue applying hedge accounting for hedging relationships affected by reference rate transition, if certain criteria are met. The guidance is effective upon issuance and generally can be applied through December 31, 2022. The Company is in the process of evaluating and applying, as applicable, the optional expedients and exceptions in accounting for eligible contract modifications, eligible existing hedging relationships and new hedging relationships available through December 31, 2022. The adoption of this guidance has not had, and is expected to continue to not have, a material impact on the Company’s financial statements.

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Business Combinations

9 Months Ended

Sep. 30, 2021

Business Combinations [Abstract]

Business Combinations

 Note 3    Business Combinations

In September 2021, the Company announced that it has entered into a definitive agreement to acquire MUFG Union Bank’s core regional banking franchise from Mitsubishi UFJ Financial Group (“MUFG”), for a purchase price of approximately $8.0 billion, including $5.5 billion in cash and approximately 44 million shares of the Company’s common stock. Upon close of the transaction, MUFG will hold approximately 2.9 percent of the Company’s common stock. The transaction excludes the purchase of MUFG Union Bank’s Global Corporate & Investment Bank, certain middle and back office functions, and other assets. MUFG Union Bank currently has approximately 300 branches in California, Washington and Oregon and is expected to add, based on MUFG Union Bank’s June 30, 2021 balance sheet, approximately $105 billion in total assets, $58 billion of loans and $90 billion of deposits to the Company’s consolidated balance sheet. The transaction is expected to close in the first half of 2022, subject to customary closing conditions, including regulatory approvals.

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Investment Securities

9 Months Ended

Sep. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Investment Securities

 Note 4    Investment Securities

The Company’s available-for-sale investment securities are carried at fair value with unrealized net gains or losses reported within accumulated other comprehensive income (loss) in shareholders’ equity. The Company had no outstanding investment securities classified as held-to-maturity at September 30, 2021 and December 31, 2020.

The amortized cost, gross unrealized holding gains and losses, and fair value of available-for-sale investment securities were as follows:

	September 30, 2021									December 31, 2020
(Dollars in Millions)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
U.S. Treasury and agencies	$	18,460	$	230	$	(199	)	$	18,491	$	21,954	$	462	$	(25	)	$	22,391
Mortgage-backed securities
Residential agency		113,137		996		(1,337	)		112,796		98,031		1,950		(13	)		99,968
Commercial agency		7,750		77		(141	)		7,686		5,251		170		(15	)		5,406
Asset-backed securities		64		5		–			69		200		5		–			205
Obligations of state and political subdivisions		9,820		560		(53	)		10,327		8,166		695		–			8,861
Other		7		–		–			7		9		–		–			9
Total available-for-sale	$	149,238	$	1,868	$	(1,730	)	$	149,376	$	133,611	$	3,282	$	(53	)	$	136,840

Investment securities with a fair value of $31.7 billion at September 30, 2021, and $11.0 billion at December 31, 2020, were pledged to secure public, private and trust deposits, repurchase agreements and for other purposes required by contractual obligation or law. Included in these amounts were securities where the Company and certain counterparties have agreements granting the counterparties the right to sell or pledge the securities. Investment securities securing these types of arrangements had a fair value of $850 million at September 30, 2021, and $402 million at December 31, 2020.

The following table provides information about the amount of interest income from taxable and non-taxable investment securities:

	Three Months Ended September 30				Nine Months Ended September 30
(Dollars in Millions)	2021		2020		2021		2020
Taxable	$	539	$	528	$	1,548	$	1,741
Non-taxable		67		58		193		167
Total interest income from investment securities	$	606	$	586	$	1,741	$	1,908

The following table provides information about the amount of gross gains and losses realized through the sales of available-for-sale investment securities:

	Three Months Ended September 30					Nine Months Ended September 30
(Dollars in Millions)	2021			2020		2021			2020
Realized gains	$	39		$	12	$	107		$	166
Realized losses		(19	)		–		(19	)		(23	)
Net realized gains	$	20		$	12	$	88		$	143
Income tax on net realized gains	$	5		$	3	$	22		$	36

The Company conducts a regular assessment of its available-for-sale investment securities with unrealized losses to determine whether all or some portion of a security’s unrealized loss is related to credit and an allowance for credit losses is necessary. If the Company intends to sell or it is more likely than not the Company will be required to sell an investment security, the amortized cost of the security is written down to fair value. When evaluating credit losses, the Company considers various factors such as the nature of the investment security, the credit ratings or financial condition of the issuer, the extent of the unrealized loss, expected cash flows of underlying collateral, the existence of any government or agency guarantees, and market conditions. The Company measures the allowance for credit losses using market information where available and discounting the cash flows at the original effective rate of the investment security. The allowance for credit losses is adjusted each period through earnings and can be subsequently recovered. The allowance for credit losses on the Company’s available-for-sale investment securities was immaterial at September 30, 2021 and December 31, 2020.

At September 30, 2021, certain investment securities had a fair value below amortized cost. The following table shows the gross unrealized losses and fair value of the Company’s available-for-sale investment securities with unrealized losses, aggregated by investment category and length of time the individual investment securities have been in continuous unrealized loss positions, at September 30, 2021:  

	Less Than 12 Months					12 Months or Greater					Total
(Dollars in Millions)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury and agencies	$	6,023	$	(163	)	$	980	$	(36	)	$	7,003	$	(199	)
Residential agency mortgage-backed securities		66,781		(1,328	)		375		(9	)		67,156		(1,337	)
Commercial agency mortgage-backed securities		3,947		(88	)		1,122		(53	)		5,069		(141	)
Asset-backed securities		–		–			2		–			2		–
Obligations of state and political subdivisions		2,145		(53	)		–		–			2,145		(53	)
Other		4		–			–		–			4		–
Total investment securities	$	78,900	$	(1,632	)	$	2,479	$	(98	)	$	81,379	$	(1,730	)

These unrealized losses primarily relate to changes in interest rates and market spreads subsequent to purchase of the investment securities. U.S. Treasury and agencies securities and agency mortgage-backed securities are issued, guaranteed or otherwise supported by the United States government. The Company’s obligations of state and political subdivisions are generally high grade. Accordingly, the Company does not consider these unrealized losses to be credit-related and an allowance for credit losses is not necessary. In general, the issuers of the investment securities are contractually prohibited from prepayment at less than par, and the Company did not pay significant purchase premiums for these investment securities. At September 30, 2021, the Company had no plans to sell investment securities with unrealized losses, and believes it is more likely than not it would not be required to sell such investment securities before recovery of their amortized cost.

During the nine months ended September 30, 2021 and 2020, the Company did not purchase any available-for-sale investment securities that had more-than-insignificant credit deterioration.

The following table provides information about the amortized cost, fair value and yield by maturity date of the available-for-sale investment securities outstanding at September 30, 2021:

(Dollars in Millions)	Amortized Cost		Fair Value		Weighted- Average Maturity in Years		Weighted- Average Yield (e)
U.S. Treasury and Agencies
Maturing in one year or less	$	2,873	$	2,894		.5		1.87	%
Maturing after one year through five years		6,835		6,977		2.4		1.61
Maturing after five years through ten years		7,146		7,041		7.9		1.33
Maturing after ten years		1,606		1,579		12.6		1.91
Total	$	18,460	$	18,491		5.1		1.57	%
Mortgage-Backed Securities (a)
Maturing in one year or less	$	140	$	138		.5		1.70	%
Maturing after one year through five years		54,361		55,259		3.4		1.57
Maturing after five years through ten years		66,370		65,068		6.5		1.53
Maturing after ten years		16		17		12.2		1.27
Total	$	120,887	$	120,482		5.1		1.55	%
Asset-Backed Securities (a)
Maturing in one year or less	$	–	$	–		.6		2.69	%
Maturing after one year through five years		63		66		3.8		1.50
Maturing after five years through ten years		1		2		6.2		2.58
Maturing after ten years		–		1		12.9		2.41
Total	$	64	$	69		3.8		1.51	%
Obligations of State and Political Subdivisions (b) (c)
Maturing in one year or less	$	349	$	355		.6		4.28	%
Maturing after one year through five years		2,492		2,663		4.1		4.24
Maturing after five years through ten years		5,595		5,964		6.9		3.73
Maturing after ten years		1,384		1,345		17.4		2.50
Total	$	9,820	$	10,327		7.4		3.71	%
Other
Maturing in one year or less	$	–	$	–		–		–	%
Maturing after one year through five years		7		7		3.7		2.07
Maturing after five years through ten years		–		–		–		–
Maturing after ten years		–		–		–		–
Total	$	7	$	7		3.7		2.07	%
Total investment securities (d)	$	149,238	$	149,376		5.3		1.69	%

(a) Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities that take into account anticipated future prepayments.

(b) Information related to obligations of state and political subdivisions is presented based upon yield to first optional call date if the security is purchased at a premium, and yield to maturity if the security is purchased at par or a discount.

(c) Maturity calculations for obligations of state and political subdivisions are based on the first optional call date for securities with a fair value above par and the contractual maturity date for securities with a fair value equal to or below par.

(d) The weighted-average maturity of total available-for-sale investment securities was 3.4 years at December 31, 2020, with a corresponding weighted-average yield of 1.61 percent.

(e) Weighted-average yields for obligations of state and political subdivisions are presented on a fully-taxable equivalent basis based on a federal income tax rate of 21 percent. Yields on investment securities are computed based on amortized cost balances.

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Loans and Allowance for Credit Losses

9 Months Ended

Sep. 30, 2021

Receivables [Abstract]

Loans and Allowance for Credit Losses

 Note 5    Loans and Allowance for Credit Losses

The composition of the loan portfolio, disaggregated by class and underlying specific portfolio type, was as follows:​​​​​​​

	September 30, 2021					December 31, 2020
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	95,876		32.2	%	$	97,315		32.7	%
Lease financing		5,137		1.8			5,556		1.9
Total commercial		101,013		34.0			102,871		34.6
Commercial Real Estate
Commercial mortgages		28,029		9.4			28,472		9.6
Construction and development		10,779		3.6			10,839		3.6
Total commercial real estate		38,808		13.0			39,311		13.2
Residential Mortgages
Residential mortgages		65,941		22.2			66,525		22.4
Home equity loans, first liens		9,013		3.0			9,630		3.2
Total residential mortgages		74,954		25.2			76,155		25.6
Credit Card		22,137		7.4			22,346		7.5
Other Retail
Retail leasing		7,505		2.5			8,150		2.7
Home equity and second mortgages		10,718		3.6			12,472		4.2
Revolving credit		2,682		.9			2,688		.9
Installment		16,166		5.5			13,823		4.6
Automobile		23,488		7.9			19,722		6.6
Student		137		–			169		.1
Total other retail		60,696		20.4			57,024		19.1
Total loans	$	297,608		100.0	%	$	297,707		100.0	%

The Company had loans of $89.8 billion at September 30, 2021, and $96.1 billion at December 31, 2020, pledged at the Federal Home Loan Bank, and loans of $73.1 billion at September 30, 2021, and $67.8 billion at December 31, 2020, pledged at the Federal Reserve Bank.

Originated loans are reported at the principal amount outstanding, net of unearned interest and deferred fees and costs, and any partial charge-offs recorded. Net unearned interest and deferred fees and costs amounted to $567 million at September 30, 2021 and $763 million at December 31, 2020. All purchased loans are recorded at fair value at the date of purchase. Beginning January 1, 2020, the Company evaluates purchased loans for more-than-insignificant deterioration at the date of purchase in accordance with applicable authoritative accounting guidance. Purchased loans that have experienced more-than-insignificant deterioration from origination are considered purchased credit deteriorated loans. All other purchased loans are considered non-purchased credit deteriorated loans.

Allowance for Credit Losses Beginning January 1, 2020, the allowance for credit losses is established for current expected credit losses on the Company’s loan and lease portfolio, including unfunded credit commitments. The allowance considers expected losses for the remaining lives of the applicable assets, inclusive of expected recoveries. The allowance for credit losses is increased through provisions charged to earnings and reduced by net charge-offs. Management evaluates the appropriateness of the allowance for credit losses on a quarterly basis. Multiple economic scenarios are considered over a three-year reasonable and supportable forecast period, which includes increasing consideration of historical loss experience over years two and three. These economic scenarios are constructed with interrelated projections of multiple economic variables, and loss estimates are produced that consider the historical correlation of those economic variables with credit losses. After the forecast period, the Company fully reverts to long-term historical loss experience, adjusted for prepayments and characteristics of the current loan and lease portfolio, to estimate losses over the remaining life of the portfolio. The economic scenarios are updated at least quarterly and are designed to provide a range of reasonable estimates, from better to worse than current expectations. Scenarios are weighted based on the Company’s expectation of economic conditions for the foreseeable future and reflect significant judgment and consideration of uncertainties that exist. Final loss estimates also consider factors affecting credit losses not reflected in the scenarios, due to the unique aspects of current conditions and expectations. These factors may include, but are not limited to, loan servicing practices, regulatory guidance, and/or fiscal and monetary policy actions.

The allowance recorded for credit losses utilizes forward-looking expected loss models to consider a variety of factors affecting lifetime credit losses. These factors include, but are not limited to, macroeconomic variables such as unemployment rate, real estate prices, gross domestic product levels and corporate bonds spreads, as well as loan and borrower characteristics, such as internal risk ratings on commercial loans and consumer credit scores, delinquency

status, collateral type and available valuation information, consideration of end-of-term losses on lease residuals, and the remaining term of the loan, adjusted for expected prepayments. For each loan portfolio, model estimates are adjusted as necessary to consider any relevant changes in portfolio composition, lending policies, underwriting standards, risk management practices, economic conditions or other factors that would affect the accuracy of the model. Expected credit loss estimates also include consideration of expected cash recoveries on loans previously charged-off or expected recoveries on collateral dependent loans where recovery is expected through sale of the collateral. Where loans do not exhibit similar risk characteristics, an individual analysis is performed to consider expected credit losses. The allowance recorded for individually evaluated loans greater than $5 million in the commercial lending segment is based on an analysis utilizing expected cash flows discounted using the original effective interest rate, the observable market price of the loan, or the fair value of the collateral, less selling costs, for collateral-dependent loans as appropriate.

The allowance recorded for Troubled Debt Restructuring (“TDR”) loans in the consumer lending segment is determined on a homogenous pool basis utilizing expected cash flows discounted using the original effective interest rate of the pool. TDRs generally do not include loan modifications granted to customers resulting directly from the economic effects of the COVID-19 pandemic, who were otherwise in current payment status. The expected cash flows on TDR loans consider subsequent payment defaults since modification, the borrower’s ability to pay under the restructured terms, and the timing and amount of payments. The allowance for collateral-dependent loans in the consumer lending segment is determined based on the fair value of the collateral less costs to sell. With respect to the commercial lending segment, TDRs may be collectively evaluated for impairment where observed performance history, including defaults, is a primary driver of the loss allocation. For commercial TDRs individually evaluated for impairment, attributes of the borrower are the primary factors in determining the allowance for credit losses. However, historical loss experience is also incorporated into the allowance methodology applied to this category of loans.

Beginning January 1, 2020, when a loan portfolio is purchased, the acquired loans are divided into those considered purchased with more than insignificant credit deterioration (“PCD”) and those not considered purchased with more than insignificant credit deterioration. An allowance is established for each population and considers product mix, risk characteristics of the portfolio, bankruptcy experience, delinquency status and refreshed LTV ratios when possible. The allowance established for purchased loans not considered PCD is recognized through provision expense upon acquisition, whereas the allowance established for loans considered PCD at acquisition is offset by an increase in the basis of the acquired loans. Any subsequent increases and decreases in the allowance related to purchased loans, regardless of PCD status, are recognized through provision expense, with charge-offs charged to the allowance. The Company did not have a material amount of PCD loans included in its loan portfolio at September 30, 2021.

The Company’s methodology for determining the appropriate allowance for credit losses also considers the imprecision inherent in the methodologies used and allocated to the various loan portfolios. As a result, amounts determined under the methodologies described above, are adjusted by management to consider the potential impact of other qualitative factors not captured in the quantitative model adjustments which include, but are not limited to the following: model imprecision, imprecision in economic scenario assumptions, and emerging risks related to either changes in the environment that are affecting specific portfolios, or changes in portfolio concentrations over time that may affect model performance. The consideration of these items results in adjustments to allowance amounts included in the Company’s allowance for credit losses for each loan portfolio.

The Company also assesses the credit risk associated with off-balance sheet loan commitments, letters of credit, investment securities and derivatives. Credit risk associated with derivatives is reflected in the fair values recorded for those positions. The liability for off-balance sheet credit exposure related to loan commitments and other credit guarantees is included in other liabilities. Because business processes and credit risks associated with unfunded credit commitments are essentially the same as for loans, the Company utilizes similar processes to estimate its liability for unfunded credit commitments.

Prior to January 1, 2020, the allowance for credit losses was established based on an incurred loss model. The allowance recorded for loans in the commercial lending segment was based on the migration analysis of commercial loans and actual loss experience. The allowance recorded for loans in the consumer lending segment was determined on a homogenous pool basis and primarily included consideration of delinquency status and historical losses. In addition to the amounts determined under the methodologies described above, management also considered the potential impact of qualitative factors.

Activity in the allowance for credit losses by portfolio class was as follows:

Three Months Ended September 30 (Dollars in Millions)	Commercial			Commercial Real Estate			Residential Mortgages			Credit Card			Other Retail			Total Loans
2021
Balance at beginning of period		$1,838			$1,409			$478			$1,891			$   994			$6,610
Add
Provision for credit losses		(75	)		(104	)		3			(23	)		36			(163	)
Deduct
Loans charged-off		40			14			3			154			55			266
Less recoveries of loans charged-off		(26	)		(1	)		(13	)		(43	)		(36	)		(119	)
Net loan charge-offs (recoveries)		14			13			(10	)		111			19			147
Balance at end of period		$1,749			$1,292			$491			$1,757			$1,011			$6,300
2020
Balance at beginning of period		$2,645			$1,269			$633			$2,156			$1,187			$7,890
Add
Provision for credit losses		20			263			(49	)		369			32			635
Deduct
Loans charged-off		193			89			4			236			89			611
Less recoveries of loans charged-off		(15	)		(6	)		(7	)		(35	)		(33	)		(96	)
Net loan charge-offs (recoveries)		178			83			(3	)		201			56			515
Balance at end of period		$2,487			$1,449			$587			$2,324			$1,163			$8,010

Nine Months Ended September 30 (Dollars in Millions)	Commercial			Commercial Real Estate			Residential Mortgages			Credit Card			Other Retail			Total Loans
2021
Balance at beginning of period		$2,423			$1,544			$573			$2,355			$1,115			$8,010
Add
Provision for credit losses		(577	)		(246	)		(107	)		(195	)		(35	)		(1,160	)
Deduct
Loans charged-off		184			28			13			536			193			954
Less recoveries of loans charged-off		(87	)		(22	)		(38	)		(133	)		(124	)		(404	)
Net loan charge-offs (recoveries)		97			6			(25	)		403			69			550
Balance at end of period		$1,749			$1,292			$491			$1,757			$1,011			$6,300
2020
Balance at beginning of period		$1,484			$   799			$433			$1,128			$   647			$4,491
Add
Change in accounting principle (a)		378			(122	)		(30	)		872			401			1,499
Provision for credit losses		988			875			179			988			335			3,365
Deduct
Loans charged-off		406			112			15			775			316			1,624
Less recoveries of loans charged-off		(43	)		(9	)		(20	)		(111	)		(96	)		(279	)
Net loan charge-offs (recoveries)		363			103			(5	)		664			220			1,345
Balance at end of period		$2,487			$1,449			$587			$2,324			$1,163			$8,010

(a) Effective January 1, 2020, the Company adopted accounting guidance which changed impairment recognition of financial instruments to a model that is based on expected losses rather than incurred losses.

The decrease in the allowance for credit losses from December 31, 2020 to September 30, 2021 primarily reflected factors affecting economic conditions during the first nine months of 2021, including the enactment of additional benefits from government stimulus programs and broad vaccine availability in the United States that has reduced the risks associated with COVID-19, contributing to an economic recovery and strong portfolio credit performance. Other factors considered include concerns around inflationary pressures, new virus variants, sustainability of asset values and borrower liquidity, along with the lack of a clear path to government funding.

Credit Quality The credit quality of the Company’s loan portfolios is assessed as a function of net credit losses, levels of nonperforming assets and delinquencies, and credit quality ratings as defined by the Company.

For all loan portfolio classes, loans are considered past due based on the number of days delinquent except for monthly amortizing loans which are classified delinquent based upon the number of contractually required payments not made (for example, two missed payments is considered 30 days delinquent). When a loan is placed on nonaccrual status, unpaid accrued interest is reversed, reducing interest income in the current period.

Commercial lending segment loans are generally placed on nonaccrual status when the collection of principal and interest has become 90 days past due or is otherwise considered doubtful. Commercial lending segment loans are generally fully or partially charged down to the fair value of the collateral securing the loan, less costs to sell, when the loan is placed on nonaccrual.

Consumer lending segment loans are generally charged-off at a specific number of days or payments past due. Residential mortgages and other retail loans secured by 1-4 family properties are generally charged down to the fair

value of the collateral securing the loan, less costs to sell, at 180 days past due. Residential mortgage loans and lines in a first lien position are placed on nonaccrual status in instances where a partial charge-off occurs unless the loan is well secured and in the process of collection. Residential mortgage loans and lines in a junior lien position secured by 1-4 family properties are placed on nonaccrual status at 120 days past due or when they are behind a first lien that has become 180 days or greater past due or placed on nonaccrual status. Any secured consumer lending segment loan whose borrower has had debt discharged through bankruptcy, for which the loan amount exceeds the fair value of the collateral, is charged down to the fair value of the related collateral and the remaining balance is placed on nonaccrual status. Credit card loans continue to accrue interest until the account is charged-off. Credit cards are charged-off at 180 days past due. Other retail loans not secured by 1-4 family properties are charged-off at 120 days past due; and revolving consumer lines are charged-off at 180 days past due. Similar to credit cards, other retail loans are generally not placed on nonaccrual status because of the relative short period of time to charge-off. Certain retail customers having financial difficulties may have the terms of their credit card and other loan agreements modified to require only principal payments and, as such, are reported as nonaccrual.

For all loan classes, interest payments received on nonaccrual loans are generally recorded as a reduction to a loan’s carrying amount while a loan is on nonaccrual and are recognized as interest income upon payoff of the loan. However, interest income may be recognized for interest payments if the remaining carrying amount of the loan is believed to be collectible. In certain circumstances, loans in any class may be restored to accrual status, such as when a loan has demonstrated sustained repayment performance or no amounts are past due and prospects for future payment are no longer in doubt; or when the loan becomes well secured and is in the process of collection. Loans where there has been a partial charge-off may be returned to accrual status if all principal and interest (including amounts previously charged-off) is expected to be collected and the loan is current.

The following table provides a summary of loans by portfolio class, including the delinquency status of those that continue to accrue interest, and those that are nonperforming:

	Accruing
(Dollars in Millions)	Current		30-89 Days Past Due		90 Days or More Past Due		Nonperforming (b)		Total
September 30, 2021
Commercial	$	100,595		$   163		$  39		$   216		$101,013
Commercial real estate		38,459		32		21		296		38,808
Residential mortgages (a)		74,450		153		114		237		74,954
Credit card		21,807		183		147		–		22,137
Other retail		60,224		251		64		157		60,696
Total loans	$	295,535		$   782		$385		$   906		$297,608
December 31, 2020
Commercial	$	102,127		$   314		$  55		$   375		$102,871
Commercial real estate		38,676		183		2		450		39,311
Residential mortgages (a)		75,529		244		137		245		76,155
Credit card		21,918		231		197		–		22,346
Other retail		56,466		318		86		154		57,024
Total loans	$	294,716		$1,290		$477		$1,224		$297,707

(a) At September 30, 2021, $946 million of loans 30–89 days past due and $1.5 billion of loans 90 days or more past due purchased from Government National Mortgage Association (“GNMA”) mortgage pools whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs, were classified as current, compared with $1.4 billion and $1.8 billion at December 31, 2020, respectively.

(b) Substantially all nonperforming loans at September 30, 2021 and December 31, 2020, had an associated allowance for credit losses. The Company recognized interest income on nonperforming loans of $4 million and $9 million for the three months ended September 30, 2021 and 2020, respectively, and $11 million and $19 million for the nine months ended September 30, 2021 and 2020, respectively.

At September 30, 2021, the amount of foreclosed residential real estate held by the Company, and included in other real estate owned (“OREO”), was $17 million, compared with $23 million at December 31, 2020. These amounts excluded $19 million and $33 million at September 30, 2021 and December 31, 2020, respectively, of foreclosed residential real estate related to mortgage loans whose payments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. In addition, the amount of residential mortgage loans secured by residential real estate in the process of foreclosure at September 30, 2021 and December 31, 2020, was $778 million and $1.0 billion, respectively, of which $620 million and $812 million, respectively, related to loans purchased from Government National Mortgage Association (“GNMA”) mortgage pools whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs.

The Company classifies its loan portfolio classes using internal credit quality ratings on a quarterly basis. These ratings include pass, special mention and classified, and are an important part of the Company’s overall credit risk management process and evaluation of the allowance for credit losses. Loans with a pass rating represent those loans not classified on the Company’s rating scale for problem credits, as minimal credit risk has been identified. Special mention loans are those loans that have a potential weakness deserving management’s close attention. Classified loans are those loans where a well-defined weakness has been identified that may put full collection of contractual cash flows at risk. It is possible that others, given the same information, may reach different reasonable conclusions regarding the credit quality rating classification of specific loans.

The following table provides a summary of loans by portfolio class and the Company’s internal credit quality rating:

	September 30, 2021										December 31, 2020
			Criticized										Criticized
(Dollars in Millions)	Pass		Special Mention		Classified (a)		Total Criticized		Total		Pass		Special Mention		Classified (a)		Total Criticized		Total
Commercial
Originated in 2021		$  32,826		$   346		$   277		$     623		$  33,449		$          –		$       –		$       –		$         –		$          –
Originated in 2020		17,202		637		252		889		18,091		34,557		1,335		1,753		3,088		37,645
Originated in 2019		11,851		198		63		261		12,112		17,867		269		349		618		18,485
Originated in 2018		6,853		77		51		128		6,981		12,349		351		176		527		12,876
Originated in 2017		3,213		14		53		67		3,280		5,257		117		270		387		5,644
Originated prior to 2017		3,373		30		40		70		3,443		4,954		128		115		243		5,197
Revolving		23,204		353		100		453		23,657		22,445		299		280		579		23,024
Total commercial		98,522		1,655		836		2,491		101,013		97,429		2,499		2,943		5,442		102,871
Commercial real estate
Originated in 2021		9,456		50		772		822		10,278		–		–		–		–		–
Originated in 2020		8,238		119		435		554		8,792		9,446		461		1,137		1,598		11,044
Originated in 2019		7,382		298		694		992		8,374		9,514		454		1,005		1,459		10,973
Originated in 2018		3,662		142		330		472		4,134		6,053		411		639		1,050		7,103
Originated in 2017		1,943		25		150		175		2,118		2,650		198		340		538		3,188
Originated prior to 2017		3,239		26		103		129		3,368		4,762		240		309		549		5,311
Revolving		1,556		1		187		188		1,744		1,445		9		238		247		1,692
Total commercial real estate		35,476		661		2,671		3,332		38,808		33,870		1,773		3,668		5,441		39,311
Residential mortgages (b)
Originated in 2021		21,045		–		–		–		21,045		–		–		–		–		–
Originated in 2020		18,043		1		5		6		18,049		23,262		1		3		4		23,266
Originated in 2019		8,508		1		18		19		8,527		13,969		1		17		18		13,987
Originated in 2018		3,492		–		21		21		3,513		5,670		1		22		23		5,693
Originated in 2017		4,494		–		21		21		4,515		6,918		1		24		25		6,943
Originated prior to 2017		19,002		–		302		302		19,304		25,921		2		342		344		26,265
Revolving		1		–		–		–		1		1		–		–		–		1
Total residential mortgages		74,585		2		367		369		74,954		75,741		6		408		414		76,155
Credit card (c)		21,990		–		147		147		22,137		22,149		–		197		197		22,346
Other retail
Originated in 2021		17,248		–		3		3		17,251		–		–		–		–		–
Originated in 2020		13,318		–		8		8		13,326		17,589		–		7		7		17,596
Originated in 2019		8,300		–		16		16		8,316		11,605		–		23		23		11,628
Originated in 2018		4,332		–		16		16		4,348		6,814		–		27		27		6,841
Originated in 2017		2,130		–		11		11		2,141		3,879		–		22		22		3,901
Originated prior to 2017		2,259		–		16		16		2,275		3,731		–		29		29		3,760
Revolving		12,400		–		123		123		12,523		12,647		–		110		110		12,757
Revolving converted to term		473		–		43		43		516		503		–		38		38		541
Total other retail		60,460		–		236		236		60,696		56,768		–		256		256		57,024
Total loans		$291,033		$2,318		$4,257		$  6,575		$297,608		$285,957		$4,278		$7,472		$11,750		$297,707
Total outstanding commitments		$645,955		$4,606		$6,342		$10,948		$656,903		$627,606		$8,772		$9,374		$18,146		$645,752

Note: Year of origination is based on the origination date of a loan, or for existing loans the date when the maturity date, pricing or commitment amount is amended.

(a) Classified rating on consumer loans primarily based on delinquency status.

(b) At September 30, 2021, $1.5 billion of GNMA loans 90 days or more past due and $1.2 billion of restructured GNMA loans whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs were classified with a pass rating, compared with $1.8 billion and $1.4 billion at December 31, 2020, respectively.

(c) All credit card loans are considered revolving loans.

Troubled Debt Restructurings In certain circumstances, the Company may modify the terms of a loan to maximize the collection of amounts due when a borrower is experiencing financial difficulties or is expected to experience difficulties

in the near-term. Concessionary modifications are classified as TDRs unless the modification results in only an insignificant delay in payments to be received. The Company recognizes interest on TDRs if the borrower complies with the revised terms and conditions as agreed upon with the Company and has demonstrated repayment performance at a level commensurate with the modified terms over several payment cycles, which is generally six months or greater. To the extent a previous restructuring was insignificant, the Company considers the cumulative effect of past restructurings related to the receivable when determining whether a current restructuring is a TDR.

The following table provides a summary of loans modified as TDRs for the periods presented by portfolio class:

	2021						2020
(Dollars in Millions)	Number of Loans		Pre-Modification Outstanding Loan Balance		Post-Modification Outstanding Loan Balance		Number of Loans		Pre-Modification Outstanding Loan Balance		Post-Modification Outstanding Loan Balance
Three Months Ended September 30
Commercial		506		$     46		$  47		699		$   262		$   159
Commercial real estate		14		12		13		51		105		81
Residential mortgages		171		54		54		374		108		108
Credit card		6,656		38		38		4,699		27		27
Other retail		382		9		9		508		26		26
Total loans, excluding loans purchased from GNMA mortgage pools		7,729		159		161		6,331		528		401
Loans purchased from GNMA mortgage pools		802		113		118		735		106		105
Total loans		8,531		$   272		$279		7,066		$   634		$   506
Nine Months Ended September 30
Commercial		1,736		$   133		$120		2,837		$   505		$   375
Commercial real estate		100		136		125		116		165		141
Residential mortgages		867		299		298		585		142		142
Credit card		17,492		102		103		19,282		110		112
Other retail		2,175		64		58		1,537		50		48
Total loans, excluding loans purchased from GNMA mortgage pools		22,370		734		704		24,357		972		818
Loans purchased from GNMA mortgage pools		1,839		267		276		3,648		514		503
Total loans		24,209		$1,001		$980		28,005		$1,486		$1,321

Residential mortgages, home equity and second mortgages, and loans purchased from GNMA mortgage pools in the table above include trial period arrangements offered to customers during the periods presented. The post-modification balances for these loans reflect the current outstanding balance until a permanent modification is made. In addition, the post-modification balances typically include capitalization of unpaid accrued interest and/or fees under the various modification programs. At September 30, 2021, 5 residential mortgages, 2 home equity and second mortgage loans and 43 loans purchased from GNMA mortgage pools with outstanding balances of less than $1 million, less than $1 million and $5 million, respectively, were in a trial period and have estimated post-modification balances of less than $1 million, less than $1 million and $5 million, respectively, assuming permanent modification occurs at the end of the trial period.

The Company has implemented certain restructuring programs that may result in TDRs. However, many of the Company’s TDRs are also determined on a case-by-case basis in connection with ongoing loan collection processes.

For the commercial lending segment, modifications generally result in the Company working with borrowers on a case-by-case basis. Commercial and commercial real estate modifications generally include extensions of the maturity date and may be accompanied by an increase or decrease to the interest rate, which may not be deemed a market interest rate. In addition, the Company may work with the borrower in identifying other changes that mitigate loss to the Company, which may include additional collateral or guarantees to support the loan. To a lesser extent, the Company may waive contractual principal. The Company classifies all of the above concessions as TDRs to the extent the Company determines that the borrower is experiencing financial difficulty.

Modifications for the consumer lending segment are generally part of programs the Company has initiated. The Company modifies residential mortgage loans under Federal Housing Administration, United States Department of Veterans Affairs, or its own internal programs. Under these programs, the Company offers qualifying homeowners the opportunity to permanently modify their loan and achieve more affordable monthly payments by providing loan concessions. These concessions may include adjustments to interest rates, conversion of adjustable rates to fixed rates, extension of maturity dates or deferrals of payments, capitalization of accrued interest and/or outstanding advances, or in limited situations, partial forgiveness of loan principal. In most instances, participation in residential mortgage loan restructuring programs requires the customer to complete a short-term trial period. A permanent loan modification is

contingent on the customer successfully completing the trial period arrangement, and the loan documents are not modified until that time. The Company reports loans in a trial period arrangement as TDRs and continues to report them as TDRs after the trial period.

Credit card and other retail loan TDRs are generally part of distinct restructuring programs providing customers experiencing financial difficulty with modifications whereby balances may be amortized up to 60 months, and generally include waiver of fees and reduced interest rates.

In addition, the Company considers secured loans to consumer borrowers that have debt discharged through bankruptcy where the borrower has not reaffirmed the debt to be TDRs.

Loan modifications or concessions granted to borrowers resulting directly from the effects of the COVID-19 pandemic, who were otherwise in current payment status, are generally not considered to be TDRs. As of September 30, 2021 and December 31, 2020, approximately $3.0 billion and $10.1 billion, respectively, of loan modifications included on the Company’s consolidated balance sheet related to borrowers impacted by the COVID-19 pandemic, consisting primarily of payment deferrals. 

The following table provides a summary of TDR loans that defaulted (fully or partially charged-off or became 90 days or more past due) for the periods presented, that were modified as TDRs within 12 months previous to default:

	2021				2020
(Dollars in Millions)	Number of Loans		Amount Defaulted		Number of Loans		Amount Defaulted
Three Months Ended September 30
Commercial		244		$  5		305		$  21
Commercial real estate		4		1		5		8
Residential mortgages		20		2		5		2
Credit card		2,069		12		1,363		8
Other retail		124		2		55		1
Total loans, excluding loans purchased from GNMA mortgage pools		2,461		22		1,733		40
Loans purchased from GNMA mortgage pools		29		5		72		9
Total loans		2,490		$27		1,805		$  49
Nine Months Ended September 30
Commercial		856		$29		922		$  49
Commercial real estate		16		7		33		24
Residential mortgages		47		5		23		4
Credit card		5,638		32		5,169		27
Other retail		595		10		245		3
Total loans, excluding loans purchased from GNMA mortgage pools		7,152		83		6,392		107
Loans purchased from GNMA mortgage pools		102		15		427		57
Total loans		7,254		$98		6,819		$164

In addition to the defaults in the table above, the Company had a total of 10 and 45 residential mortgage loans, home equity and second mortgage loans and loans purchased from GNMA mortgage pools for the three months and nine months ended September 30, 2021, respectively, where borrowers did not successfully complete the trial period arrangement and, therefore, are no longer eligible for a permanent modification under the applicable modification program. These loans had aggregate outstanding balances of $1 million and $7 million for the three months and nine months ended September 30, 2021, respectively.

As of September 30, 2021, the Company had $158 million of commitments to lend additional funds to borrowers whose terms of their outstanding owed balances have been modified in TDRs.

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Accounting for Transfers and Servicing of Financial Assets and Variable Interest Entities

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Accounting for Transfers and Servicing of Financial Assets and Variable Interest Entities

 Note 6    Accounting for Transfers and Servicing of Financial Assets and Variable Interest Entities

The Company transfers financial assets in the normal course of business. The majority of the Company’s financial asset transfers are residential mortgage loan sales primarily to government-sponsored enterprises (“GSEs”), transfers of tax-advantaged investments, commercial loan sales through participation agreements, and other individual or portfolio loan and securities sales. In accordance with the accounting guidance for asset transfers, the Company considers any ongoing involvement with transferred assets in determining whether the assets can be derecognized from the balance sheet. Guarantees provided to certain third parties in connection with the transfer of assets are further discussed in Note 16.

For loans sold under participation agreements, the Company also considers whether the terms of the loan participation agreement meet the accounting definition of a participating interest. With the exception of servicing and certain performance-based guarantees, the Company’s continuing involvement with financial assets sold is minimal and generally limited to market customary representation and warranty clauses. Any gain or loss on sale depends on the

previous carrying amount of the transferred financial assets, the consideration received, and any liabilities incurred in exchange for the transferred assets. Upon transfer, any servicing assets and other interests that continue to be held by the Company are initially recognized at fair value. For further information on mortgage servicing rights (“MSRs”), refer to Note 7. On a limited basis, the Company may acquire and package high-grade corporate bonds for select corporate customers, in which the Company generally has no continuing involvement with these transactions. Additionally, the Company is an authorized GNMA issuer and issues GNMA securities on a regular basis. The Company has no other asset securitizations or similar asset-backed financing arrangements that are off-balance sheet.

The Company also provides financial support primarily through the use of waivers of trust and investment management fees associated with various unconsolidated registered money market funds it manages. The Company provided $67 million and $28 million of support to the funds during the three months ended September 30, 2021 and 2020, respectively, and $184 million and $49 million during the nine months ended September 30, 2021 and 2020, respectively.

The Company is involved in various entities that are considered to be variable interest entities (“VIEs”). The Company’s investments in VIEs are primarily related to investments promoting affordable housing, community development and renewable energy sources. Some of these tax-advantaged investments support the Company’s regulatory compliance with the Community Reinvestment Act. The Company’s investments in these entities generate a return primarily through the realization of federal and state income tax credits, and other tax benefits, such as tax deductions from operating losses of the investments, over specified time periods. These tax credits are recognized as a reduction of tax expense or, for investments qualifying as investment tax credits, as a reduction to the related investment asset. The Company recognized federal and state income tax credits related to its affordable housing and other tax-advantaged investments in tax expense of $113 million and $142 million for the three months ended September 30, 2021 and 2020, respectively, and $356 million and $437 million for the nine months ended September 30, 2021 and 2020, respectively. The Company also recognized $75 million and $118 million of investment tax credits for the three months ended September 30, 2021 and 2020, respectively, and $235 million and $307 million for the nine months ended September 30, 2021 and 2020, respectively. The Company recognized $101 million and $142 million of expenses related to all of these investments for the three months ended September 30, 2021 and 2020, respectively, of which $83 million and $97 million, respectively, were included in tax expense and the remaining amounts were included in noninterest expense. The Company recognized $333 million and $429 million of expenses related to all of these investments for the nine months ended September 30, 2021 and 2020, respectively, of which $262 million and $297 million, respectively, were included in tax expense and the remaining amounts were included in noninterest expense.

The Company is not required to consolidate VIEs in which it has concluded it does not have a controlling financial interest, and thus is not the primary beneficiary. In such cases, the Company does not have both the power to direct the entities’ most significant activities and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs.

The Company’s investments in these unconsolidated VIEs are carried in other assets on the Consolidated Balance Sheet. The Company’s unfunded capital and other commitments related to these unconsolidated VIEs are generally carried in other liabilities on the Consolidated Balance Sheet. The Company’s maximum exposure to loss from these unconsolidated VIEs include the investment recorded on the Company’s Consolidated Balance Sheet, net of unfunded capital commitments, and previously recorded tax credits which remain subject to recapture by taxing authorities based on compliance features required to be met at the project level. While the Company believes potential losses from these investments are remote, the maximum exposure was determined by assuming a scenario where the community-based business and housing projects completely fail and do not meet certain government compliance requirements resulting in recapture of the related tax credits.

The following table provides a summary of investments in community development and tax-advantaged VIEs that the Company has not consolidated:

(Dollars in Millions)	September 30, 2021		December 31, 2020
Investment carrying amount	$	4,865	$	5,378
Unfunded capital and other commitments		2,180		2,334
Maximum exposure to loss		10,368		11,219

The Company also has noncontrolling financial investments in private investment funds and partnerships considered to be VIEs, which are not consolidated. The Company’s recorded investment in these entities, carried in other assets on the Consolidated Balance Sheet, was approximately $40 million at September 30, 2021 and $35 million at December 31, 2020. The maximum exposure to loss related to these VIEs was $81 million at September 30, 2021 and $57 million at December 31, 2020, representing the Company’s investment balance and its unfunded commitments to invest additional amounts.

The Company’s individual net investments in unconsolidated VIEs, which exclude any unfunded capital commitments, ranged from less than $1 million to $71 million at September 30, 2021, compared with less than $1 million to $78 million at December 31, 2020.

The Company is required to consolidate VIEs in which it has concluded it has a controlling financial interest. The Company sponsors entities to which it transfers its interests in tax-advantaged investments to third parties. At September 30, 2021, approximately $5.1 billion of the Company’s assets and $3.6 billion of its liabilities included on the Consolidated Balance Sheet were related to community development and tax-advantaged investment VIEs which the Company has consolidated, primarily related to these transfers. These amounts compared to $4.9 billion and $3.7 billion, respectively, at December 31, 2020. The majority of the assets of these consolidated VIEs are reported in other assets, and the liabilities are reported in long-term debt and other liabilities. The assets of a particular VIE are the primary source of funds to settle its obligations. The creditors of the VIEs do not have recourse to the general credit of the Company. The Company’s exposure to the consolidated VIEs is generally limited to the carrying value of its variable interests plus any related tax credits previously recognized or transferred to others with a guarantee.

In addition, the Company sponsors a municipal bond securities tender option bond program. The Company controls the activities of the program’s entities, is entitled to the residual returns and provides liquidity and remarketing arrangements to the program. As a result, the Company has consolidated the program’s entities. At September 30, 2021, $1.7 billion of available-for-sale investment securities and $1.2 billion of short-term borrowings on the Consolidated Balance Sheet were related to the tender option bond program, compared with $2.4 billion of available-for-sale investment securities and $1.5 billion of short-term borrowings at December 31, 2020.

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Mortgage Servicing Rights

9 Months Ended

Sep. 30, 2021

Text Block [Abstract]

Mortgage Servicing Rights

 Note 7    Mortgage Servicing Rights

The Company capitalizes MSRs as separate assets when loans are sold and servicing is retained. MSRs may also be purchased from others. The Company carries MSRs at fair value, with changes in the fair value recorded in earnings during the period in which they occur. The Company serviced $219.3 billion of residential mortgage loans for others at September 30, 2021, and $211.8 billion at December 31, 2020, including subserviced mortgages with no corresponding MSR asset. Included in mortgage banking revenue are the MSR fair value changes arising from market rate and model assumption changes, net of the value change in derivatives used to economically hedge MSRs. These changes resulted in a net loss of $21 million and a net gain of $9 million for the three months ended September 30, 2021 and 2020, respectively, and a net loss of $168 million and a net gain of $58 million for the nine months ended September 30, 2021 and 2020, respectively. Loan servicing and ancillary fees, not including valuation changes, included in mortgage banking revenue were $183 million and $177 million for the three months ended September 30, 2021 and 2020, respectively, and $536 million and $537 million for the nine months ended September 30, 2021 and 2020, respectively.

Changes in fair value of capitalized MSRs are summarized as follows:

	Three Months Ended September 30						Nine Months Ended September 30
(Dollars in Millions)	2021			2020			2021			2020
Balance at beginning of period	$	2,713		$	1,840		$	2,210		$	2,546
Rights purchased		9			8			36			16
Rights capitalized		284			321			896			712
Rights sold (a)		—			1			1			3
Changes in fair value of MSRs
Due to fluctuations in market interest rates (b)		53			(8	)		307			(815	)
Due to revised assumptions or models (c)		(30	)		(7	)		(169	)		37
Other changes in fair value (d)		(119	)		(177	)		(371	)		(521	)
Balance at end of period	$	2,910		$	1,978		$	2,910		$	1,978

(a) MSRs sold include those having a negative fair value, resulting from the loans being severely delinquent.

(b) Includes changes in MSR value associated with changes in market interest rates, including estimated prepayment rates and anticipated earnings on escrow deposits.

(c) Includes changes in MSR value not caused by changes in market interest rates, such as changes in assumed cost to service, ancillary income and option adjusted spread, as well as the impact of any model changes.

(d) Primarily the change in MSR value from passage of time and cash flows realized (decay), but also includes the impact of changes to expected cash flows not associated with changes in market interest rates, such as the impact of delinquencies.

The estimated sensitivity to changes in interest rates of the fair value of the MSR portfolio and the related derivative instruments was as follows:

	September 30, 2021																		December 31, 2020
(Dollars in Millions)	Down 100 bps			Down 50 bps			Down 25 bps			Up 25 bps			Up 50 bps			Up 100 bps			Down 100 bps			Down 50 bps			Down 25 bps			Up 25 bps			Up 50 bps			Up 100 bps
MSR portfolio	$	(619	)	$	(320	)	$	(161	)	$	154		$	294		$	520		$	(442	)	$	(271	)	$	(150	)	$	169		$	343		$	671
Derivative instrument hedges		574			290			144			(137	)		(270	)		(524	)		523			281			145			(149	)		(304	)		(625	)
Net sensitivity	$	(45	)	$	(30	)	$	(17	)	$	17		$	24		$	(4	)	$	81		$	10		$	(5	)	$	20		$	39		$	46

The fair value of MSRs and their sensitivity to changes in interest rates is influenced by the mix of the servicing portfolio and characteristics of each segment of the portfolio. The Company’s servicing portfolio consists of the distinct portfolios of government-insured mortgages, conventional mortgages and Housing Finance Agency (“HFA”) mortgages. The servicing portfolios are predominantly comprised of fixed-rate agency loans with limited adjustable-rate or jumbo mortgage loans. The HFA servicing portfolio is comprised of loans originated under state and local housing authority program guidelines which assist purchases by first-time or low- to moderate-income homebuyers through a favorable rate subsidy, down payment and/or closing cost assistance on government- and conventional-insured mortgages.

A summary of the Company’s MSRs and related characteristics by portfolio was as follows:

	September 30, 2021												December 31, 2020
(Dollars in Millions)	HFA			Government			Conventional(d)			Total			HFA			Government			Conventional(d)			Total
Servicing portfolio (a)	$	40,038		$	22,392		$	153,543		$	215,973		$	40,396		$	25,474		$	143,085		$	208,955
Fair value	$	508		$	304		$	2,098		$	2,910		$	406		$	261		$	1,543		$	2,210
Value (bps) (b)		127			136			137			135			101			102			108			106
Weighted-average servicing fees (bps)		36			41			30			32			35			40			30			32
Multiple (value/servicing fees)		3.56			3.34			4.51			4.16			2.87			2.56			3.55			3.26
Weighted-average note rate		4.14	%		3.75	%		3.48	%		3.63	%		4.43	%		3.91	%		3.78	%		3.92	%
Weighted-average age (in years)		3.8			5.8			3.4			3.7			3.8			5.6			4.2			4.3
Weighted-average expected prepayment (constant prepayment rate)		11.3	%		13.4	%		9.4	%		10.2	%		14.1	%		18.0	%		13.8	%		14.4	%
Weighted-average expected life (in years)		6.6			5.5			7.0			6.8			5.6			4.3			5.5			5.4
Weighted-average option adjusted spread (c)		7.7	%		7.3	%		6.5	%		6.8	%		7.7	%		7.3	%		6.2	%		6.6	%

(a) Represents principal balance of mortgages having corresponding MSR asset.

(b) Calculated as fair value divided by the servicing portfolio.

(c) Option adjusted spread is the incremental spread added to the risk-free rate to reflect optionality and other risk inherent in the MSRs.

(d) Represents loans sold primarily to GSEs.

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Preferred Stock

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Preferred Stock

 Note 8    Preferred Stock

At September 30, 2021 and December 31, 2020, the Company had authority to issue 50 million shares of preferred stock. The number of shares issued and outstanding and the carrying amount of each outstanding series of the Company’s preferred stock were as follows:

	September 30, 2021								December 31, 2020
(Dollars in Millions)	Shares Issued and Outstanding		Liquidation Preference		Discount		Carrying Amount		Shares Issued and Outstanding		Liquidation Preference		Discount		Carrying Amount
Series A		12,510	$	1,251	$	145	$	1,106		12,510	$	1,251	$	145	$	1,106
Series B		40,000		1,000		—		1,000		40,000		1,000		—		1,000
Series F		44,000		1,100		12		1,088		44,000		1,100		12		1,088
Series I		—		—		—		—		30,000		750		5		745
Series J		40,000		1,000		7		993		40,000		1,000		7		993
Series K		23,000		575		10		565		23,000		575		10		565
Series L		20,000		500		14		486		20,000		500		14		486
Series M		30,000		750		20		730		—		—		—		—
Total preferred stock (a)		209,510	$	6,176	$	208	$	5,968		209,510	$	6,176	$	193	$	5,983

(a) The par value of all shares issued and outstanding at September 30, 2021 and December 31, 2020, was $1.00 per share.

During the first nine months of 2021, the Company issued depositary shares representing an ownership interest in 30,000 shares of Series M Non-Cumulative Perpetual Preferred Stock with a liquidation preference of $25,000 per share (the “Series M Preferred Stock”). The Series M Preferred Stock has no stated maturity and will not be subject to

any sinking fund or other obligation of the Company. Dividends, if declared, will accrue and be payable quarterly, in arrears, at a rate per annum equal to 4.00 percent. The Series M Preferred Stock is redeemable at the Company’s option, in whole or in part, on or after April 15, 2026. The Series M Preferred Stock is redeemable at the Company’s option, in whole, but not in part, prior to April 15, 2026 within 90 days following an official administrative or judicial decision, amendment to, or change in the laws or regulations that would not allow the Company to treat the full liquidation value of the Series M Preferred Stock as Tier 1 capital for purposes of the capital adequacy guidelines of the Federal Reserve Board.

During the first nine months of 2021, the Company redeemed all outstanding shares of the Series I Non-Cumulative Perpetual Preferred Stock (the “Series I Preferred Stock”) at a redemption price equal to the liquidation preference amount. The Company included a $5 million loss in the computation of diluted earnings per common share for the first nine months of 2021, which represents the stock issuance costs recorded in preferred stock upon the issuance of the Series I Preferred Stock that were reclassified to retained earnings on the date the Company provided notice of its intent to redeem the outstanding shares.

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Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

 Note 9    Accumulated Other Comprehensive Income (Loss)

Shareholders' equity is affected by transactions and valuations of asset and liability positions that require adjustments to accumulated other comprehensive income (loss). The reconciliation of the transactions affecting accumulated other comprehensive income (loss) included in shareholders' equity is as follows:

Three Months Ended September 30 (Dollars in Millions)	Unrealized Gains (Losses) on Investment Securities Available-For- Sale			Unrealized Gains (Losses) on Derivative Hedges			Unrealized Gains (Losses) on Retirement Plans			Foreign Currency Translation			Total
2021
Balance at beginning of period	$	735		$	(107	)	$	(1,783	)	$	(47	)	$	(1,202	)
Changes in unrealized gains and losses		(825	)		8			—			—			(817	)
Foreign currency translation adjustment (a)		—			—			—			(1	)		(1	)
Reclassification to earnings of realized gains and losses		(20	)		8			39			—			27
Applicable income taxes		215			(4	)		(10	)		—			201
Balance at end of period	$	105		$	(95	)	$	(1,754	)	$	(48	)	$	(1,792	)
2020
Balance at beginning of period	$	2,701		$	(240	)	$	(1,589	)	$	(74	)	$	798
Changes in unrealized gains and losses		(305	)		27			—			—			(278	)
Foreign currency translation adjustment (a)		—			—			—			6			6
Reclassification to earnings of realized gains and losses		(12	)		3			32			—			23
Applicable income taxes		81			(7	)		(9	)		(2	)		63
Balance at end of period	$	2,465		$	(217	)	$	(1,566	)	$	(70	)	$	612

(a) Represents the impact of changes in foreign currency exchange rates on the Company's investment in foreign operations and related hedges.

Nine Months Ended September 30 (Dollars in Millions)	Unrealized Gains (Losses) on Investment Securities Available-For- Sale			Unrealized Gains (Losses) on Derivative Hedges			Unrealized Gains (Losses) on Retirement Plans			Foreign Currency Translation			Total
2021
Balance at beginning of period	$	2,417		$	(189	)	$	(1,842	)	$	(64	)	$	322
Changes in unrealized gains and losses		(3,008	)		121			—			—			(2,887	)
Foreign currency translation adjustment (a)		—			—			—			23			23
Reclassification to earnings of realized gains and losses		(88	)		4			118			—			34
Applicable income taxes		784			(31	)		(30	)		(7	)		716
Balance at end of period	$	105		$	(95	)	$	(1,754	)	$	(48	)	$	(1,792	)
2020
Balance at beginning of period	$	379		$	(51	)	$	(1,636	)	$	(65	)	$	(1,373	)
Changes in unrealized gains and losses		2,935			(230	)		—			—			2,705
Foreign currency translation adjustment (a)		—			—			—			(6	)		(6	)
Reclassification to earnings of realized gains and losses		(143	)		7			94			—			(42	)
Applicable income taxes		(706	)		57			(24	)		1			(672	)
Balance at end of period	$	2,465		$	(217	)	$	(1,566	)	$	(70	)	$	612

(a) Represents the impact of changes in foreign currency exchange rates on the Company's investment in foreign operations and related hedges.

Additional detail about the impact to net income for items reclassified out of accumulated other comprehensive income (loss) and into earnings is as follows:

	Impact to Net Income												Affected Line Item in the Consolidated Statement of Income
	Three Months Ended September 30						Nine Months Ended September 30
(Dollars in Millions)	2021			2020			2021			2020
Unrealized gains (losses) on investment securities available-for-sale
Realized gains (losses) on sale of investment securities	$	20		$	12		$	88		$	143		Securities gains (losses), net
		(5	)		(3	)		(22	)		(36	)	Applicable income taxes
		15			9			66			107		Net-of-tax
Unrealized gains (losses) on derivative hedges
Realized gains (losses) on derivative hedges		(8	)		(3	)		(4	)		(7	)	Interest expense
		2			1			1			2		Applicable income taxes
		(6	)		(2	)		(3	)		(5	)	Net-of-tax
Unrealized gains (losses) on retirement plans
Actuarial gains (losses) and prior service cost (credit) amortization		(39	)		(32	)		(118	)		(94	)	Other noninterest expense
		10			9			30			24		Applicable income taxes
		(29	)		(23	)		(88	)		(70	)	Net-of-tax
Total impact to net income	$	(20	)	$	(16	)	$	(25	)	$	32

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Earnings Per Share

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Earnings Per Share

 Note 10    Earnings Per Share

The components of earnings per share were:

	Three Months Ended September 30						Nine Months Ended September 30
(Dollars and Shares in Millions, Except Per Share Data)	2021			2020			2021			2020
Net income attributable to U.S. Bancorp	$	2,028		$	1,580		$	6,290		$	3,440
Preferred dividends		(84	)		(79	)		(232	)		(229	)
Impact of preferred stock redemption (a)		—			—			(5	)		—
Earnings allocated to participating stock awards		(10	)		(7	)		(30	)		(15	)
Net income applicable to U.S. Bancorp common shareholders	$	1,934		$	1,494		$	6,023		$	3,196
Average common shares outstanding		1,483			1,506			1,491			1,510
Net effect of the exercise and assumed purchase of stock awards		1			1			1			1
Average diluted common shares outstanding		1,484			1,507			1,492			1,511
Earnings per common share	$	1.30		$	.99		$	4.04		$	2.12
Diluted earnings per common share	$	1.30		$	.99		$	4.04		$	2.11

(a) Represents stock issuance costs originally recorded in preferred stock upon the issuance of the Company’s Series I Preferred Stock that were reclassified to retained earnings on the date the Company announced its intent to redeem the outstanding shares.

Options outstanding at September 30, 2020, to purchase 4 million and 2 million common shares for the three months and nine months ended September 30, 2020, respectively, were not included in the computation of diluted earnings per share because they were antidilutive.

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Employee Benefits

9 Months Ended

Sep. 30, 2021

Retirement Benefits [Abstract]

Employee Benefits

 Note 11    Employee Benefits

The components of net periodic benefit cost for the Company's retirement plans were:

	Three Months Ended September 30												Nine Months Ended September 30
	Pension Plans						Postretirement Welfare Plan						Pension Plans						Postretirement Welfare Plan
(Dollars in Millions)	2021			2020			2021			2020			2021			2020			2021			2020
Service cost	$	66		$	58		$	—		$	—		$	198		$	176		$	—		$	—
Interest cost		54			59			1			—			164			176			1			1
Expected return on plan assets		(112	)		(101	)		—			—			(337	)		(302	)		—			(2	)
Prior service cost (credit) amortization		—			—			(1	)		—			(1	)		—			(3	)		(2	)
Actuarial loss (gain) amortization		42			34			(2	)		(2	)		127			101			(5	)		(5	)
Net periodic benefit cost (a)	$	50		$	50		$	(2	)	$	(2	)	$	151		$	151		$	(7	)	$	(8	)

(a) Service cost is included in employee benefits expense on the Consolidated Statement of Income. All other components are included in other noninterest expense on the Consolidated Statement of Income.

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Income Taxes

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Note 12    Income Taxes

The components of income tax expense were:

	Three Months Ended September 30					Nine Months Ended September 30
(Dollars in Millions)	2021		2020			2021		2020
Federal
Current	$	354	$	(53	)	$	1,057	$	966
Deferred		99		306			305		(459	)
Federal income tax		453		253			1,362		507
State
Current		94		92			297		298
Deferred		17		2			63		(134	)
State income tax		111		94			360		164
Total income tax provision	$	564	$	347		$	1,722	$	671

A reconciliation of expected income tax expense at the federal statutory rate of 21 percent to the Company’s applicable income tax expense follows:

	Three Months Ended September 30						Nine Months Ended September 30
(Dollars in Millions)	2021			2020			2021			2020
Tax at statutory rate	$	546		$	406		$	1,686		$	867
State income tax, at statutory rates, net of federal tax benefit		108			75			327			170
Tax effect of
Tax credits and benefits, net of related expenses		(91	)		(82	)		(267	)		(280	)
Exam resolutions		—			(47	)		—			(47	)
Tax-exempt income		(28	)		(29	)		(85	)		(87	)
Other items		29			24			61			48
Applicable income taxes	$	564		$	347		$	1,722		$	671

The Company’s income tax returns are subject to review and examination by federal, state, local and foreign government authorities. On an ongoing basis, numerous federal, state, local and foreign examinations are in progress and cover multiple tax years. As of September 30, 2021, federal tax examinations for all years ending through December 31, 2014 are completed and resolved. The Company's tax returns for the years ended December 31, 2015, 2016, 2017 and 2018 are under examination by the Internal Revenue Service. The years open to examination by foreign, state and local government authorities vary by jurisdiction.

The Company’s net deferred tax asset was $946 million at September 30, 2021 and $597 million at December 31, 2020.

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Derivative Instruments

9 Months Ended

Sep. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

 Note 13    Derivative Instruments

In the ordinary course of business, the Company enters into derivative transactions to manage various risks and to accommodate the business requirements of its customers. The Company recognizes all derivatives on the Consolidated Balance Sheet at fair value in other assets or in other liabilities. On the date the Company enters into a derivative contract, the derivative is designated as either a fair value hedge, cash flow hedge, net investment hedge, or a designation is not made as it is a customer-related transaction, an economic hedge for asset/liability risk management purposes or another stand-alone derivative created through the Company’s operations (“free-standing derivative”). When a derivative is designated as a fair value, cash flow or net investment hedge, the Company performs an assessment, at inception and, at a minimum, quarterly thereafter, to determine the effectiveness of the derivative in offsetting changes in the value or cash flows of the hedged item(s).

Fair Value Hedges These derivatives are interest rate swaps the Company uses to hedge the change in fair value related to interest rate changes of its underlying available-for-sale investment securities and fixed-rate debt. Changes in the fair value of derivatives designated as fair value hedges, and changes in the fair value of the hedged items, are recorded in earnings.

Cash Flow Hedges These derivatives are interest rate swaps the Company uses to hedge the forecasted cash flows from its underlying variable-rate debt. Changes in the fair value of derivatives designated as cash flow hedges are recorded in other comprehensive income (loss) until the cash flows of the hedged items are realized. If a derivative designated as a

cash flow hedge is terminated or ceases to be highly effective, the gain or loss in other comprehensive income (loss) is amortized to earnings over the period the forecasted hedged transactions impact earnings. If a hedged forecasted transaction is no longer probable, hedge accounting is ceased and any gain or loss included in other comprehensive income (loss) is reported in earnings immediately, unless the forecasted transaction is at least reasonably possible of occurring, whereby the amounts remain within other comprehensive income (loss). At September 30, 2021, the Company had $95 million (net-of-tax) of realized and unrealized losses on derivatives classified as cash flow hedges recorded in other comprehensive income (loss), compared with $189 million (net-of-tax) of realized and unrealized losses at December 31, 2020. The estimated amount to be reclassified from other comprehensive income (loss) into earnings during both the remainder of 2021 and the next 12 months are losses of $1 million (net-of-tax). All cash flow hedges were highly effective for the three and nine months ended September 30, 2021.

Net Investment Hedges The Company uses forward commitments to sell specified amounts of certain foreign currencies, and non-derivative debt instruments, to hedge the volatility of its net investment in foreign operations driven by fluctuations in foreign currency exchange rates. The carrying amount of non-derivative debt instruments designated as net investment hedges was $1.4 billion at September 30, 2021 and December 31, 2020.

Other Derivative Positions The Company enters into free-standing derivatives to mitigate interest rate risk and for other risk management purposes. These derivatives include forward commitments to sell to-be-announced securities (“TBAs”) and other commitments to sell residential mortgage loans, which are used to economically hedge the interest rate risk related to mortgage loans held for sale (“MLHFS”) and unfunded mortgage loan commitments. The Company also enters into interest rate swaps, swaptions, forward commitments to buy TBAs, U.S. Treasury and Eurodollar futures and options on U.S. Treasury futures to economically hedge the change in the fair value of the Company’s MSRs. The Company also enters into foreign currency forwards to economically hedge remeasurement gains and losses the Company recognizes on foreign currency denominated assets and liabilities. In addition, the Company acts as a seller and buyer of interest rate derivatives and foreign exchange contracts for its customers. The Company mitigates the market and liquidity risk associated with these customer derivatives by entering into similar offsetting positions with broker-dealers, or on a portfolio basis by entering into other derivative or non-derivative financial instruments that partially or fully offset the exposure to earnings from these customer-related positions. The Company’s customer derivatives and related hedges are monitored and reviewed by the Company’s Market Risk Committee, which establishes policies for market risk management, including exposure limits for each portfolio. The Company also has derivative contracts that are created through its operations, including certain unfunded mortgage loan commitments and swap agreements related to the sale of a portion of its Class B common and preferred shares of Visa Inc. Refer to Note 15 for further information on these swap agreements.

The following table summarizes the asset and liability management derivative positions of the Company:

	Asset Derivatives						Liability Derivatives
(Dollars in Millions)	Notional Value		Fair Value		Weighted- Average Remaining Maturity In Years		Notional Value		Fair Value		Weighted- Average Remaining Maturity In Years
September 30, 2021
Fair value hedges
Interest rate contracts
Receive fixed/pay floating swaps	$	700	$	—		.04	$	2,250	$	—		3.70
Pay fixed/receive floating swaps		1,330		—		9.23		1,850		—		8.95
Cash flow hedges
Interest rate contracts
Pay fixed/receive floating swaps		—		—		—		250		—		.23
Net investment hedges
Foreign exchange forward contracts		826		7		.06		—		—		—
Other economic hedges
Interest rate contracts
Futures and forwards
Buy		5,325		29		.07		10,347		69		.05
Sell		28,069		139		.29		17,637		57		.14
Options
Purchased		16,930		235		3.34		—		—		—
Written		3,620		78		.09		7,541		241		2.11
Receive fixed/pay floating swaps		4,423		—		4.38		5,690		—		10.29
Pay fixed/receive floating swaps		2,006		—		4.26		4,562		—		4.24
Foreign exchange forward contracts		292		2		.04		275		2		.05
Equity contracts		21		2		.31		184		5		.70
Other (a)		601		9		.02		2,386		147		1.31
Total	$	64,143	$	501			$	52,972	$	521
December 31, 2020
Fair value hedges
Interest rate contracts
Receive fixed/pay floating swaps	$	8,400	$	—		1.76	$	—	$	—		—
Pay fixed/receive floating swaps		—		—		—		100		—		9.63
Cash flow hedges
Interest rate contracts
Pay fixed/receive floating swaps		—		—		—		3,250		—		4.59
Net investment hedges
Foreign exchange forward contracts		479		—		.06		336		3		.06
Other economic hedges
Interest rate contracts
Futures and forwards
Buy		16,431		73		.50		1,925		5		.07
Sell		10,440		48		.04		28,976		157		.07
Options
Purchased		11,610		121		4.11		—		—		—
Written		5,073		202		.13		7,770		198		2.53
Receive fixed/pay floating swaps		11,064		—		7.31		907		—		23.43
Pay fixed/receive floating swaps		78		—		13.68		8,538		—		5.67
Foreign exchange forward contracts		292		1		.04		341		2		.05
Equity contracts		127		3		.39		45		—		.46
Other (a)		47		1		.11		1,832		183		2.44
Total	$	64,041	$	449			$	54,020	$	548

(a) Includes derivative liability swap agreements related to the sale of a portion of the Company’s Class B common and preferred shares of Visa Inc. The Visa swap agreements had a total notional value, fair value and weighted-average remaining maturity of $1.8 billion, $139 million and 1.75 years at September 30, 2021, respectively, compared to $1.8 billion, $182 million and 2.50 years at December 31, 2020, respectively. In addition, includes short-term underwriting purchase and sale commitments with total asset and liability notional values of $602 million at September 30, 2021, and $47 million at December 31, 2020.

The following table summarizes the customer-related derivative positions of the Company:

	Asset Derivatives						Liability Derivatives
(Dollars in Millions)	Notional Value		Fair Value		Weighted- Average Remaining Maturity In Years		Notional Value		Fair Value		Weighted- Average Remaining Maturity In Years
September 30, 2021
Interest rate contracts
Receive fixed/pay floating swaps	$	124,770	$	2,398		4.80	$	46,250	$	296		6.61
Pay fixed/receive floating swaps		47,573		80		6.65		119,027		784		4.51
Other (a)		8,463		1		3.98		7,260		3		4.66
Options
Purchased		85,251		217		1.29		2,701		41		1.86
Written		2,690		41		1.85		79,781		192		1.23
Futures
Buy		3,456		—		.14		318		—		1.97
Sell		2,583		—		1.43		565		—		.45
Foreign exchange rate contracts
Forwards, spots and swaps		38,518		1,112		1.20		39,988		1,121		1.45
Options
Purchased		629		18		.96		—		—		—
Written		—		—		—		629		18		.96
Credit contracts		2,737		—		2.49		6,934		6		4.41
Total	$	316,670	$	3,867			$	303,453	$	2,461
December 31, 2020
Interest rate contracts
Receive fixed/pay floating swaps	$	144,859	$	3,782		4.93	$	12,027	$	99		8.72
Pay fixed/receive floating swaps		15,048		2		8.43		134,963		1,239		4.71
Other (a)		9,921		6		3.75		6,387		3		4.22
Options
Purchased		72,655		111		1.40		1,454		46		2.96
Written		1,736		46		2.76		68,205		81		1.25
Futures
Buy		1,851		—		1.22		924		—		.05
Sell		—		—		—		4,090		—		.72
Foreign exchange rate contracts
Forwards, spots and swaps		44,845		1,590		.96		45,992		1,565		1.13
Options
Purchased		519		14		.90		—		—		—
Written		—		—		—		519		14		.90
Credit contracts		2,876		1		2.75		7,479		7		3.81
Total	$	294,310	$	5,552			$	282,040	$	3,054

(a) Primarily represents floating rate interest rate swaps that pay based on differentials between specified interest rate indexes.

The table below shows the effective portion of the gains (losses) recognized in other comprehensive income (loss) and the gains (losses) reclassified from other comprehensive income (loss) into earnings (net-of-tax):

	Three Months Ended September 30											Nine Months Ended September 30
	Gains (Losses) Recognized in Other Comprehensive Income (Loss)					Gains (Losses) Reclassified from Other Comprehensive Income (Loss) into Earnings						Gains (Losses) Recognized in Other Comprehensive Income (Loss)					Gains (Losses) Reclassified from Other Comprehensive Income (Loss) into Earnings
(Dollars in Millions)	2021		2020			2021			2020			2021		2020			2021			2020
Asset and Liability Management Positions
Cash flow hedges
Interest rate contracts	$	6	$	21		$	(6	)	$	(2	)	$	91	$	(171	)	$	(3	)	$	(5	)
Net investment hedges
Foreign exchange forward contracts		17		(4	)		—			—			16		6			—			—
Non-derivative debt instruments		27		(45	)		—			—			61		(41	)		—			—

Note: The Company does not exclude components from effectiveness testing for cash flow and net investment hedges.

The table below shows the effect of fair value and cash flow hedge accounting on the Consolidated Statement of Income:

	Interest Income					Interest Expense						Interest Income					Interest Expense
	Three Months Ended September 30											Nine Months Ended September 30
(Dollars in Millions)	2021			2020		2021			2020			2021			2020		2021			2020
Total amount of income and expense line items presented in the Consolidated Statement of Income in which the effects of fair value or cash flow hedges are recorded	$	3,409		$	3,573	$	238		$	346		$	10,132		$	11,361	$	761		$	1,711
Asset and Liability Management Positions
Fair value hedges
Interest rate contract derivatives		45			—		112			28			14			—		185			(166	)
Hedged items		(45	)		—		(113	)		(27	)		(15	)		—		(185	)		167
Cash flow hedges
Interest rate contract derivatives		—			—		8			3			—			—		4			7

Note: The Company does not exclude components from effectiveness testing for fair value and cash flow hedges. The Company reclassified losses of $13 million and $40 million into earnings during the three and nine months ended September 30, 2021, respectively, as a result of realized cash flows on discontinued cash flow hedges. The Company reclassified losses of $18 million and $24 million into earnings during the three and nine months ended September 30, 2020, respectively, as a result of realized cash flows on discontinued cash flow hedges. No amounts were reclassified into earnings on discontinued cash flow hedges because it is probable the original hedged forecasted cash flows will not occur. 

The table below shows cumulative hedging adjustments and the carrying amount of assets and liabilities designated in fair value hedges:

	Carrying Amount of the Hedged Assets and Liabilities				Cumulative Hedging Adjustment (a)
(Dollars in Millions)	September 30, 2021		December 31, 2020		September 30, 2021			December 31, 2020
Line Item in the Consolidated Balance Sheet
Available-for-sale investment securities	$	3,127	$	99	$	(22	)	$	(1	)
Long-term debt		2,940		8,567		692			903

(a) The cumulative hedging adjustment related to discontinued hedging relationships on available-for-sale investment securities and long-term debt was $(6) million and $700 million, respectively, at September 30, 2021. The cumulative hedging adjustment related to discontinued hedging relationships on long-term debt was $726 million at December 31, 2020.

The table below shows the gains (losses) recognized in earnings for other economic hedges and the customer-related positions:

	Location of Gains (Losses) Recognized in Earnings		Three Months Ended September 30						Nine Months Ended September 30
(Dollars in Millions)			2021			2020			2021			2020
Asset and Liability Management Positions
Other economic hedges
Interest rate contracts
Futures and forwards		Mortgage banking revenue/ other noninterest income	$	101		$	46		$	432		$	53
Purchased and written options		Mortgage banking revenue		171			428			436			1,173
Swaps		Mortgage banking revenue		(39	)		(51	)		(236	)		724
Foreign exchange forward contracts		Other noninterest income		9			(2	)		(1	)		9
Equity contracts		Compensation expense		1			3			6			—
Other		Other noninterest income		2			(69	)		3			(70	)
Customer-Related Positions
Interest rate contracts
Swaps		Commercial products revenue		26			59			78			103
Purchased and written options		Commercial products revenue		(1	)		(14	)		(4	)		3
Futures		Commercial products revenue		—			—			—			(18	)
Foreign exchange rate contracts
Forwards, spots and swaps		Commercial products revenue		23			20			69			54
Purchased and written options		Commercial products revenue		1			1			1			1
Credit contracts		Commercial products revenue		(1	)		(10	)		(3	)		(15	)

Derivatives are subject to credit risk associated with counterparties to the derivative contracts. The Company measures that credit risk using a credit valuation adjustment and includes it within the fair value of the derivative. The Company manages counterparty credit risk through diversification of its derivative positions among various counterparties, by entering into derivative positions that are centrally cleared through clearinghouses, by entering into master netting arrangements and, where possible, by requiring collateral arrangements. A master netting arrangement allows two counterparties, who have multiple derivative contracts with each other, the ability to net settle amounts under all contracts, including any related collateral, through a single payment and in a single currency. Collateral arrangements generally require the counterparty to deliver collateral (typically cash or U.S. Treasury and agency securities) equal to the Company’s net derivative receivable, subject to minimum transfer and credit rating requirements.

The Company’s collateral arrangements are predominately bilateral and, therefore, contain provisions that require collateralization of the Company’s net liability derivative positions. Required collateral coverage is based on net liability thresholds and may be contingent upon the Company’s credit rating from two of the nationally recognized statistical rating organizations. If the Company’s credit rating were to fall below credit ratings thresholds established in the collateral arrangements, the counterparties to the derivatives could request immediate additional collateral coverage up to and including full collateral coverage for derivatives in a net liability position. The aggregate fair value of all derivatives under collateral arrangements that were in a net liability position at September 30, 2021, was $874 million. At September 30, 2021, the Company had $589 million of cash posted as collateral against this net liability position.

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Netting Arrangements for Certain Financial Instruments and Securities Financing Activities

9 Months Ended

Sep. 30, 2021

Text Block [Abstract]

Netting Arrangements for Certain Financial Instruments and Securities Financing Activities

 Note 14 Netting Arrangements for Certain Financial Instruments and Securities Financing Activities

The Company’s derivative portfolio consists of bilateral over-the-counter trades, certain interest rate derivatives and credit contracts required to be centrally cleared through clearinghouses per current regulations, and exchange-traded positions which may include U.S. Treasury and Eurodollar futures or options on U.S. Treasury futures. Of the Company’s $737.2 billion total notional amount of derivative positions at September 30, 2021, $384.1 billion related to bilateral over-the-counter trades, $331.5 billion related to those centrally cleared through clearinghouses and $21.6 billion related to those that were exchange-traded. The Company’s derivative contracts typically include offsetting rights (referred to as netting arrangements), and depending on expected volume, credit risk, and counterparty preference, collateral maintenance may be required. For all derivatives under collateral support arrangements, fair value is determined daily and, depending on the collateral maintenance requirements, the Company and a counterparty may receive or deliver collateral, based upon the net fair value of all derivative positions between the Company and the counterparty. Collateral is typically cash, but securities may be allowed under collateral arrangements with certain counterparties. Receivables and payables related to cash collateral are included in other assets and other liabilities on the Consolidated Balance Sheet, along with the related derivative asset and liability fair values. Any securities pledged to counterparties as collateral remain on the Consolidated Balance Sheet. Securities received from counterparties as collateral are not recognized on the Consolidated Balance Sheet, unless the counterparty defaults. In general, securities used as collateral can be sold, repledged or otherwise used by the party in possession. No restrictions exist on the use of cash collateral by either party. Refer to Note 13 for further discussion of the Company’s derivatives, including collateral arrangements.

As part of the Company’s treasury and broker-dealer operations, the Company executes transactions that are treated as securities sold under agreements to repurchase or securities purchased under agreements to resell, both of which are accounted for as collateralized financings. Securities sold under agreements to repurchase include repurchase agreements and securities loaned transactions. Securities purchased under agreements to resell include reverse repurchase agreements and securities borrowed transactions. For securities sold under agreements to repurchase, the Company records a liability for the cash received, which is included in short-term borrowings on the Consolidated Balance Sheet. For securities purchased under agreements to resell, the Company records a receivable for the cash paid, which is included in other assets on the Consolidated Balance Sheet.

Securities transferred to counterparties under repurchase agreements and securities loaned transactions continue to be recognized on the Consolidated Balance Sheet, are measured at fair value, and are included in investment securities or other assets. Securities received from counterparties under reverse repurchase agreements and securities borrowed transactions are not recognized on the Consolidated Balance Sheet unless the counterparty defaults. The securities transferred under repurchase and reverse repurchase transactions typically are U.S. Treasury and agency securities, residential agency mortgage-backed securities or corporate debt securities. The securities loaned or borrowed typically are corporate debt securities traded by the Company’s broker-dealer subsidiary. In general, the securities transferred can be sold, repledged or otherwise used by the party in possession. No restrictions exist on the use of cash collateral by either party. Repurchase/reverse repurchase and securities loaned/borrowed transactions expose the Company to counterparty risk. The Company manages this risk by performing assessments, independent of business line managers, and establishing concentration limits on each counterparty. Additionally, these transactions include collateral arrangements that require the fair values of the underlying securities to be determined daily, resulting in cash being obtained or refunded to counterparties to maintain specified collateral levels.

The following table summarizes the maturities by category of collateral pledged for repurchase agreements and securities loaned transactions:

(Dollars in Millions)	Overnight and Continuous		Less Than 30 Days		30-89 Days		Greater Than 90 Days		Total
September 30, 2021
Repurchase agreements
U.S. Treasury and agencies	$	568	$	–	$	–	$	–	$	568
Residential agency mortgage-backed securities		838		–		–		–		838
Corporate debt securities		692		–		–		–		692
Total repurchase agreements		2,098		–		–		–		2,098
Securities loaned
Corporate debt securities		166		–		–		–		166
Total securities loaned		166		–		–		–		166
Gross amount of recognized liabilities	$	2,264	$	–	$	–	$	–	$	2,264
December 31, 2020
Repurchase agreements
U.S. Treasury and agencies	$	472	$	–	$	–	$	–	$	472
Residential agency mortgage-backed securities		398		–		–		–		398
Corporate debt securities		560		–		–		–		560
Total repurchase agreements		1,430		–		–		–		1,430
Securities loaned
Corporate debt securities		218		–		–		–		218
Total securities loaned		218		–		–		–		218
Gross amount of recognized liabilities	$	1,648	$	–	$	–	$	–	$	1,648

The Company executes its derivative, repurchase/reverse repurchase and securities loaned/borrowed transactions under the respective industry standard agreements. These agreements include master netting arrangements that allow for multiple contracts executed with the same counterparty to be viewed as a single arrangement. This allows for net settlement of a single amount on a daily basis. In the event of default, the master netting arrangement provides for close-out netting, which allows all of these positions with the defaulting counterparty to be terminated and net settled with a single payment amount.

The Company has elected to offset the assets and liabilities under netting arrangements for the balance sheet presentation of the majority of its derivative counterparties. The netting occurs at the counterparty level, and includes all assets and liabilities related to the derivative contracts, including those associated with cash collateral received or delivered. The Company has not elected to offset the assets and liabilities under netting arrangements for the balance sheet presentation of repurchase/reverse repurchase and securities loaned/borrowed transactions.

The following tables provide information on the Company’s netting adjustments, and items not offset on the Consolidated Balance Sheet but available for offset in the event of default:

(Dollars in Millions)	Gross Recognized Assets		Gross Amounts Offset on the Consolidated Balance Sheet (a)			Net Amounts Presented on the Consolidated Balance Sheet		Gross Amounts Not Offset on the Consolidated Balance Sheet						Net Amount
								Financial Instruments (b)			Collateral Received (c)
September 30, 2021
Derivative assets (d)	$	4,275	$	(1,858	)	$	2,417	$	(104	)	$	(141	)	$	2,172
Reverse repurchase agreements		418		–			418		(317	)		(101	)		–
Securities borrowed		1,978		–			1,978		–			(1,925	)		53
Total	$	6,671	$	(1,858	)	$	4,813	$	(421	)	$	(2,167	)	$	2,225
December 31, 2020
Derivative assets (d)	$	5,744	$	(1,874	)	$	3,870	$	(109	)	$	(287	)	$	3,474
Reverse repurchase agreements		377		–			377		(262	)		(115	)		–
Securities borrowed		1,716		–			1,716		–			(1,670	)		46
Total	$	7,837	$	(1,874	)	$	5,963	$	(371	)	$	(2,072	)	$	3,520

(a) Includes $750 million and $898 million of cash collateral related payables that were netted against derivative assets at September 30, 2021 and December 31, 2020, respectively.

(b) For derivative assets this includes any derivative liability fair values that could be offset in the event of counterparty default; for reverse repurchase agreements this includes any repurchase agreement payables that could be offset in the event of counterparty default; for securities borrowed this includes any securities loaned payables that could be offset in the event of counterparty default.

(c) Includes the fair value of securities received by the Company from the counterparty. These securities are not included on the Consolidated Balance Sheet unless the counterparty defaults.

(d) Excludes $93 million and $257 million at September 30, 2021 and December 31, 2020, respectively, of derivative assets not subject to netting arrangements.

(Dollars in Millions)	Gross Recognized Liabilities		Gross Amounts Offset on the Consolidated Balance Sheet (a)			Net Amounts Presented on the Consolidated Balance Sheet		Gross Amounts Not Offset on the Consolidated Balance Sheet						Net Amount
								Financial Instruments (b)			Collateral Pledged (c)
September 30, 2021
Derivative liabilities (d)	$	2,809	$	(1,697	)	$	1,112	$	(104	)	$	–		$	1,008
Repurchase agreements		2,098		–			2,098		(317	)		(1,779	)		2
Securities loaned		166		–			166		–			(164	)		2
Total	$	5,073	$	(1,697	)	$	3,376	$	(421	)	$	(1,943	)	$	1,012
December 31, 2020
Derivative liabilities (d)	$	3,419	$	(2,312	)	$	1,107	$	(109	)	$	–		$	998
Repurchase agreements		1,430		–			1,430		(262	)		(1,168	)		–
Securities loaned		218		–			218		–			(215	)		3
Total	$	5,067	$	(2,312	)	$	2,755	$	(371	)	$	(1,383	)	$	1,001

(a) Includes $589 million and $1.3 billion of cash collateral related receivables that were netted against derivative liabilities at September 30, 2021 and December 31, 2020, respectively.

(b) For derivative liabilities this includes any derivative asset fair values that could be offset in the event of counterparty default; for repurchase agreements this includes any reverse repurchase agreement receivables that could be offset in the event of counterparty default; for securities loaned this includes any securities borrowed receivables that could be offset in the event of counterparty default.

(c) Includes the fair value of securities pledged by the Company to the counterparty. These securities are included on the Consolidated Balance Sheet unless the Company defaults.

(d) Excludes $173 million and $183 million at September 30, 2021 and December 31, 2020, respectively, of derivative liabilities not subject to netting arrangements.

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Fair Values of Assets and Liabilities

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Fair Values of Assets and Liabilities

 Note 15    Fair Values of Assets and Liabilities

The Company uses fair value measurements for the initial recording of certain assets and liabilities, periodic remeasurement of certain assets and liabilities, and disclosures. Derivatives, trading and available-for-sale investment securities, MSRs and substantially all MLHFS are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as loans held for sale, loans held for investment and certain other assets. These nonrecurring fair value adjustments typically involve application of lower-of-cost-or-fair value accounting or impairment write-downs of individual assets.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value measurement reflects all of the assumptions that market participants would use in pricing the asset or liability, including assumptions about the risk inherent in a particular valuation technique, the effect of a restriction on the sale or use of an asset and the risk of nonperformance.

The Company groups its assets and liabilities measured at fair value into a three-level hierarchy for valuation techniques used to measure financial assets and financial liabilities at fair value. This hierarchy is based on whether the valuation inputs are observable or unobservable. These levels are:

• Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 1 includes U.S. Treasury securities, as well as exchange-traded instruments.

• Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 includes debt securities that are traded less frequently than exchange-traded instruments and which are typically valued using third party pricing services; derivative contracts and other assets and liabilities, including securities, whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data; and MLHFS whose values are determined using quoted prices for similar assets or pricing models with inputs that are observable in the market or can be corroborated by observable market data.

• Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category includes MSRs and certain derivative contracts.

Valuation Methodologies

The valuation methodologies used by the Company to measure financial assets and liabilities at fair value are described below. In addition, the following section includes an indication of the level of the fair value hierarchy in which the

assets or liabilities are classified. Where appropriate, the descriptions include information about the valuation models and key inputs to those models. During the nine months ended September 30, 2021 and 2020, there were no significant changes to the valuation techniques used by the Company to measure fair value.

Available-For-Sale Investment Securities When quoted market prices for identical securities are available in an active market, these prices are used to determine fair value and these securities are classified within Level 1 of the fair value hierarchy. Level 1 investment securities include U.S. Treasury and exchange-traded securities.

For other securities, quoted market prices may not be readily available for the specific securities. When possible, the Company determines fair value based on market observable information, including quoted market prices for similar securities, inactive transaction prices, and broker quotes. These securities are classified within Level 2 of the fair value hierarchy. Level 2 valuations are generally provided by a third party pricing service. Level 2 investment securities are predominantly agency mortgage-backed securities, certain other asset-backed securities, obligations of state and political subdivisions and agency debt securities.

Mortgage Loans Held For Sale MLHFS measured at fair value, for which an active secondary market and readily available market prices exist, are initially valued at the transaction price and are subsequently valued by comparison to instruments with similar collateral and risk profiles. MLHFS are classified within Level 2. Included in mortgage banking revenue was a net loss of $18 million and a net gain of $97 million for the three months ended September 30, 2021 and 2020, respectively, and a net loss of $135 million and a net gain of $271 million for the nine months ended September 30, 2021 and 2020, respectively, from the changes to fair value of these MLHFS under fair value option accounting guidance. Changes in fair value due to instrument specific credit risk were immaterial. Interest income for MLHFS is measured based on contractual interest rates and reported as interest income on the Consolidated Statement of Income. Electing to measure MLHFS at fair value reduces certain timing differences and better matches changes in fair value of these assets with changes in the value of the derivative instruments used to economically hedge them without the burden of complying with the requirements for hedge accounting.

Mortgage Servicing Rights MSRs are valued using a discounted cash flow methodology, and are classified within Level 3. The Company determines fair value of the MSRs by projecting future cash flows for different interest rate scenarios using prepayment rates and other assumptions, and discounts these cash flows using a risk adjusted rate based on option adjusted spread levels. There is minimal observable market activity for MSRs on comparable portfolios and, therefore, the determination of fair value requires significant management judgment. Refer to Note 7 for further information on MSR valuation assumptions.

Derivatives The majority of derivatives held by the Company are executed over-the-counter or centrally cleared through clearinghouses and are valued using market standard cash flow valuation techniques. The models incorporate inputs, depending on the type of derivative, including interest rate curves, foreign exchange rates and volatility. All derivative values incorporate an assessment of the risk of counterparty nonperformance, measured based on the Company’s evaluation of credit risk including external assessments of credit risk. The Company monitors and manages its nonperformance risk by considering its ability to net derivative positions under master netting arrangements, as well as collateral received or provided under collateral arrangements. Accordingly, the Company has elected to measure the fair value of derivatives, at a counterparty level, on a net basis. The majority of the derivatives are classified within Level 2 of the fair value hierarchy, as the significant inputs to the models, including nonperformance risk, are observable. However, certain derivative transactions are with counterparties where risk of nonperformance cannot be observed in the market and, therefore, the credit valuation adjustments result in these derivatives being classified within Level 3 of the fair value hierarchy.

The Company also has other derivative contracts that are created through its operations, including commitments to purchase and originate mortgage loans and swap agreements executed in conjunction with the sale of a portion of its Class B common and preferred shares of Visa Inc. (the “Visa swaps”). The mortgage loan commitments are valued by pricing models that include market observable and unobservable inputs, which result in the commitments being classified within Level 3 of the fair value hierarchy. The unobservable inputs include assumptions about the percentage of commitments that actually become a closed loan and the MSR value that is inherent in the underlying loan value. The Visa swaps require payments by either the Company or the purchaser of the Visa Inc. Class B common and preferred shares when there are changes in the conversion rate of the Visa Inc. Class B common and preferred shares to Visa Inc. Class A common and preferred shares, respectively, as well as quarterly payments to the purchaser based on specified terms of the agreements. Management reviews and updates the Visa swaps fair value in conjunction with its

review of Visa Inc. related litigation contingencies, and the associated escrow funding. The expected litigation resolution impacts the Visa Inc. Class B common share to Visa Inc. Class A common share conversion rate, as well as the ultimate termination date for the Visa swaps. Accordingly, the Visa swaps are classified within Level 3. Refer to Note 16 for further information on the Visa Inc. restructuring and related card association litigation.

Significant Unobservable Inputs of Level 3 Assets and Liabilities

The following section provides information to facilitate an understanding of the uncertainty in the fair value measurements for the Company’s Level 3 assets and liabilities recorded at fair value on the Consolidated Balance Sheet. This section includes a description of the significant inputs used by the Company and a description of any interrelationships between these inputs. The discussion below excludes nonrecurring fair value measurements of collateral value used for impairment measures for loans and OREO. These valuations utilize third party appraisal or broker price opinions, and are classified as Level 3 due to the significant judgment involved.

Mortgage Servicing Rights The significant unobservable inputs used in the fair value measurement of the Company’s MSRs are expected prepayments and the option adjusted spread that is added to the risk-free rate to discount projected cash flows. Significant increases in either of these inputs in isolation would have resulted in a significantly lower fair value measurement. Significant decreases in either of these inputs in isolation would have resulted in a significantly higher fair value measurement. There is no direct interrelationship between prepayments and option adjusted spread. Prepayment rates generally move in the opposite direction of market interest rates. Option adjusted spread is generally impacted by changes in market return requirements.

The following table shows the significant valuation assumption ranges for MSRs at September 30, 2021:

	Minimum			Maximum			Weighted- Average (a)
Expected prepayment		3	%		13	%		10	%
Option adjusted spread		6			11			7

(a) Determined based on the relative fair value of the related mortgage loans serviced.

Derivatives The Company has two distinct Level 3 derivative portfolios: (i) the Company’s commitments to purchase and originate mortgage loans that meet the requirements of a derivative and (ii) the Company’s asset/liability and customer-related derivatives that are Level 3 due to unobservable inputs related to measurement of risk of nonperformance by the counterparty. In addition, the Company’s Visa swaps are classified within Level 3.

The significant unobservable inputs used in the fair value measurement of the Company’s derivative commitments to purchase and originate mortgage loans are the percentage of commitments that actually become a closed loan and the MSR value that is inherent in the underlying loan value. A significant increase in the rate of loans that close would have resulted in a larger derivative asset or liability. A significant increase in the inherent MSR value would have resulted in an increase in the derivative asset or a reduction in the derivative liability. Expected loan close rates and the inherent MSR values are directly impacted by changes in market rates and will generally move in the same direction as interest rates.

The following table shows the significant valuation assumption ranges for the Company’s derivative commitments to purchase and originate mortgage loans at September 30, 2021:

	Minimum			Maximum			Weighted- Average (a)
Expected loan close rate		1	%		100	%		76	%
Inherent MSR value (basis points per loan)		47			187			121

(a) Determined based on the relative fair value of the related mortgage loans.

The significant unobservable input used in the fair value measurement of certain of the Company’s asset/liability and customer-related derivatives is the credit valuation adjustment related to the risk of counterparty nonperformance. A significant increase in the credit valuation adjustment would have resulted in a lower fair value measurement. A significant decrease in the credit valuation adjustment would have resulted in a higher fair value measurement. The credit valuation adjustment is impacted by changes in market rates, volatility, market implied credit spreads, and loss recovery rates, as well as the Company’s assessment of the counterparty’s credit position. At September 30, 2021, the minimum, maximum and weighted-average credit valuation adjustment as a percentage of the net fair value of the counterparty’s derivative contracts prior to adjustment was 0 percent, 97 percent and 2 percent, respectively.

The significant unobservable inputs used in the fair value measurement of the Visa swaps are management’s estimate of the probability of certain litigation scenarios occurring, and the timing of the resolution of the related litigation loss estimates in excess, or shortfall, of the Company’s proportional share of escrow funds. An increase in the loss estimate or a delay in the resolution of the related litigation would have resulted in an increase in the derivative liability. A decrease in the loss estimate or an acceleration of the resolution of the related litigation would have resulted in a decrease in the derivative liability.

The following table summarizes the balances of assets and liabilities measured at fair value on a recurring basis:

(Dollars in Millions)	Level 1		Level 2		Level 3		Netting			Total
September 30, 2021
Available-for-sale securities
U.S. Treasury and agencies	$	14,344	$	4,147	$	–	$	–		$	18,491
Mortgage-backed securities
Residential agency		–		112,796		–		–			112,796
Commercial agency		–		7,686		–		–			7,686
Asset-backed securities		–		61		8		–			69
Obligations of state and political subdivisions		–		10,326		1		–			10,327
Other		–		7		–		–			7
Total available-for-sale		14,344		135,023		9		–			149,376
Mortgage loans held for sale		–		6,176		–		–			6,176
Mortgage servicing rights		–		–		2,910		–			2,910
Derivative assets		6		2,691		1,671		(1,858	)		2,510
Other assets		322		2,118		–		–			2,440
Total	$	14,672	$	146,008	$	4,590	$	(1,858	)	$	163,412
Derivative liabilities	$	–	$	2,429	$	553	$	(1,697	)	$	1,285
Short-term borrowings and other liabilities (a)		205		1,893		–		–			2,098
Total	$	205	$	4,322	$	553	$	(1,697	)	$	3,383
December 31, 2020
Available-for-sale securities
U.S. Treasury and agencies	$	19,251	$	3,140	$	–	$	–		$	22,391
Mortgage-backed securities
Residential agency		–		99,968		–		–			99,968
Commercial agency		–		5,406		–		–			5,406
Asset-backed securities		–		198		7		–			205
Obligations of state and political subdivisions		–		8,860		1		–			8,861
Other		–		9		–		–			9
Total available-for-sale		19,251		117,581		8		–			136,840
Mortgage loans held for sale		–		8,524		–		–			8,524
Mortgage servicing rights		–		–		2,210		–			2,210
Derivative assets		4		3,235		2,762		(1,874	)		4,127
Other assets		302		1,601		–		–			1,903
Total	$	19,557	$	130,941	$	4,980	$	(1,874	)	$	153,604
Derivative liabilities	$	–	$	3,166	$	436	$	(2,312	)	$	1,290
Short-term borrowings and other liabilities (a)		85		1,672		–		–			1,757
Total	$	85	$	4,838	$	436	$	(2,312	)	$	3,047

Note: Excluded from the table above are equity investments without readily determinable fair values. The Company has elected to carry these investments at historical cost, adjusted for impairment and any changes resulting from observable price changes for identical or similar investments of the issuer. The aggregate carrying amount of these equity investments was $73 million and $85 million at September 30, 2021 and December 31, 2020, respectively. The Company has not recorded impairments or adjustments for observable price changes on these equity investments during the first nine months of 2021 and 2020, or on a cumulative basis.

(a) Primarily represents the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.

The following table presents the changes in fair value for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended September 30:

(Dollars in Millions)	Beginning of Period Balance		Net Gains (Losses) Included in Net Income			Net Gains (Losses) Included in Other Comprehensive Income (Loss)		Purchases		Sales			Principal Payments		Issuances			Settlements			End of Period Balance		Net Change in Unrealized Gains (Losses) Relating to Assets and Liabilities Held at End of Period
2021
Available-for-sale securities
Asset-backed securities	$	8	$	–		$	–	$	–	$	–		$	–	$	–		$	–		$	8	$	–
Obligations of state and political subdivisions		1		–			–		–		–			–		–			–			1		–
Total available-for-sale		9		–			–		–		–			–		–			–			9		–
Mortgage servicing rights		2,713		(96	) (a)		–		9		–			–		284	(c)		–			2,910		(96	) (a)
Net derivative assets and liabilities		1,500		(225	) (b)		–		106		(1	)		–		–			(262	)		1,118		(203	) (d)
2020
Available-for-sale securities
Asset-backed securities	$	7	$	–		$	–	$	–	$	–		$	–	$	–		$	–		$	7	$	–
Obligations of state and political subdivisions		1		–			–		–		–			–		–			–			1		–
Total available-for-sale		8		–			–		–		–			–		–			–			8		–
Mortgage servicing rights		1,840		(192	) (a)		–		8		1			–		321	(c)		–			1,978		(192	) (a)
Net derivative assets and liabilities		2,841		211	(e)		–		152		(1	)		–		–			(579	)		2,624		228	(f)

(a) Included in mortgage banking revenue.

(b) Approximately $208 million, $(434) million and $1 million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

(c) Represents MSRs capitalized during the period.

(d) Approximately $57 million, $(261) million and $1 million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

(e) Approximately $508 million, $(228) million and $(69) million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

(f) Approximately $291 million, $6 million and $(69) million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

The following table presents the changes in fair value for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months ended September 30:

(Dollars in Millions)	Beginning of Period Balance		Net Gains (Losses) Included in Net Income			Net Gains (Losses) Included in Other Comprehensive Income (Loss)		Purchases		Sales			Principal Payments			Issuances			Settlements			End of Period Balance		Net Change in Unrealized Gains (Losses) Relating to Assets and Liabilities Held at End of Period
2021
Available-for-sale securities
Asset-backed securities	$	7	$	–		$	1	$	–	$	–		$	–		$	–		$	–		$	8	$	1
Obligations of state and political subdivisions		1		–			–		–		–			–			–			–			1		–
Total available-for-sale		8		–			1		–		–			–			–			–			9		1
Mortgage servicing rights		2,210		(233	) (a)		–		36		1			–			896	(c)		–			2,910		(233	) (a)
Net derivative assets and liabilities		2,326		(604	) (b)		–		166		(2	)		–			–			(768	)		1,118		(761	) (d)
2020
Available-for-sale securities
Asset-backed securities	$	8	$	–		$	–	$	–	$	–		$	(1	)	$	–		$	–		$	7	$	–
Obligations of state and political subdivisions		1		–			–		–		–			–			–			–			1		–
Total available-for-sale		9		–			–		–		–			(1	)		–			–			8		–
Mortgage servicing rights		2,546		(1,299	) (a)		–		16		3			–			712	(c)		–			1,978		(1,299	) (a)
Net derivative assets and liabilities		810		2,685	(e)		–		247		(2	)		–			–			(1,116	)		2,624		1,888	(f)

(a) Included in mortgage banking revenue.

(b) Approximately $544 million, $(1.2) billion and $2 million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

(c) Represents MSRs capitalized during the period.

(d) Approximately $57 million, $(820) million and $2 million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

(e) Approximately $1.5 billion, $1.3 billion and $(70) million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

(f) Approximately $291 million, $1.7 billion and $(70) million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

The Company is also required periodically to measure certain other financial assets at fair value on a nonrecurring basis. These measurements of fair value usually result from the application of lower-of-cost-or-fair value accounting or write-downs of individual assets.

The following table summarizes the balances as of the measurement date of assets measured at fair value on a nonrecurring basis, and still held as of the reporting date:

	September 30, 2021								December 31, 2020
(Dollars in Millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Loans (a)	$	–	$	–	$	65	$	65	$	–	$	–	$	385	$	385
Other assets (b)		–		–		67		67		–		–		30		30

(a) Represents the carrying value of loans for which adjustments were based on the fair value of the collateral, excluding loans fully charged-off.

(b) Primarily represents the fair value of foreclosed properties that were measured at fair value based on an appraisal or broker price opinion of the collateral subsequent to their initial acquisition.

The following table summarizes losses recognized related to nonrecurring fair value measurements of individual assets or portfolios:

	Three Months Ended September 30				Nine Months Ended September 30
(Dollars in Millions)	2021		2020		2021		2020
Loans (a)	$	15	$	184	$	58	$	244
Other assets (b)		1		13		7		19

(a) Represents write-downs of loans which were based on the fair value of the collateral, excluding loans fully charged-off.

(b) Primarily represents related losses of foreclosed properties that were measured at fair value subsequent to their initial acquisition.

Fair Value Option

The following table summarizes the differences between the aggregate fair value carrying amount of MLHFS for which the fair value option has been elected and the aggregate unpaid principal amount that the Company is contractually obligated to receive at maturity:

	September 30, 2021						December 31, 2020
(Dollars in Millions)	Fair Value Carrying Amount		Aggregate Unpaid Principal		Carrying Amount Over (Under) Unpaid Principal		Fair Value Carrying Amount		Aggregate Unpaid Principal		Carrying Amount Over (Under) Unpaid Principal
Total loans	$	6,176	$	6,017	$	159	$	8,524	$	8,136	$	388
Nonaccrual loans		1		1		–		1		1		–
Loans 90 days or more past due		1		1		–		2		2		–

Fair Value of Financial Instruments

The following section summarizes the estimated fair value for financial instruments accounted for at amortized cost as of September 30, 2021 and December 31, 2020. In accordance with disclosure guidance related to fair values of financial instruments, the Company did not include assets and liabilities that are not financial instruments, such as the value of goodwill, long-term relationships with deposit, credit card, merchant processing and trust customers, other purchased intangibles, premises and equipment, deferred taxes and other liabilities. Additionally, in accordance with the disclosure guidance, receivables and payables due in one year or less, insurance contracts, equity investments not accounted for at fair value, and deposits with no defined or contractual maturities are excluded.

The estimated fair values of the Company’s financial instruments are shown in the table below:

	September 30, 2021										December 31, 2020
	Carrying Amount		Fair Value								Carrying Amount		Fair Value
(Dollars in Millions)			Level 1		Level 2		Level 3		Total				Level 1		Level 2		Level 3		Total
Financial Assets
Cash and due from banks	$	63,904	$	63,904	$	–	$	–	$	63,904	$	62,580	$	62,580	$	–	$	–	$	62,580
Federal funds sold and securities purchased under resale agreements		440		–		440		–		440		377		–		377		–		377
Loans held for sale (a)		15		–		–		15		15		237		–		–		237		237
Loans		291,816		–		–		298,764		298,764		290,393		–		–		300,419		300,419
Other (b)		1,472		–		630		842		1,472		1,772		–		731		1,041		1,772
Financial Liabilities
Time deposits		22,879		–		22,946		–		22,946		30,694		–		30,864		–		30,864
Short-term borrowings (c)		13,990		–		13,894		–		13,894		10,009		–		9,956		–		9,956
Long-term debt		35,671		–		36,262		–		36,262		41,297		–		42,485		–		42,485
Other (d)		3,972		–		1,114		2,858		3,972		4,052		–		1,234		2,818		4,052

(a) Excludes mortgages held for sale for which the fair value option under applicable accounting guidance was elected.

(b) Includes investments in Federal Reserve Bank and Federal Home Loan Bank stock and tax-advantaged investments.

(c) Excludes the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.

(d) Includes operating lease liabilities and liabilities related to tax-advantaged investments.

The fair value of unfunded commitments, deferred non-yield related loan fees, standby letters of credit and other guarantees is approximately equal to their carrying value. The carrying value of unfunded commitments, deferred non-yield related loan fees and standby letters of credit was $577 million and $774 million at September 30, 2021 and December 31, 2020, respectively. The carrying value of other guarantees was $278 million and $362 million at September 30, 2021 and December 31, 2020, respectively.

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Guarantees and Contingent Liabilities

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Guarantees and Contingent Liabilities

 Note 16    Guarantees and Contingent Liabilities

Visa Restructuring and Card Association Litigation The Company’s payment services business issues credit and debit cards and acquires credit and debit card transactions through the Visa U.S.A. Inc. card association or its affiliates (collectively “Visa”). In 2007, Visa completed a restructuring and issued shares of Visa Inc. common stock to its financial institution members in contemplation of its initial public offering (“IPO”) completed in the first quarter of 2008 (the “Visa Reorganization”). As a part of the Visa Reorganization, the Company received its proportionate number of shares of Visa Inc. common stock, which were subsequently converted to Class B shares of Visa Inc. (“Class B shares”).

Visa U.S.A. Inc. (“Visa U.S.A.”) and MasterCard International (collectively, the “Card Brands”) are defendants in antitrust lawsuits challenging the practices of the Card Brands (the “Visa Litigation”). Visa U.S.A. member banks have a contingent obligation to indemnify Visa Inc. under the Visa U.S.A. bylaws (which were modified at the time of the restructuring in October 2007) for potential losses arising from the Visa Litigation. The indemnification by the Visa U.S.A. member banks has no specific maximum amount. Using proceeds from its IPO and through reductions to the conversion ratio applicable to the Class B shares held by Visa U.S.A. member banks, Visa Inc. has funded an escrow account for the benefit of member financial institutions to fund their indemnification obligations associated with the Visa Litigation. The receivable related to the escrow account is classified in other liabilities as a direct offset to the related Visa Litigation contingent liability.

In October 2012, Visa signed a settlement agreement to resolve class action claims associated with the multidistrict interchange litigation pending in the United States District Court for the Eastern District of New York (the “Multi-District Litigation”). The U.S. Court of Appeals for the Second Circuit reversed the approval of that settlement and remanded the matter to the district court. Thereafter, the case was split into two putative class actions, one seeking damages (the “Damages Action”) and a separate class action seeking injunctive relief only (the “Injunctive Action”). In September 2018, Visa signed a new settlement agreement, superseding the original settlement agreement, to resolve the Damages Action. The Damages Action settlement was approved by the United States District Court for the Eastern District of New York, but is now on appeal. The Injunctive Action, which generally seeks changes to Visa rules, is still pending.

Other Guarantees and Contingent Liabilities

The following table is a summary of other guarantees and contingent liabilities of the Company at September 30, 2021:

(Dollars in Millions)	Collateral Held		Carrying Amount		Maximum Potential Future Payments
Standby letters of credit	$	–	$	60	$	9,556
Third party borrowing arrangements		–		–		4
Securities lending indemnifications		10,479		–		10,157
Asset sales		–		84		6,793	(a)
Merchant processing		827		172		121,902
Tender option bond program guarantee		1,719		–		1,490
Other		–		22		1,532

(a) The maximum potential future payments do not include loan sales where the Company provides standard representation and warranties to the buyer against losses related to loan underwriting documentation defects that may have existed at the time of sale that generally are identified after the occurrence of a triggering event such as delinquency. For these types of loan sales, the maximum potential future payments is generally the unpaid principal balance of loans sold measured at the end of the current reporting period. Actual losses will be significantly less than the maximum exposure, as only a fraction of loans sold will have a representation and warranty breach, and any losses on repurchase would generally be mitigated by any collateral held against the loans.

Merchant Processing The Company, through its subsidiaries, provides merchant processing services. Under the rules of credit card associations, a merchant processor retains a contingent liability for credit card transactions processed. This contingent liability arises in the event of a billing dispute between the merchant and a cardholder that is ultimately resolved in the cardholder’s favor. In this situation, the transaction is “charged-back” to the merchant and the disputed

amount is credited or otherwise refunded to the cardholder. If the Company is unable to collect this amount from the merchant, it bears the loss for the amount of the refund paid to the cardholder.

The Company currently processes card transactions in the United States, Canada and Europe through wholly-owned subsidiaries. In the event a merchant was unable to fulfill product or services subject to future delivery, such as airline tickets, the Company could become financially liable for refunding the purchase price of such products or services purchased through the credit card associations under the charge-back provisions. Charge-back risk related to these merchants is evaluated in a manner similar to credit risk assessments and, as such, merchant processing contracts contain various provisions to protect the Company in the event of default. At September 30, 2021, the value of airline tickets purchased to be delivered at a future date through card transactions processed by the Company was $7.2 billion. The Company held collateral of $653 million in escrow deposits, letters of credit and indemnities from financial institutions, and liens on various assets. In addition to specific collateral or other credit enhancements, the Company maintains a liability for its implied guarantees associated with future delivery. At September 30, 2021, the liability was $155 million primarily related to these airline processing arrangements.

Asset Sales The Company regularly sells loans to GSEs as part of its mortgage banking activities. The Company provides customary representations and warranties to GSEs in conjunction with these sales. These representations and warranties generally require the Company to repurchase assets if it is subsequently determined that a loan did not meet specified criteria, such as a documentation deficiency or rescission of mortgage insurance. If the Company is unable to cure or refute a repurchase request, the Company is generally obligated to repurchase the loan or otherwise reimburse the GSE for losses. At September 30, 2021, the Company had reserved $18 million for potential losses from representation and warranty obligations, compared with $19 million at December 31, 2020. The Company’s reserve reflects management’s best estimate of losses for representation and warranty obligations. The Company’s repurchase reserve is modeled at the loan level, taking into consideration the individual credit quality and borrower activity that has transpired since origination. The model applies credit quality and economic risk factors to derive a probability of default and potential repurchase that are based on the Company’s historical loss experience, and estimates loss severity based on expected collateral value. The Company also considers qualitative factors that may result in anticipated losses differing from historical loss trends.

As of September 30, 2021 and December 31, 2020, the Company had $14 million and $13 million, respectively, of unresolved representation and warranty claims from GSEs. The Company does not have a significant amount of unresolved claims from investors other than GSEs.

Litigation and Regulatory Matters

The Company is subject to various litigation and regulatory matters that arise in the ordinary course of its business. The Company establishes reserves for such matters when potential losses become probable and can be reasonably estimated. The Company believes the ultimate resolution of existing legal and regulatory matters will not have a material adverse effect on the financial condition, results of operations or cash flows of the Company. However, in light of the uncertainties inherent in these matters, it is possible that the ultimate resolution of one or more of these matters may have a material adverse effect on the Company’s results from operations for a particular period, and future changes in circumstances or additional information could result in additional accruals or resolution in excess of established accruals, which could adversely affect the Company’s results from operations, potentially materially.

Residential Mortgage-Backed Securities Litigation Starting in 2011, the Company and other large financial institutions have been sued in their capacity as trustee for residential mortgage—backed securities trusts. In the lawsuits brought against the Company, the investors allege that the Company’s banking subsidiary, U.S. Bank National Association (“U.S. Bank”), as trustee caused them to incur substantial losses by failing to enforce loan repurchase obligations and failing to abide by appropriate standards of care after events of default allegedly occurred. The plaintiffs in these matters seek monetary damages in unspecified amounts and most also seek equitable relief.

Regulatory Matters The Company is continually subject to examinations, inquiries and investigations in areas of heightened regulatory scrutiny, such as compliance, risk management, third-party risk management and consumer protection. For example, the Consumer Financial Protection Bureau (“CFPB”) is investigating certain of the Company’s consumer sales practices, and the Company has responded and continues to respond to the CFPB. The Company is cooperating fully with all pending examinations, inquiries and investigations, any of which could lead to administrative or legal proceedings or settlements. Remedies in these proceedings or settlements may include fines, penalties,

restitution or alterations in the Company’s business practices (which may increase the Company’s operating expenses and decrease its revenue).

Outlook Due to their complex nature, it can be years before litigation and regulatory matters are resolved. The Company may be unable to develop an estimate or range of loss where matters are in early stages, there are significant factual or legal issues to be resolved, damages are unspecified or uncertain, or there is uncertainty as to a litigation class being certified or the outcome of pending motions, appeals or proceedings. For those litigation and regulatory matters where the Company has information to develop an estimate or range of loss, the Company believes the upper end of the range of reasonably possible losses in aggregate, in excess of any reserves established for matters where a loss is considered probable, will not be material to its financial condition, results of operations or cash flows. The Company’s estimates are subject to significant judgment and uncertainties, and the matters underlying the estimates will change from time to time. Actual results may vary significantly from the current estimates.

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Business Segments

9 Months Ended

Sep. 30, 2021

Text Block [Abstract]

Business Segments

 Note 17    Business Segments

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 September 30 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)	$	717		$	852		$	1,551		$	1,474		$	225		$	301
Noninterest income		253			267			715			848			558			505
Total net revenue		970			1,119			2,266			2,322			783			806
Noninterest expense		418			428			1,450			1,383			507			489
Other intangibles		–			–			3			4			4			3
Total noninterest expense		418			428			1,453			1,387			511			492
Income (loss) before provision and income taxes		552			691			813			935			272			314
Provision for credit losses		15			95			(25	)		69			11			11
Income (loss) before income taxes		537			596			838			866			261			303
Income taxes and taxable-equivalent adjustment		134			149			210			217			65			76
Net income (loss)		403			447			628			649			196			227
Net (income) loss attributable to noncontrolling interests		–			–			–			–			–			–
Net income (loss) attributable to U.S. Bancorp	$	403		$	447		$	628		$	649		$	196		$	227
Average Balance Sheet
Loans	$	102,431		$	115,547		$	140,833		$	145,229		$	18,454		$	15,616
Other earning assets		4,722			4,110			7,645			8,195			225			288
Goodwill		1,650			1,647			3,506			3,475			1,618			1,618
Other intangible assets		5			6			2,754			1,942			80			37
Assets		114,629			128,369			160,882			164,246			21,566			18,708
Noninterest-bearing deposits		62,642			48,058			34,416			34,288			24,453			17,719
Interest-bearing deposits		68,917			87,558			160,271			133,095			71,841			73,857
Total deposits		131,559			135,616			194,687			167,383			96,294			91,576
Total U.S. Bancorp shareholders’ equity		13,772			15,051			12,277			13,562			3,172			2,968
	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)	$	616		$	643		$	88		$	(18	)	$	3,197		$	3,252
Noninterest income		946	(a)		867	(a)		221			225			2,693	(b)		2,712	(b)
Total net revenue		1,562			1,510			309			207			5,890	(c)		5,964	(c)
Noninterest expense		817			797			196			230			3,388			3,327
Other intangibles		34			37			–			–			41			44
Total noninterest expense		851			834			196			230			3,429			3,371
Income (loss) before provision and income taxes		711			676			113			(23	)		2,461			2,593
Provision for credit losses		166			246			(330	)		214			(163	)		635
Income (loss) before income taxes		545			430			443			(237	)		2,624			1,958
Income taxes and taxable-equivalent adjustment		136			108			45			(178	)		590			372
Net income (loss)		409			322			398			(59	)		2,034			1,586
Net (income) loss attributable to noncontrolling interests		–			–			(6	)		(6	)		(6	)		(6	)
Net income (loss) attributable to U.S. Bancorp	$	409		$	322		$	392		$	(65	)	$	2,028		$	1,580
Average Balance Sheet
Loans	$	31,378		$	31,168		$	3,643		$	3,458		$	296,739		$	311,018
Other earning assets		5			5			193,989			162,488			206,586			175,086
Goodwill		3,168			3,123			–			–			9,942			9,863
Other intangible assets		496			602			–			–			3,335			2,587
Assets		37,173			36,191			219,196			189,388			553,446			536,902
Noninterest-bearing deposits		4,913			6,886			2,594			2,424			129,018			109,375
Interest-bearing deposits		150			124			1,290			1,514			302,469			296,148
Total deposits		5,063			7,010			3,884			3,938			431,487			405,523
Total U.S. Bancorp shareholders’ equity		7,561			7,716			17,491			13,119			54,273			52,416

(a) Presented net of related rewards and rebate costs and certain partner payments of $652 million and $525 million for the three months ended September 30, 2021 and 2020, respectively.

(b) Includes revenue generated from certain contracts with customers of $2.0 billion and $1.8 billion for the three months ended September 30, 2021 and 2020, respectively.

(c) The Company, as a lessor, originates retail and commercial leases either directly to the consumer or indirectly through dealer networks. Under these arrangments, the Company recorded $220 million and $246 million of revenue for the three months ended September 30, 2021 and 2020, respectively, primarily consisting of interest income on sales-type and direct financing leases.

Business segment results for the nine months ended September 30 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)	$	2,172		$	2,623		$	4,603		$	4,239		$	721		$	964
Noninterest income		786			899			1,918			2,433			1,638			1,507
Total net revenue		2,958			3,522			6,521			6,672			2,359			2,471
Noninterest expense		1,257			1,310			4,210			4,061			1,499			1,445
Other intangibles		–			–			9			12			10			9
Total noninterest expense		1,257			1,310			4,219			4,073			1,509			1,454
Income (loss) before provision and income taxes		1,701			2,212			2,302			2,599			850			1,017
Provision for credit losses		(20	)		572			(143	)		269			26			34
Income (loss) before income taxes		1,721			1,640			2,445			2,330			824			983
Income taxes and taxable-equivalent adjustment		430			410			612			583			206			246
Net income (loss)		1,291			1,230			1,833			1,747			618			737
Net (income) loss attributable to noncontrolling interests		–			–			–			–			–			–
Net income (loss) attributable to U.S. Bancorp	$	1,291		$	1,230		$	1,833		$	1,747		$	618		$	737
Average Balance Sheet
Loans	$	102,117		$	118,686		$	141,220		$	139,981		$	17,584		$	15,151
Other earning assets		4,485			4,170			8,606			6,578			247			285
Goodwill		1,648			1,647			3,485			3,508			1,618			1,617
Other intangible assets		5			6			2,692			2,095			69			40
Assets		114,182			131,106			162,316			157,177			20,676			18,324
Noninterest-bearing deposits		59,841			41,091			33,734			29,397			23,024			16,285
Interest-bearing deposits		69,999			90,581			156,821			126,934			76,098			76,736
Total deposits		129,840			131,672			190,555			156,331			99,122			93,021
Total U.S. Bancorp shareholders’ equity		13,995			15,201			12,378			12,797			3,099			2,924
	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)	$	1,841		$	1,910		$	113		$	(13	)	$	9,450		$	9,723
Noninterest income		2,644	(a)		2,319	(a)		707			693			7,693	(b)		7,851	(b)
Total net revenue		4,485			4,229			820			680			17,143	(c)		17,574	(c)
Noninterest expense		2,381			2,296			729			764			10,076			9,876
Other intangibles		100			108			–			–			119			129
Total noninterest expense		2,481			2,404			729			764			10,195			10,005
Income (loss) before provision and income taxes		2,004			1,825			91			(84	)		6,948			7,569
Provision for credit losses		216			477			(1,239	)		2,013			(1,160	)		3,365
Income (loss) before income taxes		1,788			1,348			1,330			(2,097	)		8,108			4,204
Income taxes and taxable-equivalent adjustment		447			338			106			(833	)		1,801			744
Net income (loss)		1,341			1,010			1,224			(1,264	)		6,307			3,460
Net (income) loss attributable to noncontrolling interests		–			–			(17	)		(20	)		(17	)		(20	)
Net income (loss) attributable to U.S. Bancorp	$	1,341		$	1,010		$	1,207		$	(1,284	)	$	6,290		$	3,440
Average Balance Sheet
Loans	$	30,353		$	31,725		$	3,740		$	3,392		$	295,014		$	308,935
Other earning assets		5			5			192,259			156,045			205,602			167,083
Goodwill		3,174			3,027			–			–			9,925			9,799
Other intangible assets		519			584			–			–			3,285			2,725
Assets		35,972			36,497			218,053			182,276			551,199			525,380
Noninterest-bearing deposits		5,068			3,852			2,595			2,310			124,262			92,935
Interest-bearing deposits		141			119			1,718			3,293			304,777			297,663
Total deposits		5,209			3,971			4,313			5,603			429,039			390,598
Total U.S. Bancorp shareholders’ equity		7,544			7,269			16,311			13,745			53,327			51,936

(a) Presented net of related rewards and rebate costs and certain partner payments of $1.8 billion and $1.5 billion for the nine months ended September 30, 2021 and 2020, respectively.

(b) Includes revenue generated from certain contracts with customers of $5.6 billion and $5.1 billion for the nine months ended September 30, 2021 and 2020, respectively.

(c) The Company, as a lessor, originates retail and commercial leases either directly to the consumer or indirectly through dealer networks. Under these arrangments, the Company recorded $686 million and $714 million of revenue for the nine months ended September 30, 2021 and 2020, respectively, primarily consisting of interest income on sales-type and direct financing leases.

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Subsequent Events

9 Months Ended

Sep. 30, 2021

Subsequent Events [Abstract]

Subsequent Events

 Note 18    Subsequent Events

The Company has evaluated the impact of events that have occurred subsequent to September 30, 2021 through the date the consolidated financial statements were filed with the United States Securities and Exchange Commission. Based on this evaluation, the Company has determined none of these events were required to be recognized or disclosed in the consolidated financial statements and related notes.

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Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and notes necessary for a complete presentation of financial position, results of operations and cash flow activity required in accordance with accounting principles generally accepted in the United States. In the opinion of management of U.S. Bancorp (the “Company”), all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of results for the interim periods have been made. These financial statements and notes should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Certain amounts in prior periods have been reclassified to conform to the current presentation.

Accounting Changes

Reference Interest Rate Transition In March 2020, the FASB issued accounting guidance, providing temporary optional expedients and exceptions to the guidance in United States generally accepted accounting principles on contract modifications and hedge accounting, to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. Under the guidance, a company can elect not to apply certain modification accounting requirements to contracts affected by reference rate transition, if certain criteria are met. A company that makes this election would not be required to remeasure the contracts at the modification date or reassess a previous accounting determination. This guidance also permits a company to elect various optional expedients that would allow it to continue applying hedge accounting for hedging relationships affected by reference rate transition, if certain criteria are met. The guidance is effective upon issuance and generally can be applied through December 31, 2022. The Company is in the process of evaluating and applying, as applicable, the optional expedients and exceptions in accounting for eligible contract modifications, eligible existing hedging relationships and new hedging relationships available through December 31, 2022. The adoption of this guidance has not had, and is expected to continue to not have, a material impact on the Company’s financial statements.

Loans and Allowance for Credit Losses

Allowance for Credit Losses Beginning January 1, 2020, the allowance for credit losses is established for current expected credit losses on the Company’s loan and lease portfolio, including unfunded credit commitments. The allowance considers expected losses for the remaining lives of the applicable assets, inclusive of expected recoveries. The allowance for credit losses is increased through provisions charged to earnings and reduced by net charge-offs. Management evaluates the appropriateness of the allowance for credit losses on a quarterly basis. Multiple economic scenarios are considered over a three-year reasonable and supportable forecast period, which includes increasing consideration of historical loss experience over years two and three. These economic scenarios are constructed with interrelated projections of multiple economic variables, and loss estimates are produced that consider the historical correlation of those economic variables with credit losses. After the forecast period, the Company fully reverts to long-term historical loss experience, adjusted for prepayments and characteristics of the current loan and lease portfolio, to estimate losses over the remaining life of the portfolio. The economic scenarios are updated at least quarterly and are designed to provide a range of reasonable estimates, from better to worse than current expectations. Scenarios are weighted based on the Company’s expectation of economic conditions for the foreseeable future and reflect significant judgment and consideration of uncertainties that exist. Final loss estimates also consider factors affecting credit losses not reflected in the scenarios, due to the unique aspects of current conditions and expectations. These factors may include, but are not limited to, loan servicing practices, regulatory guidance, and/or fiscal and monetary policy actions.

The allowance recorded for credit losses utilizes forward-looking expected loss models to consider a variety of factors affecting lifetime credit losses. These factors include, but are not limited to, macroeconomic variables such as unemployment rate, real estate prices, gross domestic product levels and corporate bonds spreads, as well as loan and borrower characteristics, such as internal risk ratings on commercial loans and consumer credit scores, delinquency

status, collateral type and available valuation information, consideration of end-of-term losses on lease residuals, and the remaining term of the loan, adjusted for expected prepayments. For each loan portfolio, model estimates are adjusted as necessary to consider any relevant changes in portfolio composition, lending policies, underwriting standards, risk management practices, economic conditions or other factors that would affect the accuracy of the model. Expected credit loss estimates also include consideration of expected cash recoveries on loans previously charged-off or expected recoveries on collateral dependent loans where recovery is expected through sale of the collateral. Where loans do not exhibit similar risk characteristics, an individual analysis is performed to consider expected credit losses. The allowance recorded for individually evaluated loans greater than $5 million in the commercial lending segment is based on an analysis utilizing expected cash flows discounted using the original effective interest rate, the observable market price of the loan, or the fair value of the collateral, less selling costs, for collateral-dependent loans as appropriate.

The allowance recorded for Troubled Debt Restructuring (“TDR”) loans in the consumer lending segment is determined on a homogenous pool basis utilizing expected cash flows discounted using the original effective interest rate of the pool. TDRs generally do not include loan modifications granted to customers resulting directly from the economic effects of the COVID-19 pandemic, who were otherwise in current payment status. The expected cash flows on TDR loans consider subsequent payment defaults since modification, the borrower’s ability to pay under the restructured terms, and the timing and amount of payments. The allowance for collateral-dependent loans in the consumer lending segment is determined based on the fair value of the collateral less costs to sell. With respect to the commercial lending segment, TDRs may be collectively evaluated for impairment where observed performance history, including defaults, is a primary driver of the loss allocation. For commercial TDRs individually evaluated for impairment, attributes of the borrower are the primary factors in determining the allowance for credit losses. However, historical loss experience is also incorporated into the allowance methodology applied to this category of loans.

Beginning January 1, 2020, when a loan portfolio is purchased, the acquired loans are divided into those considered purchased with more than insignificant credit deterioration (“PCD”) and those not considered purchased with more than insignificant credit deterioration. An allowance is established for each population and considers product mix, risk characteristics of the portfolio, bankruptcy experience, delinquency status and refreshed LTV ratios when possible. The allowance established for purchased loans not considered PCD is recognized through provision expense upon acquisition, whereas the allowance established for loans considered PCD at acquisition is offset by an increase in the basis of the acquired loans. Any subsequent increases and decreases in the allowance related to purchased loans, regardless of PCD status, are recognized through provision expense, with charge-offs charged to the allowance. The Company did not have a material amount of PCD loans included in its loan portfolio at September 30, 2021.

The Company’s methodology for determining the appropriate allowance for credit losses also considers the imprecision inherent in the methodologies used and allocated to the various loan portfolios. As a result, amounts determined under the methodologies described above, are adjusted by management to consider the potential impact of other qualitative factors not captured in the quantitative model adjustments which include, but are not limited to the following: model imprecision, imprecision in economic scenario assumptions, and emerging risks related to either changes in the environment that are affecting specific portfolios, or changes in portfolio concentrations over time that may affect model performance. The consideration of these items results in adjustments to allowance amounts included in the Company’s allowance for credit losses for each loan portfolio.

The Company also assesses the credit risk associated with off-balance sheet loan commitments, letters of credit, investment securities and derivatives. Credit risk associated with derivatives is reflected in the fair values recorded for those positions. The liability for off-balance sheet credit exposure related to loan commitments and other credit guarantees is included in other liabilities. Because business processes and credit risks associated with unfunded credit commitments are essentially the same as for loans, the Company utilizes similar processes to estimate its liability for unfunded credit commitments.

Prior to January 1, 2020, the allowance for credit losses was established based on an incurred loss model. The allowance recorded for loans in the commercial lending segment was based on the migration analysis of commercial loans and actual loss experience. The allowance recorded for loans in the consumer lending segment was determined on a homogenous pool basis and primarily included consideration of delinquency status and historical losses. In addition to the amounts determined under the methodologies described above, management also considered the potential impact of qualitative factors.

Credit Quality The credit quality of the Company’s loan portfolios is assessed as a function of net credit losses, levels of nonperforming assets and delinquencies, and credit quality ratings as defined by the Company.

For all loan portfolio classes, loans are considered past due based on the number of days delinquent except for monthly amortizing loans which are classified delinquent based upon the number of contractually required payments not made (for example, two missed payments is considered 30 days delinquent). When a loan is placed on nonaccrual status, unpaid accrued interest is reversed, reducing interest income in the current period.

Commercial lending segment loans are generally placed on nonaccrual status when the collection of principal and interest has become 90 days past due or is otherwise considered doubtful. Commercial lending segment loans are generally fully or partially charged down to the fair value of the collateral securing the loan, less costs to sell, when the loan is placed on nonaccrual.

Consumer lending segment loans are generally charged-off at a specific number of days or payments past due. Residential mortgages and other retail loans secured by 1-4 family properties are generally charged down to the fair

value of the collateral securing the loan, less costs to sell, at 180 days past due. Residential mortgage loans and lines in a first lien position are placed on nonaccrual status in instances where a partial charge-off occurs unless the loan is well secured and in the process of collection. Residential mortgage loans and lines in a junior lien position secured by 1-4 family properties are placed on nonaccrual status at 120 days past due or when they are behind a first lien that has become 180 days or greater past due or placed on nonaccrual status. Any secured consumer lending segment loan whose borrower has had debt discharged through bankruptcy, for which the loan amount exceeds the fair value of the collateral, is charged down to the fair value of the related collateral and the remaining balance is placed on nonaccrual status. Credit card loans continue to accrue interest until the account is charged-off. Credit cards are charged-off at 180 days past due. Other retail loans not secured by 1-4 family properties are charged-off at 120 days past due; and revolving consumer lines are charged-off at 180 days past due. Similar to credit cards, other retail loans are generally not placed on nonaccrual status because of the relative short period of time to charge-off. Certain retail customers having financial difficulties may have the terms of their credit card and other loan agreements modified to require only principal payments and, as such, are reported as nonaccrual.

For all loan classes, interest payments received on nonaccrual loans are generally recorded as a reduction to a loan’s carrying amount while a loan is on nonaccrual and are recognized as interest income upon payoff of the loan. However, interest income may be recognized for interest payments if the remaining carrying amount of the loan is believed to be collectible. In certain circumstances, loans in any class may be restored to accrual status, such as when a loan has demonstrated sustained repayment performance or no amounts are past due and prospects for future payment are no longer in doubt; or when the loan becomes well secured and is in the process of collection. Loans where there has been a partial charge-off may be returned to accrual status if all principal and interest (including amounts previously charged-off) is expected to be collected and the loan is current.

The Company classifies its loan portfolio classes using internal credit quality ratings on a quarterly basis. These ratings include pass, special mention and classified, and are an important part of the Company’s overall credit risk management process and evaluation of the allowance for credit losses. Loans with a pass rating represent those loans not classified on the Company’s rating scale for problem credits, as minimal credit risk has been identified. Special mention loans are those loans that have a potential weakness deserving management’s close attention. Classified loans are those loans where a well-defined weakness has been identified that may put full collection of contractual cash flows at risk. It is possible that others, given the same information, may reach different reasonable conclusions regarding the credit quality rating classification of specific loans.

Troubled Debt Restructurings In certain circumstances, the Company may modify the terms of a loan to maximize the collection of amounts due when a borrower is experiencing financial difficulties or is expected to experience difficulties

in the near-term. Concessionary modifications are classified as TDRs unless the modification results in only an insignificant delay in payments to be received. The Company recognizes interest on TDRs if the borrower complies with the revised terms and conditions as agreed upon with the Company and has demonstrated repayment performance at a level commensurate with the modified terms over several payment cycles, which is generally six months or greater. To the extent a previous restructuring was insignificant, the Company considers the cumulative effect of past restructurings related to the receivable when determining whether a current restructuring is a TDR.Residential mortgages, home equity and second mortgages, and loans purchased from GNMA mortgage pools in the table above include trial period arrangements offered to customers during the periods presented. The post-modification balances for these loans reflect the current outstanding balance until a permanent modification is made. In addition, the post-modification balances typically include capitalization of unpaid accrued interest and/or fees under the various modification programs.

The Company has implemented certain restructuring programs that may result in TDRs. However, many of the Company’s TDRs are also determined on a case-by-case basis in connection with ongoing loan collection processes.

For the commercial lending segment, modifications generally result in the Company working with borrowers on a case-by-case basis. Commercial and commercial real estate modifications generally include extensions of the maturity date and may be accompanied by an increase or decrease to the interest rate, which may not be deemed a market interest rate. In addition, the Company may work with the borrower in identifying other changes that mitigate loss to the Company, which may include additional collateral or guarantees to support the loan. To a lesser extent, the Company may waive contractual principal. The Company classifies all of the above concessions as TDRs to the extent the Company determines that the borrower is experiencing financial difficulty.

Modifications for the consumer lending segment are generally part of programs the Company has initiated. The Company modifies residential mortgage loans under Federal Housing Administration, United States Department of Veterans Affairs, or its own internal programs. Under these programs, the Company offers qualifying homeowners the opportunity to permanently modify their loan and achieve more affordable monthly payments by providing loan concessions. These concessions may include adjustments to interest rates, conversion of adjustable rates to fixed rates, extension of maturity dates or deferrals of payments, capitalization of accrued interest and/or outstanding advances, or in limited situations, partial forgiveness of loan principal. In most instances, participation in residential mortgage loan restructuring programs requires the customer to complete a short-term trial period. A permanent loan modification is

contingent on the customer successfully completing the trial period arrangement, and the loan documents are not modified until that time. The Company reports loans in a trial period arrangement as TDRs and continues to report them as TDRs after the trial period.

Credit card and other retail loan TDRs are generally part of distinct restructuring programs providing customers experiencing financial difficulty with modifications whereby balances may be amortized up to 60 months, and generally include waiver of fees and reduced interest rates.

In addition, the Company considers secured loans to consumer borrowers that have debt discharged through bankruptcy where the borrower has not reaffirmed the debt to be TDRs.

Loan modifications or concessions granted to borrowers resulting directly from the effects of the COVID-19 pandemic, who were otherwise in current payment status, are generally not considered to be TDRs.

Accounting for Transfers and Servicing of Financial Assets

In accordance with the accounting guidance for asset transfers, the Company considers any ongoing involvement with transferred assets in determining whether the assets can be derecognized from the balance sheet.For loans sold under participation agreements, the Company also considers whether the terms of the loan participation agreement meet the accounting definition of a participating interest. With the exception of servicing and certain performance-based guarantees, the Company’s continuing involvement with financial assets sold is minimal and generally limited to market customary representation and warranty clauses. Any gain or loss on sale depends on theprevious carrying amount of the transferred financial assets, the consideration received, and any liabilities incurred in exchange for the transferred assets. Upon transfer, any servicing assets and other interests that continue to be held by the Company are initially recognized at fair value.

Variable Interest Entities

The Company is not required to consolidate VIEs in which it has concluded it does not have a controlling financial interest, and thus is not the primary beneficiary. In such cases, the Company does not have both the power to direct the entities’ most significant activities and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs.

The Company’s investments in these unconsolidated VIEs are carried in other assets on the Consolidated Balance Sheet. The Company’s unfunded capital and other commitments related to these unconsolidated VIEs are generally carried in other liabilities on the Consolidated Balance Sheet. The Company’s maximum exposure to loss from these unconsolidated VIEs include the investment recorded on the Company’s Consolidated Balance Sheet, net of unfunded capital commitments, and previously recorded tax credits which remain subject to recapture by taxing authorities based on compliance features required to be met at the project level. While the Company believes potential losses from these investments are remote, the maximum exposure was determined by assuming a scenario where the community-based business and housing projects completely fail and do not meet certain government compliance requirements resulting in recapture of the related tax credits.

The Company is required to consolidate VIEs in which it has concluded it has a controlling financial interest. The Company sponsors entities to which it transfers its interests in tax-advantaged investments to third parties.The majority of the assets of these consolidated VIEs are reported in other assets, and the liabilities are reported in long-term debt and other liabilities. The assets of a particular VIE are the primary source of funds to settle its obligations. The creditors of the VIEs do not have recourse to the general credit of the Company. The Company’s exposure to the consolidated VIEs is generally limited to the carrying value of its variable interests plus any related tax credits previously recognized or transferred to others with a guarantee.

Netting Arrangements for Certain Financial Instruments

The Company’s derivative contracts typically include offsetting rights (referred to as netting arrangements), and depending on expected volume, credit risk, and counterparty preference, collateral maintenance may be required. For all derivatives under collateral support arrangements, fair value is determined daily and, depending on the collateral maintenance requirements, the Company and a counterparty may receive or deliver collateral, based upon the net fair value of all derivative positions between the Company and the counterparty. Collateral is typically cash, but securities may be allowed under collateral arrangements with certain counterparties. Receivables and payables related to cash collateral are included in other assets and other liabilities on the Consolidated Balance Sheet, along with the related derivative asset and liability fair values. Any securities pledged to counterparties as collateral remain on the Consolidated Balance Sheet. Securities received from counterparties as collateral are not recognized on the Consolidated Balance Sheet, unless the counterparty defaults. In general, securities used as collateral can be sold, repledged or otherwise used by the party in possession. No restrictions exist on the use of cash collateral by either party. Refer to Note 13 for further discussion of the Company’s derivatives, including collateral arrangements.

As part of the Company’s treasury and broker-dealer operations, the Company executes transactions that are treated as securities sold under agreements to repurchase or securities purchased under agreements to resell, both of which are accounted for as collateralized financings. Securities sold under agreements to repurchase include repurchase agreements and securities loaned transactions. Securities purchased under agreements to resell include reverse repurchase agreements and securities borrowed transactions. For securities sold under agreements to repurchase, the Company records a liability for the cash received, which is included in short-term borrowings on the Consolidated Balance Sheet. For securities purchased under agreements to resell, the Company records a receivable for the cash paid, which is included in other assets on the Consolidated Balance Sheet.

Securities transferred to counterparties under repurchase agreements and securities loaned transactions continue to be recognized on the Consolidated Balance Sheet, are measured at fair value, and are included in investment securities or other assets. Securities received from counterparties under reverse repurchase agreements and securities borrowed transactions are not recognized on the Consolidated Balance Sheet unless the counterparty defaults. The securities transferred under repurchase and reverse repurchase transactions typically are U.S. Treasury and agency securities, residential agency mortgage-backed securities or corporate debt securities. The securities loaned or borrowed typically are corporate debt securities traded by the Company’s broker-dealer subsidiary. In general, the securities transferred can be sold, repledged or otherwise used by the party in possession. No restrictions exist on the use of cash collateral by either party. Repurchase/reverse repurchase and securities loaned/borrowed transactions expose the Company to counterparty risk. The Company manages this risk by performing assessments, independent of business line managers, and establishing concentration limits on each counterparty. Additionally, these transactions include collateral arrangements that require the fair values of the underlying securities to be determined daily, resulting in cash being obtained or refunded to counterparties to maintain specified collateral levels.

The Company executes its derivative, repurchase/reverse repurchase and securities loaned/borrowed transactions under the respective industry standard agreements. These agreements include master netting arrangements that allow for multiple contracts executed with the same counterparty to be viewed as a single arrangement. This allows for net settlement of a single amount on a daily basis. In the event of default, the master netting arrangement provides for close-out netting, which allows all of these positions with the defaulting counterparty to be terminated and net settled with a single payment amount.

The Company has elected to offset the assets and liabilities under netting arrangements for the balance sheet presentation of the majority of its derivative counterparties. The netting occurs at the counterparty level, and includes all assets and liabilities related to the derivative contracts, including those associated with cash collateral received or delivered. The Company has not elected to offset the assets and liabilities under netting arrangements for the balance sheet presentation of repurchase/reverse repurchase and securities loaned/borrowed transactions.

Fair Values of Assets and Liabilities

The Company uses fair value measurements for the initial recording of certain assets and liabilities, periodic remeasurement of certain assets and liabilities, and disclosures. Derivatives, trading and available-for-sale investment securities, MSRs and substantially all MLHFS are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as loans held for sale, loans held for investment and certain other assets. These nonrecurring fair value adjustments typically involve application of lower-of-cost-or-fair value accounting or impairment write-downs of individual assets.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value measurement reflects all of the assumptions that market participants would use in pricing the asset or liability, including assumptions about the risk inherent in a particular valuation technique, the effect of a restriction on the sale or use of an asset and the risk of nonperformance.

The Company groups its assets and liabilities measured at fair value into a three-level hierarchy for valuation techniques used to measure financial assets and financial liabilities at fair value. This hierarchy is based on whether the valuation inputs are observable or unobservable. These levels are:

• Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 1 includes U.S. Treasury securities, as well as exchange-traded instruments.

• Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 includes debt securities that are traded less frequently than exchange-traded instruments and which are typically valued using third party pricing services; derivative contracts and other assets and liabilities, including securities, whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data; and MLHFS whose values are determined using quoted prices for similar assets or pricing models with inputs that are observable in the market or can be corroborated by observable market data.

• Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category includes MSRs and certain derivative contracts.

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Investment Securities (Tables)

9 Months Ended

Sep. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Investment Securities Available-for-Sale

The amortized cost, gross unrealized holding gains and losses, and fair value of available-for-sale investment securities were as follows:

	September 30, 2021									December 31, 2020
(Dollars in Millions)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
U.S. Treasury and agencies	$	18,460	$	230	$	(199	)	$	18,491	$	21,954	$	462	$	(25	)	$	22,391
Mortgage-backed securities
Residential agency		113,137		996		(1,337	)		112,796		98,031		1,950		(13	)		99,968
Commercial agency		7,750		77		(141	)		7,686		5,251		170		(15	)		5,406
Asset-backed securities		64		5		–			69		200		5		–			205
Obligations of state and political subdivisions		9,820		560		(53	)		10,327		8,166		695		–			8,861
Other		7		–		–			7		9		–		–			9
Total available-for-sale	$	149,238	$	1,868	$	(1,730	)	$	149,376	$	133,611	$	3,282	$	(53	)	$	136,840

Amount of Interest Income from Taxable and Non-Taxable Investment Securities

The following table provides information about the amount of interest income from taxable and non-taxable investment securities:

	Three Months Ended September 30				Nine Months Ended September 30
(Dollars in Millions)	2021		2020		2021		2020
Taxable	$	539	$	528	$	1,548	$	1,741
Non-taxable		67		58		193		167
Total interest income from investment securities	$	606	$	586	$	1,741	$	1,908

Amount of Gross Gains and Losses Realized through Sales of Available-for-Sale Investment Securities

The following table provides information about the amount of gross gains and losses realized through the sales of available-for-sale investment securities:

	Three Months Ended September 30					Nine Months Ended September 30
(Dollars in Millions)	2021			2020		2021			2020
Realized gains	$	39		$	12	$	107		$	166
Realized losses		(19	)		–		(19	)		(23	)
Net realized gains	$	20		$	12	$	88		$	143
Income tax on net realized gains	$	5		$	3	$	22		$	36

Gross Unrealized Losses and Fair Value of Company's Investment Securities

	Less Than 12 Months					12 Months or Greater					Total
(Dollars in Millions)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury and agencies	$	6,023	$	(163	)	$	980	$	(36	)	$	7,003	$	(199	)
Residential agency mortgage-backed securities		66,781		(1,328	)		375		(9	)		67,156		(1,337	)
Commercial agency mortgage-backed securities		3,947		(88	)		1,122		(53	)		5,069		(141	)
Asset-backed securities		–		–			2		–			2		–
Obligations of state and political subdivisions		2,145		(53	)		–		–			2,145		(53	)
Other		4		–			–		–			4		–
Total investment securities	$	78,900	$	(1,632	)	$	2,479	$	(98	)	$	81,379	$	(1,730	)

Investment Securities

The following table provides information about the amortized cost, fair value and yield by maturity date of the available-for-sale investment securities outstanding at September 30, 2021:

(Dollars in Millions)	Amortized Cost		Fair Value		Weighted- Average Maturity in Years		Weighted- Average Yield (e)
U.S. Treasury and Agencies
Maturing in one year or less	$	2,873	$	2,894		.5		1.87	%
Maturing after one year through five years		6,835		6,977		2.4		1.61
Maturing after five years through ten years		7,146		7,041		7.9		1.33
Maturing after ten years		1,606		1,579		12.6		1.91
Total	$	18,460	$	18,491		5.1		1.57	%
Mortgage-Backed Securities (a)
Maturing in one year or less	$	140	$	138		.5		1.70	%
Maturing after one year through five years		54,361		55,259		3.4		1.57
Maturing after five years through ten years		66,370		65,068		6.5		1.53
Maturing after ten years		16		17		12.2		1.27
Total	$	120,887	$	120,482		5.1		1.55	%
Asset-Backed Securities (a)
Maturing in one year or less	$	–	$	–		.6		2.69	%
Maturing after one year through five years		63		66		3.8		1.50
Maturing after five years through ten years		1		2		6.2		2.58
Maturing after ten years		–		1		12.9		2.41
Total	$	64	$	69		3.8		1.51	%
Obligations of State and Political Subdivisions (b) (c)
Maturing in one year or less	$	349	$	355		.6		4.28	%
Maturing after one year through five years		2,492		2,663		4.1		4.24
Maturing after five years through ten years		5,595		5,964		6.9		3.73
Maturing after ten years		1,384		1,345		17.4		2.50
Total	$	9,820	$	10,327		7.4		3.71	%
Other
Maturing in one year or less	$	–	$	–		–		–	%
Maturing after one year through five years		7		7		3.7		2.07
Maturing after five years through ten years		–		–		–		–
Maturing after ten years		–		–		–		–
Total	$	7	$	7		3.7		2.07	%
Total investment securities (d)	$	149,238	$	149,376		5.3		1.69	%

(a) Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities that take into account anticipated future prepayments.

(b) Information related to obligations of state and political subdivisions is presented based upon yield to first optional call date if the security is purchased at a premium, and yield to maturity if the security is purchased at par or a discount.

(c) Maturity calculations for obligations of state and political subdivisions are based on the first optional call date for securities with a fair value above par and the contractual maturity date for securities with a fair value equal to or below par.

(d) The weighted-average maturity of total available-for-sale investment securities was 3.4 years at December 31, 2020, with a corresponding weighted-average yield of 1.61 percent.

(e) Weighted-average yields for obligations of state and political subdivisions are presented on a fully-taxable equivalent basis based on a federal income tax rate of 21 percent. Yields on investment securities are computed based on amortized cost balances.

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Loans and Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2021

Receivables [Abstract]

Composition of Loan Portfolio

The composition of the loan portfolio, disaggregated by class and underlying specific portfolio type, was as follows:

	September 30, 2021					December 31, 2020
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	95,876		32.2	%	$	97,315		32.7	%
Lease financing		5,137		1.8			5,556		1.9
Total commercial		101,013		34.0			102,871		34.6
Commercial Real Estate
Commercial mortgages		28,029		9.4			28,472		9.6
Construction and development		10,779		3.6			10,839		3.6
Total commercial real estate		38,808		13.0			39,311		13.2
Residential Mortgages
Residential mortgages		65,941		22.2			66,525		22.4
Home equity loans, first liens		9,013		3.0			9,630		3.2
Total residential mortgages		74,954		25.2			76,155		25.6
Credit Card		22,137		7.4			22,346		7.5
Other Retail
Retail leasing		7,505		2.5			8,150		2.7
Home equity and second mortgages		10,718		3.6			12,472		4.2
Revolving credit		2,682		.9			2,688		.9
Installment		16,166		5.5			13,823		4.6
Automobile		23,488		7.9			19,722		6.6
Student		137		–			169		.1
Total other retail		60,696		20.4			57,024		19.1
Total loans	$	297,608		100.0	%	$	297,707		100.0	%

Activity in Allowance for Credit Losses by Portfolio Class

Activity in the allowance for credit losses by portfolio class was as follows:

Three Months Ended September 30 (Dollars in Millions)	Commercial			Commercial Real Estate			Residential Mortgages			Credit Card			Other Retail			Total Loans
2021
Balance at beginning of period		$1,838			$1,409			$478			$1,891			$   994			$6,610
Add
Provision for credit losses		(75	)		(104	)		3			(23	)		36			(163	)
Deduct
Loans charged-off		40			14			3			154			55			266
Less recoveries of loans charged-off		(26	)		(1	)		(13	)		(43	)		(36	)		(119	)
Net loan charge-offs (recoveries)		14			13			(10	)		111			19			147
Balance at end of period		$1,749			$1,292			$491			$1,757			$1,011			$6,300
2020
Balance at beginning of period		$2,645			$1,269			$633			$2,156			$1,187			$7,890
Add
Provision for credit losses		20			263			(49	)		369			32			635
Deduct
Loans charged-off		193			89			4			236			89			611
Less recoveries of loans charged-off		(15	)		(6	)		(7	)		(35	)		(33	)		(96	)
Net loan charge-offs (recoveries)		178			83			(3	)		201			56			515
Balance at end of period		$2,487			$1,449			$587			$2,324			$1,163			$8,010

Nine Months Ended September 30 (Dollars in Millions)	Commercial			Commercial Real Estate			Residential Mortgages			Credit Card			Other Retail			Total Loans
2021
Balance at beginning of period		$2,423			$1,544			$573			$2,355			$1,115			$8,010
Add
Provision for credit losses		(577	)		(246	)		(107	)		(195	)		(35	)		(1,160	)
Deduct
Loans charged-off		184			28			13			536			193			954
Less recoveries of loans charged-off		(87	)		(22	)		(38	)		(133	)		(124	)		(404	)
Net loan charge-offs (recoveries)		97			6			(25	)		403			69			550
Balance at end of period		$1,749			$1,292			$491			$1,757			$1,011			$6,300
2020
Balance at beginning of period		$1,484			$   799			$433			$1,128			$   647			$4,491
Add
Change in accounting principle (a)		378			(122	)		(30	)		872			401			1,499
Provision for credit losses		988			875			179			988			335			3,365
Deduct
Loans charged-off		406			112			15			775			316			1,624
Less recoveries of loans charged-off		(43	)		(9	)		(20	)		(111	)		(96	)		(279	)
Net loan charge-offs (recoveries)		363			103			(5	)		664			220			1,345
Balance at end of period		$2,487			$1,449			$587			$2,324			$1,163			$8,010

(a) Effective January 1, 2020, the Company adopted accounting guidance which changed impairment recognition of financial instruments to a model that is based on expected losses rather than incurred losses.

Summary of Loans by Portfolio Class, Including Delinquency Status of those that Continue to Accrue Interest and are Nonperforming

The following table provides a summary of loans by portfolio class, including the delinquency status of those that continue to accrue interest, and those that are nonperforming:

	Accruing
(Dollars in Millions)	Current		30-89 Days Past Due		90 Days or More Past Due		Nonperforming (b)		Total
September 30, 2021
Commercial	$	100,595		$   163		$  39		$   216		$101,013
Commercial real estate		38,459		32		21		296		38,808
Residential mortgages (a)		74,450		153		114		237		74,954
Credit card		21,807		183		147		–		22,137
Other retail		60,224		251		64		157		60,696
Total loans	$	295,535		$   782		$385		$   906		$297,608
December 31, 2020
Commercial	$	102,127		$   314		$  55		$   375		$102,871
Commercial real estate		38,676		183		2		450		39,311
Residential mortgages (a)		75,529		244		137		245		76,155
Credit card		21,918		231		197		–		22,346
Other retail		56,466		318		86		154		57,024
Total loans	$	294,716		$1,290		$477		$1,224		$297,707

(a) At September 30, 2021, $946 million of loans 30–89 days past due and $1.5 billion of loans 90 days or more past due purchased from Government National Mortgage Association (“GNMA”) mortgage pools whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs, were classified as current, compared with $1.4 billion and $1.8 billion at December 31, 2020, respectively.

(b) Substantially all nonperforming loans at September 30, 2021 and December 31, 2020, had an associated allowance for credit losses. The Company recognized interest income on nonperforming loans of $4 million and $9 million for the three months ended September 30, 2021 and 2020, respectively, and $11 million and $19 million for the nine months ended September 30, 2021 and 2020, respectively.

Summary of Loans by Portfolio Class and Company's Internal Credit Quality Rating

The following table provides a summary of loans by portfolio class and the Company’s internal credit quality rating:

	September 30, 2021										December 31, 2020
			Criticized										Criticized
(Dollars in Millions)	Pass		Special Mention		Classified (a)		Total Criticized		Total		Pass		Special Mention		Classified (a)		Total Criticized		Total
Commercial
Originated in 2021		$  32,826		$   346		$   277		$     623		$  33,449		$          –		$       –		$       –		$         –		$          –
Originated in 2020		17,202		637		252		889		18,091		34,557		1,335		1,753		3,088		37,645
Originated in 2019		11,851		198		63		261		12,112		17,867		269		349		618		18,485
Originated in 2018		6,853		77		51		128		6,981		12,349		351		176		527		12,876
Originated in 2017		3,213		14		53		67		3,280		5,257		117		270		387		5,644
Originated prior to 2017		3,373		30		40		70		3,443		4,954		128		115		243		5,197
Revolving		23,204		353		100		453		23,657		22,445		299		280		579		23,024
Total commercial		98,522		1,655		836		2,491		101,013		97,429		2,499		2,943		5,442		102,871
Commercial real estate
Originated in 2021		9,456		50		772		822		10,278		–		–		–		–		–
Originated in 2020		8,238		119		435		554		8,792		9,446		461		1,137		1,598		11,044
Originated in 2019		7,382		298		694		992		8,374		9,514		454		1,005		1,459		10,973
Originated in 2018		3,662		142		330		472		4,134		6,053		411		639		1,050		7,103
Originated in 2017		1,943		25		150		175		2,118		2,650		198		340		538		3,188
Originated prior to 2017		3,239		26		103		129		3,368		4,762		240		309		549		5,311
Revolving		1,556		1		187		188		1,744		1,445		9		238		247		1,692
Total commercial real estate		35,476		661		2,671		3,332		38,808		33,870		1,773		3,668		5,441		39,311
Residential mortgages (b)
Originated in 2021		21,045		–		–		–		21,045		–		–		–		–		–
Originated in 2020		18,043		1		5		6		18,049		23,262		1		3		4		23,266
Originated in 2019		8,508		1		18		19		8,527		13,969		1		17		18		13,987
Originated in 2018		3,492		–		21		21		3,513		5,670		1		22		23		5,693
Originated in 2017		4,494		–		21		21		4,515		6,918		1		24		25		6,943
Originated prior to 2017		19,002		–		302		302		19,304		25,921		2		342		344		26,265
Revolving		1		–		–		–		1		1		–		–		–		1
Total residential mortgages		74,585		2		367		369		74,954		75,741		6		408		414		76,155
Credit card (c)		21,990		–		147		147		22,137		22,149		–		197		197		22,346
Other retail
Originated in 2021		17,248		–		3		3		17,251		–		–		–		–		–
Originated in 2020		13,318		–		8		8		13,326		17,589		–		7		7		17,596
Originated in 2019		8,300		–		16		16		8,316		11,605		–		23		23		11,628
Originated in 2018		4,332		–		16		16		4,348		6,814		–		27		27		6,841
Originated in 2017		2,130		–		11		11		2,141		3,879		–		22		22		3,901
Originated prior to 2017		2,259		–		16		16		2,275		3,731		–		29		29		3,760
Revolving		12,400		–		123		123		12,523		12,647		–		110		110		12,757
Revolving converted to term		473		–		43		43		516		503		–		38		38		541
Total other retail		60,460		–		236		236		60,696		56,768		–		256		256		57,024
Total loans		$291,033		$2,318		$4,257		$  6,575		$297,608		$285,957		$4,278		$7,472		$11,750		$297,707
Total outstanding commitments		$645,955		$4,606		$6,342		$10,948		$656,903		$627,606		$8,772		$9,374		$18,146		$645,752

Note: Year of origination is based on the origination date of a loan, or for existing loans the date when the maturity date, pricing or commitment amount is amended.

(a) Classified rating on consumer loans primarily based on delinquency status.

(b) At September 30, 2021, $1.5 billion of GNMA loans 90 days or more past due and $1.2 billion of restructured GNMA loans whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs were classified with a pass rating, compared with $1.8 billion and $1.4 billion at December 31, 2020, respectively.

(c) All credit card loans are considered revolving loans.

Summary of Loans Modified as TDRs

The following table provides a summary of loans modified as TDRs for the periods presented by portfolio class:

	2021						2020
(Dollars in Millions)	Number of Loans		Pre-Modification Outstanding Loan Balance		Post-Modification Outstanding Loan Balance		Number of Loans		Pre-Modification Outstanding Loan Balance		Post-Modification Outstanding Loan Balance
Three Months Ended September 30
Commercial		506		$     46		$  47		699		$   262		$   159
Commercial real estate		14		12		13		51		105		81
Residential mortgages		171		54		54		374		108		108
Credit card		6,656		38		38		4,699		27		27
Other retail		382		9		9		508		26		26
Total loans, excluding loans purchased from GNMA mortgage pools		7,729		159		161		6,331		528		401
Loans purchased from GNMA mortgage pools		802		113		118		735		106		105
Total loans		8,531		$   272		$279		7,066		$   634		$   506
Nine Months Ended September 30
Commercial		1,736		$   133		$120		2,837		$   505		$   375
Commercial real estate		100		136		125		116		165		141
Residential mortgages		867		299		298		585		142		142
Credit card		17,492		102		103		19,282		110		112
Other retail		2,175		64		58		1,537		50		48
Total loans, excluding loans purchased from GNMA mortgage pools		22,370		734		704		24,357		972		818
Loans purchased from GNMA mortgage pools		1,839		267		276		3,648		514		503
Total loans		24,209		$1,001		$980		28,005		$1,486		$1,321

Summary of Loans Modified as TDRs in the Past Twelve Months that have Subsequently Defaulted

The following table provides a summary of TDR loans that defaulted (fully or partially charged-off or became 90 days or more past due) for the periods presented, that were modified as TDRs within 12 months previous to default:

	2021				2020
(Dollars in Millions)	Number of Loans		Amount Defaulted		Number of Loans		Amount Defaulted
Three Months Ended September 30
Commercial		244		$  5		305		$  21
Commercial real estate		4		1		5		8
Residential mortgages		20		2		5		2
Credit card		2,069		12		1,363		8
Other retail		124		2		55		1
Total loans, excluding loans purchased from GNMA mortgage pools		2,461		22		1,733		40
Loans purchased from GNMA mortgage pools		29		5		72		9
Total loans		2,490		$27		1,805		$  49
Nine Months Ended September 30
Commercial		856		$29		922		$  49
Commercial real estate		16		7		33		24
Residential mortgages		47		5		23		4
Credit card		5,638		32		5,169		27
Other retail		595		10		245		3
Total loans, excluding loans purchased from GNMA mortgage pools		7,152		83		6,392		107
Loans purchased from GNMA mortgage pools		102		15		427		57
Total loans		7,254		$98		6,819		$164

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Accounting for Transfers and Servicing of Financial Assets and Variable Interest Entities (Tables)

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Summary of Investments in Community Development and Tax-advantaged VIEs

The following table provides a summary of investments in community development and tax-advantaged VIEs that the Company has not consolidated:

(Dollars in Millions)	September 30, 2021		December 31, 2020
Investment carrying amount	$	4,865	$	5,378
Unfunded capital and other commitments		2,180		2,334
Maximum exposure to loss		10,368		11,219

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Mortgage Servicing Rights (Tables)

9 Months Ended

Sep. 30, 2021

Text Block [Abstract]

Changes in Fair Value of Capitalized MSRs

Changes in fair value of capitalized MSRs are summarized as follows:

	Three Months Ended September 30						Nine Months Ended September 30
(Dollars in Millions)	2021			2020			2021			2020
Balance at beginning of period	$	2,713		$	1,840		$	2,210		$	2,546
Rights purchased		9			8			36			16
Rights capitalized		284			321			896			712
Rights sold (a)		—			1			1			3
Changes in fair value of MSRs
Due to fluctuations in market interest rates (b)		53			(8	)		307			(815	)
Due to revised assumptions or models (c)		(30	)		(7	)		(169	)		37
Other changes in fair value (d)		(119	)		(177	)		(371	)		(521	)
Balance at end of period	$	2,910		$	1,978		$	2,910		$	1,978

(a) MSRs sold include those having a negative fair value, resulting from the loans being severely delinquent.

(b) Includes changes in MSR value associated with changes in market interest rates, including estimated prepayment rates and anticipated earnings on escrow deposits.

(c) Includes changes in MSR value not caused by changes in market interest rates, such as changes in assumed cost to service, ancillary income and option adjusted spread, as well as the impact of any model changes.

(d) Primarily the change in MSR value from passage of time and cash flows realized (decay), but also includes the impact of changes to expected cash flows not associated with changes in market interest rates, such as the impact of delinquencies.

Sensitivity to Changes in Interest Rates of the Fair Value of MSR Portfolio and Related Derivative Instruments

The estimated sensitivity to changes in interest rates of the fair value of the MSR portfolio and the related derivative instruments was as follows:

	September 30, 2021																		December 31, 2020
(Dollars in Millions)	Down 100 bps			Down 50 bps			Down 25 bps			Up 25 bps			Up 50 bps			Up 100 bps			Down 100 bps			Down 50 bps			Down 25 bps			Up 25 bps			Up 50 bps			Up 100 bps
MSR portfolio	$	(619	)	$	(320	)	$	(161	)	$	154		$	294		$	520		$	(442	)	$	(271	)	$	(150	)	$	169		$	343		$	671
Derivative instrument hedges		574			290			144			(137	)		(270	)		(524	)		523			281			145			(149	)		(304	)		(625	)
Net sensitivity	$	(45	)	$	(30	)	$	(17	)	$	17		$	24		$	(4	)	$	81		$	10		$	(5	)	$	20		$	39		$	46

MSRs and Related Characteristics by Portfolio

A summary of the Company’s MSRs and related characteristics by portfolio was as follows:

	September 30, 2021												December 31, 2020
(Dollars in Millions)	HFA			Government			Conventional(d)			Total			HFA			Government			Conventional(d)			Total
Servicing portfolio (a)	$	40,038		$	22,392		$	153,543		$	215,973		$	40,396		$	25,474		$	143,085		$	208,955
Fair value	$	508		$	304		$	2,098		$	2,910		$	406		$	261		$	1,543		$	2,210
Value (bps) (b)		127			136			137			135			101			102			108			106
Weighted-average servicing fees (bps)		36			41			30			32			35			40			30			32
Multiple (value/servicing fees)		3.56			3.34			4.51			4.16			2.87			2.56			3.55			3.26
Weighted-average note rate		4.14	%		3.75	%		3.48	%		3.63	%		4.43	%		3.91	%		3.78	%		3.92	%
Weighted-average age (in years)		3.8			5.8			3.4			3.7			3.8			5.6			4.2			4.3
Weighted-average expected prepayment (constant prepayment rate)		11.3	%		13.4	%		9.4	%		10.2	%		14.1	%		18.0	%		13.8	%		14.4	%
Weighted-average expected life (in years)		6.6			5.5			7.0			6.8			5.6			4.3			5.5			5.4
Weighted-average option adjusted spread (c)		7.7	%		7.3	%		6.5	%		6.8	%		7.7	%		7.3	%		6.2	%		6.6	%

(a) Represents principal balance of mortgages having corresponding MSR asset.

(b) Calculated as fair value divided by the servicing portfolio.

(c) Option adjusted spread is the incremental spread added to the risk-free rate to reflect optionality and other risk inherent in the MSRs.

(d) Represents loans sold primarily to GSEs.

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Preferred Stock (Tables)

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Number of Shares Issued and Outstanding and Carrying Amount of Preferred Stock

The number of shares issued and outstanding and the carrying amount of each outstanding series of the Company’s preferred stock were as follows:

	September 30, 2021								December 31, 2020
(Dollars in Millions)	Shares Issued and Outstanding		Liquidation Preference		Discount		Carrying Amount		Shares Issued and Outstanding		Liquidation Preference		Discount		Carrying Amount
Series A		12,510	$	1,251	$	145	$	1,106		12,510	$	1,251	$	145	$	1,106
Series B		40,000		1,000		—		1,000		40,000		1,000		—		1,000
Series F		44,000		1,100		12		1,088		44,000		1,100		12		1,088
Series I		—		—		—		—		30,000		750		5		745
Series J		40,000		1,000		7		993		40,000		1,000		7		993
Series K		23,000		575		10		565		23,000		575		10		565
Series L		20,000		500		14		486		20,000		500		14		486
Series M		30,000		750		20		730		—		—		—		—
Total preferred stock (a)		209,510	$	6,176	$	208	$	5,968		209,510	$	6,176	$	193	$	5,983

(a) The par value of all shares issued and outstanding at September 30, 2021 and December 31, 2020, was $1.00 per share.

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Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Reconciliation of Transactions Affecting Accumulated Other Comprehensive Income (Loss) Included in Shareholders' Equity

Shareholders' equity is affected by transactions and valuations of asset and liability positions that require adjustments to accumulated other comprehensive income (loss). The reconciliation of the transactions affecting accumulated other comprehensive income (loss) included in shareholders' equity is as follows:

Three Months Ended September 30 (Dollars in Millions)	Unrealized Gains (Losses) on Investment Securities Available-For- Sale			Unrealized Gains (Losses) on Derivative Hedges			Unrealized Gains (Losses) on Retirement Plans			Foreign Currency Translation			Total
2021
Balance at beginning of period	$	735		$	(107	)	$	(1,783	)	$	(47	)	$	(1,202	)
Changes in unrealized gains and losses		(825	)		8			—			—			(817	)
Foreign currency translation adjustment (a)		—			—			—			(1	)		(1	)
Reclassification to earnings of realized gains and losses		(20	)		8			39			—			27
Applicable income taxes		215			(4	)		(10	)		—			201
Balance at end of period	$	105		$	(95	)	$	(1,754	)	$	(48	)	$	(1,792	)
2020
Balance at beginning of period	$	2,701		$	(240	)	$	(1,589	)	$	(74	)	$	798
Changes in unrealized gains and losses		(305	)		27			—			—			(278	)
Foreign currency translation adjustment (a)		—			—			—			6			6
Reclassification to earnings of realized gains and losses		(12	)		3			32			—			23
Applicable income taxes		81			(7	)		(9	)		(2	)		63
Balance at end of period	$	2,465		$	(217	)	$	(1,566	)	$	(70	)	$	612

(a) Represents the impact of changes in foreign currency exchange rates on the Company's investment in foreign operations and related hedges.

Nine Months Ended September 30 (Dollars in Millions)	Unrealized Gains (Losses) on Investment Securities Available-For- Sale			Unrealized Gains (Losses) on Derivative Hedges			Unrealized Gains (Losses) on Retirement Plans			Foreign Currency Translation			Total
2021
Balance at beginning of period	$	2,417		$	(189	)	$	(1,842	)	$	(64	)	$	322
Changes in unrealized gains and losses		(3,008	)		121			—			—			(2,887	)
Foreign currency translation adjustment (a)		—			—			—			23			23
Reclassification to earnings of realized gains and losses		(88	)		4			118			—			34
Applicable income taxes		784			(31	)		(30	)		(7	)		716
Balance at end of period	$	105		$	(95	)	$	(1,754	)	$	(48	)	$	(1,792	)
2020
Balance at beginning of period	$	379		$	(51	)	$	(1,636	)	$	(65	)	$	(1,373	)
Changes in unrealized gains and losses		2,935			(230	)		—			—			2,705
Foreign currency translation adjustment (a)		—			—			—			(6	)		(6	)
Reclassification to earnings of realized gains and losses		(143	)		7			94			—			(42	)
Applicable income taxes		(706	)		57			(24	)		1			(672	)
Balance at end of period	$	2,465		$	(217	)	$	(1,566	)	$	(70	)	$	612

(a) Represents the impact of changes in foreign currency exchange rates on the Company's investment in foreign operations and related hedges.

Impact to Net Income for Items Reclassified out of Accumulated Other Comprehensive Income and into Earnings

Additional detail about the impact to net income for items reclassified out of accumulated other comprehensive income (loss) and into earnings is as follows:

	Impact to Net Income												Affected Line Item in the Consolidated Statement of Income
	Three Months Ended September 30						Nine Months Ended September 30
(Dollars in Millions)	2021			2020			2021			2020
Unrealized gains (losses) on investment securities available-for-sale
Realized gains (losses) on sale of investment securities	$	20		$	12		$	88		$	143		Securities gains (losses), net
		(5	)		(3	)		(22	)		(36	)	Applicable income taxes
		15			9			66			107		Net-of-tax
Unrealized gains (losses) on derivative hedges
Realized gains (losses) on derivative hedges		(8	)		(3	)		(4	)		(7	)	Interest expense
		2			1			1			2		Applicable income taxes
		(6	)		(2	)		(3	)		(5	)	Net-of-tax
Unrealized gains (losses) on retirement plans
Actuarial gains (losses) and prior service cost (credit) amortization		(39	)		(32	)		(118	)		(94	)	Other noninterest expense
		10			9			30			24		Applicable income taxes
		(29	)		(23	)		(88	)		(70	)	Net-of-tax
Total impact to net income	$	(20	)	$	(16	)	$	(25	)	$	32

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Components of Earnings Per Share

The components of earnings per share were:

	Three Months Ended September 30						Nine Months Ended September 30
(Dollars and Shares in Millions, Except Per Share Data)	2021			2020			2021			2020
Net income attributable to U.S. Bancorp	$	2,028		$	1,580		$	6,290		$	3,440
Preferred dividends		(84	)		(79	)		(232	)		(229	)
Impact of preferred stock redemption (a)		—			—			(5	)		—
Earnings allocated to participating stock awards		(10	)		(7	)		(30	)		(15	)
Net income applicable to U.S. Bancorp common shareholders	$	1,934		$	1,494		$	6,023		$	3,196
Average common shares outstanding		1,483			1,506			1,491			1,510
Net effect of the exercise and assumed purchase of stock awards		1			1			1			1
Average diluted common shares outstanding		1,484			1,507			1,492			1,511
Earnings per common share	$	1.30		$	.99		$	4.04		$	2.12
Diluted earnings per common share	$	1.30		$	.99		$	4.04		$	2.11

(a) Represents stock issuance costs originally recorded in preferred stock upon the issuance of the Company’s Series I Preferred Stock that were reclassified to retained earnings on the date the Company announced its intent to redeem the outstanding shares.

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Employee Benefits (Tables)

9 Months Ended

Sep. 30, 2021

Retirement Benefits [Abstract]

Components of Net Periodic Benefit Cost

The components of net periodic benefit cost for the Company's retirement plans were:

	Three Months Ended September 30												Nine Months Ended September 30
	Pension Plans						Postretirement Welfare Plan						Pension Plans						Postretirement Welfare Plan
(Dollars in Millions)	2021			2020			2021			2020			2021			2020			2021			2020
Service cost	$	66		$	58		$	—		$	—		$	198		$	176		$	—		$	—
Interest cost		54			59			1			—			164			176			1			1
Expected return on plan assets		(112	)		(101	)		—			—			(337	)		(302	)		—			(2	)
Prior service cost (credit) amortization		—			—			(1	)		—			(1	)		—			(3	)		(2	)
Actuarial loss (gain) amortization		42			34			(2	)		(2	)		127			101			(5	)		(5	)
Net periodic benefit cost (a)	$	50		$	50		$	(2	)	$	(2	)	$	151		$	151		$	(7	)	$	(8	)

(a) Service cost is included in employee benefits expense on the Consolidated Statement of Income. All other components are included in other noninterest expense on the Consolidated Statement of Income.

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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Components of Income Tax Expense

The components of income tax expense were:

	Three Months Ended September 30					Nine Months Ended September 30
(Dollars in Millions)	2021		2020			2021		2020
Federal
Current	$	354	$	(53	)	$	1,057	$	966
Deferred		99		306			305		(459	)
Federal income tax		453		253			1,362		507
State
Current		94		92			297		298
Deferred		17		2			63		(134	)
State income tax		111		94			360		164
Total income tax provision	$	564	$	347		$	1,722	$	671

Reconciliation of Expected Income Tax Expense at Federal Statutory Rate of 21 Percent to Company's Applicable Income Tax Expense

A reconciliation of expected income tax expense at the federal statutory rate of 21 percent to the Company’s applicable income tax expense follows:

	Three Months Ended September 30						Nine Months Ended September 30
(Dollars in Millions)	2021			2020			2021			2020
Tax at statutory rate	$	546		$	406		$	1,686		$	867
State income tax, at statutory rates, net of federal tax benefit		108			75			327			170
Tax effect of
Tax credits and benefits, net of related expenses		(91	)		(82	)		(267	)		(280	)
Exam resolutions		—			(47	)		—			(47	)
Tax-exempt income		(28	)		(29	)		(85	)		(87	)
Other items		29			24			61			48
Applicable income taxes	$	564		$	347		$	1,722		$	671

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Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Asset and Liability Management Derivative Positions of Company

The following table summarizes the asset and liability management derivative positions of the Company:

	Asset Derivatives						Liability Derivatives
(Dollars in Millions)	Notional Value		Fair Value		Weighted- Average Remaining Maturity In Years		Notional Value		Fair Value		Weighted- Average Remaining Maturity In Years
September 30, 2021
Fair value hedges
Interest rate contracts
Receive fixed/pay floating swaps	$	700	$	—		.04	$	2,250	$	—		3.70
Pay fixed/receive floating swaps		1,330		—		9.23		1,850		—		8.95
Cash flow hedges
Interest rate contracts
Pay fixed/receive floating swaps		—		—		—		250		—		.23
Net investment hedges
Foreign exchange forward contracts		826		7		.06		—		—		—
Other economic hedges
Interest rate contracts
Futures and forwards
Buy		5,325		29		.07		10,347		69		.05
Sell		28,069		139		.29		17,637		57		.14
Options
Purchased		16,930		235		3.34		—		—		—
Written		3,620		78		.09		7,541		241		2.11
Receive fixed/pay floating swaps		4,423		—		4.38		5,690		—		10.29
Pay fixed/receive floating swaps		2,006		—		4.26		4,562		—		4.24
Foreign exchange forward contracts		292		2		.04		275		2		.05
Equity contracts		21		2		.31		184		5		.70
Other (a)		601		9		.02		2,386		147		1.31
Total	$	64,143	$	501			$	52,972	$	521
December 31, 2020
Fair value hedges
Interest rate contracts
Receive fixed/pay floating swaps	$	8,400	$	—		1.76	$	—	$	—		—
Pay fixed/receive floating swaps		—		—		—		100		—		9.63
Cash flow hedges
Interest rate contracts
Pay fixed/receive floating swaps		—		—		—		3,250		—		4.59
Net investment hedges
Foreign exchange forward contracts		479		—		.06		336		3		.06
Other economic hedges
Interest rate contracts
Futures and forwards
Buy		16,431		73		.50		1,925		5		.07
Sell		10,440		48		.04		28,976		157		.07
Options
Purchased		11,610		121		4.11		—		—		—
Written		5,073		202		.13		7,770		198		2.53
Receive fixed/pay floating swaps		11,064		—		7.31		907		—		23.43
Pay fixed/receive floating swaps		78		—		13.68		8,538		—		5.67
Foreign exchange forward contracts		292		1		.04		341		2		.05
Equity contracts		127		3		.39		45		—		.46
Other (a)		47		1		.11		1,832		183		2.44
Total	$	64,041	$	449			$	54,020	$	548

(a) Includes derivative liability swap agreements related to the sale of a portion of the Company’s Class B common and preferred shares of Visa Inc. The Visa swap agreements had a total notional value, fair value and weighted-average remaining maturity of $1.8 billion, $139 million and 1.75 years at September 30, 2021, respectively, compared to $1.8 billion, $182 million and 2.50 years at December 31, 2020, respectively. In addition, includes short-term underwriting purchase and sale commitments with total asset and liability notional values of $602 million at September 30, 2021, and $47 million at December 31, 2020.

Customer-Related Derivative Positions of Company

The following table summarizes the customer-related derivative positions of the Company:

	Asset Derivatives						Liability Derivatives
(Dollars in Millions)	Notional Value		Fair Value		Weighted- Average Remaining Maturity In Years		Notional Value		Fair Value		Weighted- Average Remaining Maturity In Years
September 30, 2021
Interest rate contracts
Receive fixed/pay floating swaps	$	124,770	$	2,398		4.80	$	46,250	$	296		6.61
Pay fixed/receive floating swaps		47,573		80		6.65		119,027		784		4.51
Other (a)		8,463		1		3.98		7,260		3		4.66
Options
Purchased		85,251		217		1.29		2,701		41		1.86
Written		2,690		41		1.85		79,781		192		1.23
Futures
Buy		3,456		—		.14		318		—		1.97
Sell		2,583		—		1.43		565		—		.45
Foreign exchange rate contracts
Forwards, spots and swaps		38,518		1,112		1.20		39,988		1,121		1.45
Options
Purchased		629		18		.96		—		—		—
Written		—		—		—		629		18		.96
Credit contracts		2,737		—		2.49		6,934		6		4.41
Total	$	316,670	$	3,867			$	303,453	$	2,461
December 31, 2020
Interest rate contracts
Receive fixed/pay floating swaps	$	144,859	$	3,782		4.93	$	12,027	$	99		8.72
Pay fixed/receive floating swaps		15,048		2		8.43		134,963		1,239		4.71
Other (a)		9,921		6		3.75		6,387		3		4.22
Options
Purchased		72,655		111		1.40		1,454		46		2.96
Written		1,736		46		2.76		68,205		81		1.25
Futures
Buy		1,851		—		1.22		924		—		.05
Sell		—		—		—		4,090		—		.72
Foreign exchange rate contracts
Forwards, spots and swaps		44,845		1,590		.96		45,992		1,565		1.13
Options
Purchased		519		14		.90		—		—		—
Written		—		—		—		519		14		.90
Credit contracts		2,876		1		2.75		7,479		7		3.81
Total	$	294,310	$	5,552			$	282,040	$	3,054

(a) Primarily represents floating rate interest rate swaps that pay based on differentials between specified interest rate indexes.

Summary of Effective Portion of Gains (Losses) Recognized in Other Comprehensive Income (Loss) and Gains (Losses) Reclassified from Other Comprehensive Income (Loss) into Earnings

The table below shows the effective portion of the gains (losses) recognized in other comprehensive income (loss) and the gains (losses) reclassified from other comprehensive income (loss) into earnings (net-of-tax):

	Three Months Ended September 30											Nine Months Ended September 30
	Gains (Losses) Recognized in Other Comprehensive Income (Loss)					Gains (Losses) Reclassified from Other Comprehensive Income (Loss) into Earnings						Gains (Losses) Recognized in Other Comprehensive Income (Loss)					Gains (Losses) Reclassified from Other Comprehensive Income (Loss) into Earnings
(Dollars in Millions)	2021		2020			2021			2020			2021		2020			2021			2020
Asset and Liability Management Positions
Cash flow hedges
Interest rate contracts	$	6	$	21		$	(6	)	$	(2	)	$	91	$	(171	)	$	(3	)	$	(5	)
Net investment hedges
Foreign exchange forward contracts		17		(4	)		—			—			16		6			—			—
Non-derivative debt instruments		27		(45	)		—			—			61		(41	)		—			—

Note: The Company does not exclude components from effectiveness testing for cash flow and net investment hedges.

Effect of Fair Value and Cash Flow Hedge Accounting Included in Interest Expense on Consolidated Statement of Income

The table below shows the effect of fair value and cash flow hedge accounting on the Consolidated Statement of Income:

	Interest Income					Interest Expense						Interest Income					Interest Expense
	Three Months Ended September 30											Nine Months Ended September 30
(Dollars in Millions)	2021			2020		2021			2020			2021			2020		2021			2020
Total amount of income and expense line items presented in the Consolidated Statement of Income in which the effects of fair value or cash flow hedges are recorded	$	3,409		$	3,573	$	238		$	346		$	10,132		$	11,361	$	761		$	1,711
Asset and Liability Management Positions
Fair value hedges
Interest rate contract derivatives		45			—		112			28			14			—		185			(166	)
Hedged items		(45	)		—		(113	)		(27	)		(15	)		—		(185	)		167
Cash flow hedges
Interest rate contract derivatives		—			—		8			3			—			—		4			7

Note: The Company does not exclude components from effectiveness testing for fair value and cash flow hedges. The Company reclassified losses of $13 million and $40 million into earnings during the three and nine months ended September 30, 2021, respectively, as a result of realized cash flows on discontinued cash flow hedges. The Company reclassified losses of $18 million and $24 million into earnings during the three and nine months ended September 30, 2020, respectively, as a result of realized cash flows on discontinued cash flow hedges. No amounts were reclassified into earnings on discontinued cash flow hedges because it is probable the original hedged forecasted cash flows will not occur. 

Summary of Cumulative Hedging Adjustments and the Carrying Amount of Assets and Liabilities Designated in Fair Value Hedges

The table below shows cumulative hedging adjustments and the carrying amount of assets and liabilities designated in fair value hedges:

	Carrying Amount of the Hedged Assets and Liabilities				Cumulative Hedging Adjustment (a)
(Dollars in Millions)	September 30, 2021		December 31, 2020		September 30, 2021			December 31, 2020
Line Item in the Consolidated Balance Sheet
Available-for-sale investment securities	$	3,127	$	99	$	(22	)	$	(1	)
Long-term debt		2,940		8,567		692			903

(a) The cumulative hedging adjustment related to discontinued hedging relationships on available-for-sale investment securities and long-term debt was $(6) million and $700 million, respectively, at September 30, 2021. The cumulative hedging adjustment related to discontinued hedging relationships on long-term debt was $726 million at December 31, 2020.

Summary of Gains (Losses) Recognized in Earnings for Other Economic Hedges and Customer-Related Positions

The table below shows the gains (losses) recognized in earnings for other economic hedges and the customer-related positions:

	Location of Gains (Losses) Recognized in Earnings		Three Months Ended September 30						Nine Months Ended September 30
(Dollars in Millions)			2021			2020			2021			2020
Asset and Liability Management Positions
Other economic hedges
Interest rate contracts
Futures and forwards		Mortgage banking revenue/ other noninterest income	$	101		$	46		$	432		$	53
Purchased and written options		Mortgage banking revenue		171			428			436			1,173
Swaps		Mortgage banking revenue		(39	)		(51	)		(236	)		724
Foreign exchange forward contracts		Other noninterest income		9			(2	)		(1	)		9
Equity contracts		Compensation expense		1			3			6			—
Other		Other noninterest income		2			(69	)		3			(70	)
Customer-Related Positions
Interest rate contracts
Swaps		Commercial products revenue		26			59			78			103
Purchased and written options		Commercial products revenue		(1	)		(14	)		(4	)		3
Futures		Commercial products revenue		—			—			—			(18	)
Foreign exchange rate contracts
Forwards, spots and swaps		Commercial products revenue		23			20			69			54
Purchased and written options		Commercial products revenue		1			1			1			1
Credit contracts		Commercial products revenue		(1	)		(10	)		(3	)		(15	)

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Netting Arrangements for Certain Financial Instruments and Securities Financing Activities (Tables)

9 Months Ended

Sep. 30, 2021

Text Block [Abstract]

Summary of Maturities by Category of Collateral Pledged for Repurchase Agreements and Securities Loaned Transactions

The following table summarizes the maturities by category of collateral pledged for repurchase agreements and securities loaned transactions:

(Dollars in Millions)	Overnight and Continuous		Less Than 30 Days		30-89 Days		Greater Than 90 Days		Total
September 30, 2021
Repurchase agreements
U.S. Treasury and agencies	$	568	$	–	$	–	$	–	$	568
Residential agency mortgage-backed securities		838		–		–		–		838
Corporate debt securities		692		–		–		–		692
Total repurchase agreements		2,098		–		–		–		2,098
Securities loaned
Corporate debt securities		166		–		–		–		166
Total securities loaned		166		–		–		–		166
Gross amount of recognized liabilities	$	2,264	$	–	$	–	$	–	$	2,264
December 31, 2020
Repurchase agreements
U.S. Treasury and agencies	$	472	$	–	$	–	$	–	$	472
Residential agency mortgage-backed securities		398		–		–		–		398
Corporate debt securities		560		–		–		–		560
Total repurchase agreements		1,430		–		–		–		1,430
Securities loaned
Corporate debt securities		218		–		–		–		218
Total securities loaned		218		–		–		–		218
Gross amount of recognized liabilities	$	1,648	$	–	$	–	$	–	$	1,648

Information on Company's Accounting Netting Adjustments and Items Not Offset in Consolidated Balance Sheet Assets But Available for Offset in Event of Default

The following tables provide information on the Company’s netting adjustments, and items not offset on the Consolidated Balance Sheet but available for offset in the event of default:

(Dollars in Millions)	Gross Recognized Assets		Gross Amounts Offset on the Consolidated Balance Sheet (a)			Net Amounts Presented on the Consolidated Balance Sheet		Gross Amounts Not Offset on the Consolidated Balance Sheet						Net Amount
								Financial Instruments (b)			Collateral Received (c)
September 30, 2021
Derivative assets (d)	$	4,275	$	(1,858	)	$	2,417	$	(104	)	$	(141	)	$	2,172
Reverse repurchase agreements		418		–			418		(317	)		(101	)		–
Securities borrowed		1,978		–			1,978		–			(1,925	)		53
Total	$	6,671	$	(1,858	)	$	4,813	$	(421	)	$	(2,167	)	$	2,225
December 31, 2020
Derivative assets (d)	$	5,744	$	(1,874	)	$	3,870	$	(109	)	$	(287	)	$	3,474
Reverse repurchase agreements		377		–			377		(262	)		(115	)		–
Securities borrowed		1,716		–			1,716		–			(1,670	)		46
Total	$	7,837	$	(1,874	)	$	5,963	$	(371	)	$	(2,072	)	$	3,520

(a) Includes $750 million and $898 million of cash collateral related payables that were netted against derivative assets at September 30, 2021 and December 31, 2020, respectively.

(b) For derivative assets this includes any derivative liability fair values that could be offset in the event of counterparty default; for reverse repurchase agreements this includes any repurchase agreement payables that could be offset in the event of counterparty default; for securities borrowed this includes any securities loaned payables that could be offset in the event of counterparty default.

(c) Includes the fair value of securities received by the Company from the counterparty. These securities are not included on the Consolidated Balance Sheet unless the counterparty defaults.

(d) Excludes $93 million and $257 million at September 30, 2021 and December 31, 2020, respectively, of derivative assets not subject to netting arrangements.

Information on Company's Accounting Netting Adjustments and Items Not Offset in Consolidated Balance Sheet Liabilities But Available for Offset in Event of Default

(Dollars in Millions)	Gross Recognized Liabilities		Gross Amounts Offset on the Consolidated Balance Sheet (a)			Net Amounts Presented on the Consolidated Balance Sheet		Gross Amounts Not Offset on the Consolidated Balance Sheet						Net Amount
								Financial Instruments (b)			Collateral Pledged (c)
September 30, 2021
Derivative liabilities (d)	$	2,809	$	(1,697	)	$	1,112	$	(104	)	$	–		$	1,008
Repurchase agreements		2,098		–			2,098		(317	)		(1,779	)		2
Securities loaned		166		–			166		–			(164	)		2
Total	$	5,073	$	(1,697	)	$	3,376	$	(421	)	$	(1,943	)	$	1,012
December 31, 2020
Derivative liabilities (d)	$	3,419	$	(2,312	)	$	1,107	$	(109	)	$	–		$	998
Repurchase agreements		1,430		–			1,430		(262	)		(1,168	)		–
Securities loaned		218		–			218		–			(215	)		3
Total	$	5,067	$	(2,312	)	$	2,755	$	(371	)	$	(1,383	)	$	1,001

(a) Includes $589 million and $1.3 billion of cash collateral related receivables that were netted against derivative liabilities at September 30, 2021 and December 31, 2020, respectively.

(b) For derivative liabilities this includes any derivative asset fair values that could be offset in the event of counterparty default; for repurchase agreements this includes any reverse repurchase agreement receivables that could be offset in the event of counterparty default; for securities loaned this includes any securities borrowed receivables that could be offset in the event of counterparty default.

(c) Includes the fair value of securities pledged by the Company to the counterparty. These securities are included on the Consolidated Balance Sheet unless the Company defaults.

(d) Excludes $173 million and $183 million at September 30, 2021 and December 31, 2020, respectively, of derivative liabilities not subject to netting arrangements.

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Fair Values of Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Valuation Assumption Ranges for MSRs

The following table shows the significant valuation assumption ranges for MSRs at September 30, 2021:

	Minimum			Maximum			Weighted- Average (a)
Expected prepayment		3	%		13	%		10	%
Option adjusted spread		6			11			7

(a) Determined based on the relative fair value of the related mortgage loans serviced.

Valuation Assumption Ranges for Derivative Commitments

The following table shows the significant valuation assumption ranges for the Company’s derivative commitments to purchase and originate mortgage loans at September 30, 2021:

	Minimum			Maximum			Weighted- Average (a)
Expected loan close rate		1	%		100	%		76	%
Inherent MSR value (basis points per loan)		47			187			121

(a) Determined based on the relative fair value of the related mortgage loans.

Balances of Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes the balances of assets and liabilities measured at fair value on a recurring basis:

(Dollars in Millions)	Level 1		Level 2		Level 3		Netting			Total
September 30, 2021
Available-for-sale securities
U.S. Treasury and agencies	$	14,344	$	4,147	$	–	$	–		$	18,491
Mortgage-backed securities
Residential agency		–		112,796		–		–			112,796
Commercial agency		–		7,686		–		–			7,686
Asset-backed securities		–		61		8		–			69
Obligations of state and political subdivisions		–		10,326		1		–			10,327
Other		–		7		–		–			7
Total available-for-sale		14,344		135,023		9		–			149,376
Mortgage loans held for sale		–		6,176		–		–			6,176
Mortgage servicing rights		–		–		2,910		–			2,910
Derivative assets		6		2,691		1,671		(1,858	)		2,510
Other assets		322		2,118		–		–			2,440
Total	$	14,672	$	146,008	$	4,590	$	(1,858	)	$	163,412
Derivative liabilities	$	–	$	2,429	$	553	$	(1,697	)	$	1,285
Short-term borrowings and other liabilities (a)		205		1,893		–		–			2,098
Total	$	205	$	4,322	$	553	$	(1,697	)	$	3,383
December 31, 2020
Available-for-sale securities
U.S. Treasury and agencies	$	19,251	$	3,140	$	–	$	–		$	22,391
Mortgage-backed securities
Residential agency		–		99,968		–		–			99,968
Commercial agency		–		5,406		–		–			5,406
Asset-backed securities		–		198		7		–			205
Obligations of state and political subdivisions		–		8,860		1		–			8,861
Other		–		9		–		–			9
Total available-for-sale		19,251		117,581		8		–			136,840
Mortgage loans held for sale		–		8,524		–		–			8,524
Mortgage servicing rights		–		–		2,210		–			2,210
Derivative assets		4		3,235		2,762		(1,874	)		4,127
Other assets		302		1,601		–		–			1,903
Total	$	19,557	$	130,941	$	4,980	$	(1,874	)	$	153,604
Derivative liabilities	$	–	$	3,166	$	436	$	(2,312	)	$	1,290
Short-term borrowings and other liabilities (a)		85		1,672		–		–			1,757
Total	$	85	$	4,838	$	436	$	(2,312	)	$	3,047

Note: Excluded from the table above are equity investments without readily determinable fair values. The Company has elected to carry these investments at historical cost, adjusted for impairment and any changes resulting from observable price changes for identical or similar investments of the issuer. The aggregate carrying amount of these equity investments was $73 million and $85 million at September 30, 2021 and December 31, 2020, respectively. The Company has not recorded impairments or adjustments for observable price changes on these equity investments during the first nine months of 2021 and 2020, or on a cumulative basis.

(a) Primarily represents the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.

Changes in Fair Value for All Assets and Liabilities Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)

The following table presents the changes in fair value for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended September 30:

(Dollars in Millions)	Beginning of Period Balance		Net Gains (Losses) Included in Net Income			Net Gains (Losses) Included in Other Comprehensive Income (Loss)		Purchases		Sales			Principal Payments		Issuances			Settlements			End of Period Balance		Net Change in Unrealized Gains (Losses) Relating to Assets and Liabilities Held at End of Period
2021
Available-for-sale securities
Asset-backed securities	$	8	$	–		$	–	$	–	$	–		$	–	$	–		$	–		$	8	$	–
Obligations of state and political subdivisions		1		–			–		–		–			–		–			–			1		–
Total available-for-sale		9		–			–		–		–			–		–			–			9		–
Mortgage servicing rights		2,713		(96	) (a)		–		9		–			–		284	(c)		–			2,910		(96	) (a)
Net derivative assets and liabilities		1,500		(225	) (b)		–		106		(1	)		–		–			(262	)		1,118		(203	) (d)
2020
Available-for-sale securities
Asset-backed securities	$	7	$	–		$	–	$	–	$	–		$	–	$	–		$	–		$	7	$	–
Obligations of state and political subdivisions		1		–			–		–		–			–		–			–			1		–
Total available-for-sale		8		–			–		–		–			–		–			–			8		–
Mortgage servicing rights		1,840		(192	) (a)		–		8		1			–		321	(c)		–			1,978		(192	) (a)
Net derivative assets and liabilities		2,841		211	(e)		–		152		(1	)		–		–			(579	)		2,624		228	(f)

(a) Included in mortgage banking revenue.

(b) Approximately $208 million, $(434) million and $1 million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

(c) Represents MSRs capitalized during the period.

(d) Approximately $57 million, $(261) million and $1 million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

(e) Approximately $508 million, $(228) million and $(69) million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

(f) Approximately $291 million, $6 million and $(69) million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

The following table presents the changes in fair value for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months ended September 30:

(Dollars in Millions)	Beginning of Period Balance		Net Gains (Losses) Included in Net Income			Net Gains (Losses) Included in Other Comprehensive Income (Loss)		Purchases		Sales			Principal Payments			Issuances			Settlements			End of Period Balance		Net Change in Unrealized Gains (Losses) Relating to Assets and Liabilities Held at End of Period
2021
Available-for-sale securities
Asset-backed securities	$	7	$	–		$	1	$	–	$	–		$	–		$	–		$	–		$	8	$	1
Obligations of state and political subdivisions		1		–			–		–		–			–			–			–			1		–
Total available-for-sale		8		–			1		–		–			–			–			–			9		1
Mortgage servicing rights		2,210		(233	) (a)		–		36		1			–			896	(c)		–			2,910		(233	) (a)
Net derivative assets and liabilities		2,326		(604	) (b)		–		166		(2	)		–			–			(768	)		1,118		(761	) (d)
2020
Available-for-sale securities
Asset-backed securities	$	8	$	–		$	–	$	–	$	–		$	(1	)	$	–		$	–		$	7	$	–
Obligations of state and political subdivisions		1		–			–		–		–			–			–			–			1		–
Total available-for-sale		9		–			–		–		–			(1	)		–			–			8		–
Mortgage servicing rights		2,546		(1,299	) (a)		–		16		3			–			712	(c)		–			1,978		(1,299	) (a)
Net derivative assets and liabilities		810		2,685	(e)		–		247		(2	)		–			–			(1,116	)		2,624		1,888	(f)

(a) Included in mortgage banking revenue.

(b) Approximately $544 million, $(1.2) billion and $2 million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

(c) Represents MSRs capitalized during the period.

(d) Approximately $57 million, $(820) million and $2 million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

(e) Approximately $1.5 billion, $1.3 billion and $(70) million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

(f) Approximately $291 million, $1.7 billion and $(70) million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.

Adjusted Carrying Values for Assets Measured at Fair Value on Nonrecurring Basis

The following table summarizes the balances as of the measurement date of assets measured at fair value on a nonrecurring basis, and still held as of the reporting date:

	September 30, 2021								December 31, 2020
(Dollars in Millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Loans (a)	$	–	$	–	$	65	$	65	$	–	$	–	$	385	$	385
Other assets (b)		–		–		67		67		–		–		30		30

(a) Represents the carrying value of loans for which adjustments were based on the fair value of the collateral, excluding loans fully charged-off.

(b) Primarily represents the fair value of foreclosed properties that were measured at fair value based on an appraisal or broker price opinion of the collateral subsequent to their initial acquisition.

Losses Recognized Related to Nonrecurring Fair Value Measurements of Individual Assets or Portfolios

The following table summarizes losses recognized related to nonrecurring fair value measurements of individual assets or portfolios:

	Three Months Ended September 30				Nine Months Ended September 30
(Dollars in Millions)	2021		2020		2021		2020
Loans (a)	$	15	$	184	$	58	$	244
Other assets (b)		1		13		7		19

(a) Represents write-downs of loans which were based on the fair value of the collateral, excluding loans fully charged-off.

(b) Primarily represents related losses of foreclosed properties that were measured at fair value subsequent to their initial acquisition.

Differences Between Aggregate Fair Value Carrying Amount of MLHFS for which Fair Value Option has been Elected and Aggregate Unpaid Principal Amount Contractually Obligated to Receive at Maturity

The following table summarizes the differences between the aggregate fair value carrying amount of MLHFS for which the fair value option has been elected and the aggregate unpaid principal amount that the Company is contractually obligated to receive at maturity:

	September 30, 2021						December 31, 2020
(Dollars in Millions)	Fair Value Carrying Amount		Aggregate Unpaid Principal		Carrying Amount Over (Under) Unpaid Principal		Fair Value Carrying Amount		Aggregate Unpaid Principal		Carrying Amount Over (Under) Unpaid Principal
Total loans	$	6,176	$	6,017	$	159	$	8,524	$	8,136	$	388
Nonaccrual loans		1		1		–		1		1		–
Loans 90 days or more past due		1		1		–		2		2		–

Estimated Fair Values of Financial Instruments

The estimated fair values of the Company’s financial instruments are shown in the table below:

	September 30, 2021										December 31, 2020
	Carrying Amount		Fair Value								Carrying Amount		Fair Value
(Dollars in Millions)			Level 1		Level 2		Level 3		Total				Level 1		Level 2		Level 3		Total
Financial Assets
Cash and due from banks	$	63,904	$	63,904	$	–	$	–	$	63,904	$	62,580	$	62,580	$	–	$	–	$	62,580
Federal funds sold and securities purchased under resale agreements		440		–		440		–		440		377		–		377		–		377
Loans held for sale (a)		15		–		–		15		15		237		–		–		237		237
Loans		291,816		–		–		298,764		298,764		290,393		–		–		300,419		300,419
Other (b)		1,472		–		630		842		1,472		1,772		–		731		1,041		1,772
Financial Liabilities
Time deposits		22,879		–		22,946		–		22,946		30,694		–		30,864		–		30,864
Short-term borrowings (c)		13,990		–		13,894		–		13,894		10,009		–		9,956		–		9,956
Long-term debt		35,671		–		36,262		–		36,262		41,297		–		42,485		–		42,485
Other (d)		3,972		–		1,114		2,858		3,972		4,052		–		1,234		2,818		4,052

(a) Excludes mortgages held for sale for which the fair value option under applicable accounting guidance was elected.

(b) Includes investments in Federal Reserve Bank and Federal Home Loan Bank stock and tax-advantaged investments.

(c) Excludes the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.

(d) Includes operating lease liabilities and liabilities related to tax-advantaged investments.

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Guarantees and Contingent Liabilities (Tables)

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Summary of Other Guarantees and Contingent Liabilities

The following table is a summary of other guarantees and contingent liabilities of the Company at September 30, 2021:

(Dollars in Millions)	Collateral Held		Carrying Amount		Maximum Potential Future Payments
Standby letters of credit	$	–	$	60	$	9,556
Third party borrowing arrangements		–		–		4
Securities lending indemnifications		10,479		–		10,157
Asset sales		–		84		6,793	(a)
Merchant processing		827		172		121,902
Tender option bond program guarantee		1,719		–		1,490
Other		–		22		1,532

(a) The maximum potential future payments do not include loan sales where the Company provides standard representation and warranties to the buyer against losses related to loan underwriting documentation defects that may have existed at the time of sale that generally are identified after the occurrence of a triggering event such as delinquency. For these types of loan sales, the maximum potential future payments is generally the unpaid principal balance of loans sold measured at the end of the current reporting period. Actual losses will be significantly less than the maximum exposure, as only a fraction of loans sold will have a representation and warranty breach, and any losses on repurchase would generally be mitigated by any collateral held against the loans.

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Business Segments (Tables)

9 Months Ended

Sep. 30, 2021

Text Block [Abstract]

Business Segments Reporting Information Details

Business segment results for the three months ended September 30 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)	$	717		$	852		$	1,551		$	1,474		$	225		$	301
Noninterest income		253			267			715			848			558			505
Total net revenue		970			1,119			2,266			2,322			783			806
Noninterest expense		418			428			1,450			1,383			507			489
Other intangibles		–			–			3			4			4			3
Total noninterest expense		418			428			1,453			1,387			511			492
Income (loss) before provision and income taxes		552			691			813			935			272			314
Provision for credit losses		15			95			(25	)		69			11			11
Income (loss) before income taxes		537			596			838			866			261			303
Income taxes and taxable-equivalent adjustment		134			149			210			217			65			76
Net income (loss)		403			447			628			649			196			227
Net (income) loss attributable to noncontrolling interests		–			–			–			–			–			–
Net income (loss) attributable to U.S. Bancorp	$	403		$	447		$	628		$	649		$	196		$	227
Average Balance Sheet
Loans	$	102,431		$	115,547		$	140,833		$	145,229		$	18,454		$	15,616
Other earning assets		4,722			4,110			7,645			8,195			225			288
Goodwill		1,650			1,647			3,506			3,475			1,618			1,618
Other intangible assets		5			6			2,754			1,942			80			37
Assets		114,629			128,369			160,882			164,246			21,566			18,708
Noninterest-bearing deposits		62,642			48,058			34,416			34,288			24,453			17,719
Interest-bearing deposits		68,917			87,558			160,271			133,095			71,841			73,857
Total deposits		131,559			135,616			194,687			167,383			96,294			91,576
Total U.S. Bancorp shareholders’ equity		13,772			15,051			12,277			13,562			3,172			2,968
	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)	$	616		$	643		$	88		$	(18	)	$	3,197		$	3,252
Noninterest income		946	(a)		867	(a)		221			225			2,693	(b)		2,712	(b)
Total net revenue		1,562			1,510			309			207			5,890	(c)		5,964	(c)
Noninterest expense		817			797			196			230			3,388			3,327
Other intangibles		34			37			–			–			41			44
Total noninterest expense		851			834			196			230			3,429			3,371
Income (loss) before provision and income taxes		711			676			113			(23	)		2,461			2,593
Provision for credit losses		166			246			(330	)		214			(163	)		635
Income (loss) before income taxes		545			430			443			(237	)		2,624			1,958
Income taxes and taxable-equivalent adjustment		136			108			45			(178	)		590			372
Net income (loss)		409			322			398			(59	)		2,034			1,586
Net (income) loss attributable to noncontrolling interests		–			–			(6	)		(6	)		(6	)		(6	)
Net income (loss) attributable to U.S. Bancorp	$	409		$	322		$	392		$	(65	)	$	2,028		$	1,580
Average Balance Sheet
Loans	$	31,378		$	31,168		$	3,643		$	3,458		$	296,739		$	311,018
Other earning assets		5			5			193,989			162,488			206,586			175,086
Goodwill		3,168			3,123			–			–			9,942			9,863
Other intangible assets		496			602			–			–			3,335			2,587
Assets		37,173			36,191			219,196			189,388			553,446			536,902
Noninterest-bearing deposits		4,913			6,886			2,594			2,424			129,018			109,375
Interest-bearing deposits		150			124			1,290			1,514			302,469			296,148
Total deposits		5,063			7,010			3,884			3,938			431,487			405,523
Total U.S. Bancorp shareholders’ equity		7,561			7,716			17,491			13,119			54,273			52,416

(a) Presented net of related rewards and rebate costs and certain partner payments of $652 million and $525 million for the three months ended September 30, 2021 and 2020, respectively.

(b) Includes revenue generated from certain contracts with customers of $2.0 billion and $1.8 billion for the three months ended September 30, 2021 and 2020, respectively.

(c) The Company, as a lessor, originates retail and commercial leases either directly to the consumer or indirectly through dealer networks. Under these arrangments, the Company recorded $220 million and $246 million of revenue for the three months ended September 30, 2021 and 2020, respectively, primarily consisting of interest income on sales-type and direct financing leases.

Business segment results for the nine months ended September 30 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)	$	2,172		$	2,623		$	4,603		$	4,239		$	721		$	964
Noninterest income		786			899			1,918			2,433			1,638			1,507
Total net revenue		2,958			3,522			6,521			6,672			2,359			2,471
Noninterest expense		1,257			1,310			4,210			4,061			1,499			1,445
Other intangibles		–			–			9			12			10			9
Total noninterest expense		1,257			1,310			4,219			4,073			1,509			1,454
Income (loss) before provision and income taxes		1,701			2,212			2,302			2,599			850			1,017
Provision for credit losses		(20	)		572			(143	)		269			26			34
Income (loss) before income taxes		1,721			1,640			2,445			2,330			824			983
Income taxes and taxable-equivalent adjustment		430			410			612			583			206			246
Net income (loss)		1,291			1,230			1,833			1,747			618			737
Net (income) loss attributable to noncontrolling interests		–			–			–			–			–			–
Net income (loss) attributable to U.S. Bancorp	$	1,291		$	1,230		$	1,833		$	1,747		$	618		$	737
Average Balance Sheet
Loans	$	102,117		$	118,686		$	141,220		$	139,981		$	17,584		$	15,151
Other earning assets		4,485			4,170			8,606			6,578			247			285
Goodwill		1,648			1,647			3,485			3,508			1,618			1,617
Other intangible assets		5			6			2,692			2,095			69			40
Assets		114,182			131,106			162,316			157,177			20,676			18,324
Noninterest-bearing deposits		59,841			41,091			33,734			29,397			23,024			16,285
Interest-bearing deposits		69,999			90,581			156,821			126,934			76,098			76,736
Total deposits		129,840			131,672			190,555			156,331			99,122			93,021
Total U.S. Bancorp shareholders’ equity		13,995			15,201			12,378			12,797			3,099			2,924
	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)	$	1,841		$	1,910		$	113		$	(13	)	$	9,450		$	9,723
Noninterest income		2,644	(a)		2,319	(a)		707			693			7,693	(b)		7,851	(b)
Total net revenue		4,485			4,229			820			680			17,143	(c)		17,574	(c)
Noninterest expense		2,381			2,296			729			764			10,076			9,876
Other intangibles		100			108			–			–			119			129
Total noninterest expense		2,481			2,404			729			764			10,195			10,005
Income (loss) before provision and income taxes		2,004			1,825			91			(84	)		6,948			7,569
Provision for credit losses		216			477			(1,239	)		2,013			(1,160	)		3,365
Income (loss) before income taxes		1,788			1,348			1,330			(2,097	)		8,108			4,204
Income taxes and taxable-equivalent adjustment		447			338			106			(833	)		1,801			744
Net income (loss)		1,341			1,010			1,224			(1,264	)		6,307			3,460
Net (income) loss attributable to noncontrolling interests		–			–			(17	)		(20	)		(17	)		(20	)
Net income (loss) attributable to U.S. Bancorp	$	1,341		$	1,010		$	1,207		$	(1,284	)	$	6,290		$	3,440
Average Balance Sheet
Loans	$	30,353		$	31,725		$	3,740		$	3,392		$	295,014		$	308,935
Other earning assets		5			5			192,259			156,045			205,602			167,083
Goodwill		3,174			3,027			–			–			9,925			9,799
Other intangible assets		519			584			–			–			3,285			2,725
Assets		35,972			36,497			218,053			182,276			551,199			525,380
Noninterest-bearing deposits		5,068			3,852			2,595			2,310			124,262			92,935
Interest-bearing deposits		141			119			1,718			3,293			304,777			297,663
Total deposits		5,209			3,971			4,313			5,603			429,039			390,598
Total U.S. Bancorp shareholders’ equity		7,544			7,269			16,311			13,745			53,327			51,936

(a) Presented net of related rewards and rebate costs and certain partner payments of $1.8 billion and $1.5 billion for the nine months ended September 30, 2021 and 2020, respectively.

(b) Includes revenue generated from certain contracts with customers of $5.6 billion and $5.1 billion for the nine months ended September 30, 2021 and 2020, respectively.

(c) The Company, as a lessor, originates retail and commercial leases either directly to the consumer or indirectly through dealer networks. Under these arrangments, the Company recorded $686 million and $714 million of revenue for the nine months ended September 30, 2021 and 2020, respectively, primarily consisting of interest income on sales-type and direct financing leases.

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Business Combinations - Additional Information (Detail) - MUFG Union Bank [Member] - Forecast [Member] $ in Billions	6 Months Ended
	Jun. 30, 2022 USD ($) Branches shares
Business Acquisition [Line Items]
Business combination, Consideration transferred	$ 8.0
Payments to acquire businesses, gross	$ 5.5
Business acquisition, Percentage of voting interests acquired	2.90%
Business combination, Recognized identifiable assets acquired and liabilities assumed, Assets	$ 105.0
Business combination, Recognized identifiable assets acquired and liabilities assumed, Financial liabilities	58.0
Business combination, Recognized identifiable assets acquired and liabilities assumed, Deposits	$ 90.0
Number of branches acquired | Branches	300
Common Stock [Member]
Business Acquisition [Line Items]
Business acquisition, Equity interest issued or issuable, Number of shares | shares	44,000,000

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Investment Securities - Available-for-Sale (Detail) - USD ($) $ in Millions		Sep. 30, 2021		Dec. 31, 2020
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost		$ 149,238	[1]	$ 133,611
Available-for-sale securities, Unrealized Gains		1,868		3,282
Available-for-sale securities, Unrealized Losses		(1,730)		(53)
Available-for-sale securities, Fair Value	[2]	149,376	[1]	136,840
U.S. Treasury and Agencies [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost		18,460		21,954
Available-for-sale securities, Unrealized Gains		230		462
Available-for-sale securities, Unrealized Losses		(199)		(25)
Available-for-sale securities, Fair Value		18,491		22,391
Residential Mortgage-Backed Securities [Member] | Agency [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost		113,137		98,031
Available-for-sale securities, Unrealized Gains		996		1,950
Available-for-sale securities, Unrealized Losses		(1,337)		(13)
Available-for-sale securities, Fair Value		112,796		99,968
Commercial [Member] | Agency [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost		7,750		5,251
Available-for-sale securities, Unrealized Gains		77		170
Available-for-sale securities, Unrealized Losses		(141)		(15)
Available-for-sale securities, Fair Value		7,686		5,406
Asset-Backed Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost		64	[3]	200
Available-for-sale securities, Unrealized Gains		5		5
Available-for-sale securities, Fair Value		69	[3]	205
Obligations of State and Political Subdivisions [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost		9,820	[4],[5]	8,166
Available-for-sale securities, Unrealized Gains		560		695
Available-for-sale securities, Unrealized Losses		(53)
Available-for-sale securities, Fair Value		10,327	[4],[5]	8,861
Other [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost		7		9
Available-for-sale securities, Fair Value		$ 7		$ 9

[1] The weighted-average maturity of total available-for-sale investment securities was 3.4 years at December 31, 2020, with a corresponding weighted-average yield of 1.61 percent.

[2] Includes only collateral pledged by the Company where counterparties have the right to sell or pledge the collateral.

[3] Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities that take into account anticipated future prepayments.

[4] Information related to obligations of state and political subdivisions is presented based upon yield to first optional call date if the security is purchased at a premium, and yield to maturity if the security is purchased at par or a discount.

[5] Maturity calculations for obligations of state and political subdivisions are based on the first optional call date for securities with a fair value above par and the contractual maturity date for securities with a fair value equal to or below par.

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Investment Securities - Amount of Interest Income from Taxable and Non-Taxable Investment Securities (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Interest Income, Securities, Operating, by Taxable Status [Abstract]
Taxable	$ 539	$ 528	$ 1,548	$ 1,741
Non-taxable	67	58	193	167
Total interest income from investment securities	$ 606	$ 586	$ 1,741	$ 1,908

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Investment Securities - Amount of Gross Gains and Losses Realized through Sales of Available-for-Sale Investment Securities (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Debt Securities, Available-for-sale, Realized Gain (Loss) [Abstract]
Realized gains	$ 39	$ 12	$ 107	$ 166
Realized losses	(19)		(19)	(23)
Net realized gains	20	12	88	143
Income tax on net realized gains	$ 5	$ 3	$ 22	$ 36

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Investment Securities - Additional Information (Detail) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Investments, Debt and Equity Securities [Abstract]
Fair value of securities pledged	$ 31,700	$ 11,000
Fair value of securities pledged as collateral where counterparty has right to repledge or resell	$ 850	$ 402

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Investment Securities - Gross Unrealized Losses and Fair Value of Company's Investment Securities (Detail) $ in Millions	Sep. 30, 2021 USD ($)
Continuous Gross Unrealized Losses And Fair Value [Abstract]
Fair Value Less Than 12 Months	$ 78,900
Unrealized Losses Less Than 12 Months	(1,632)
Fair Value 12 Months or Greater	2,479
Unrealized Losses 12 Months or Greater	(98)
Fair Value Total	81,379
Unrealized Losses Total	(1,730)
U.S. Treasury and Agencies [Member]
Continuous Gross Unrealized Losses And Fair Value [Abstract]
Fair Value Less Than 12 Months	6,023
Unrealized Losses Less Than 12 Months	(163)
Fair Value 12 Months or Greater	980
Unrealized Losses 12 Months or Greater	(36)
Fair Value Total	7,003
Unrealized Losses Total	(199)
Residential Mortgage-Backed Securities [Member]
Continuous Gross Unrealized Losses And Fair Value [Abstract]
Fair Value Less Than 12 Months	66,781
Unrealized Losses Less Than 12 Months	(1,328)
Fair Value 12 Months or Greater	375
Unrealized Losses 12 Months or Greater	(9)
Fair Value Total	67,156
Unrealized Losses Total	(1,337)
Commercial Mortgage Backed Securities [Member]
Continuous Gross Unrealized Losses And Fair Value [Abstract]
Fair Value Less Than 12 Months	3,947
Unrealized Losses Less Than 12 Months	(88)
Fair Value 12 Months or Greater	1,122
Unrealized Losses 12 Months or Greater	(53)
Fair Value Total	5,069
Unrealized Losses Total	(141)
Asset-backed Securities [member]
Continuous Gross Unrealized Losses And Fair Value [Abstract]
Fair Value 12 Months or Greater	2
Fair Value Total	2
Obligations of State and Political Subdivisions [Member]
Continuous Gross Unrealized Losses And Fair Value [Abstract]
Fair Value Less Than 12 Months	2,145
Unrealized Losses Less Than 12 Months	(53)
Fair Value Total	2,145
Unrealized Losses Total	(53)
Other [Member]
Continuous Gross Unrealized Losses And Fair Value [Abstract]
Fair Value Less Than 12 Months	4
Fair Value Total	$ 4

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Investment Securities - Amortized Cost, Fair Value and Yield by Maturity Date (Detail) - USD ($) $ in Millions		9 Months Ended		12 Months Ended
		Sep. 30, 2021		Dec. 31, 2020
Contractual Maturities of Investment Securities [Line Items]
Available-for-sale securities, Amortized Cost		$ 149,238	[1]	$ 133,611
Available-for-sale securities, total, fair value	[2]	$ 149,376	[1]	$ 136,840
Available-for-sale securities, total, weighted-average maturity in years		5 years 3 months 18 days	[1]	3 years 4 months 24 days
Available-for-sale securities, total, weighted-average yield		1.69%	[1],[3]	1.61%
U.S. Treasury and Agencies [Member]
Contractual Maturities of Investment Securities [Line Items]
Available-for-sale securities, maturing in one year or less, amortized cost		$ 2,873
Available-for-sale securities, maturing after one year through five years, amortized cost		6,835
Available-for-sale securities, maturing after five years through ten years, amortized cost		7,146
Available-for-sale securities, maturing after ten years, amortized cost		1,606
Available-for-sale securities, Amortized Cost		18,460		$ 21,954
Available-for-sale securities, maturing in one year or less, fair value		2,894
Available-for-sale securities, maturing after one year through five years, fair value		6,977
Available-for-sale securities, maturing after five years through ten years, fair value		7,041
Available-for-sale securities, maturing after ten years, fair value		1,579
Available-for-sale securities, total, fair value		$ 18,491		22,391
Available-for-sale securities, maturing in one year or less, weighted-average maturity in years		6 months
Available-for-sale securities, maturing after one year through five years, weighted-average maturity in years		2 years 4 months 24 days
Available-for-sale securities, maturing after five years through ten years, weighted-average maturity in years		7 years 10 months 24 days
Available-for-sale securities, maturing after ten years, weighted- average maturity in years		12 years 7 months 6 days
Available-for-sale securities, total, weighted-average maturity in years		5 years 1 month 6 days
Available-for-sale securities, maturing in one year or less, weighted-average yield	[3]	1.87%
Available-for-sale securities, maturing after one year through five years, weighted-average yield	[3]	1.61%
Available-for-sale securities, maturing after five years through ten years, weighted-average yield	[3]	1.33%
Available-for-sale securities, maturing after ten years, weighted-average yield	[3]	1.91%
Available-for-sale securities, total, weighted-average yield	[3]	1.57%
Mortgage-Backed Securities [Member]
Contractual Maturities of Investment Securities [Line Items]
Available-for-sale securities, maturing in one year or less, amortized cost	[4]	$ 140
Available-for-sale securities, maturing after one year through five years, amortized cost	[4]	54,361
Available-for-sale securities, maturing after five years through ten years, amortized cost	[4]	66,370
Available-for-sale securities, maturing after ten years, amortized cost	[4]	16
Available-for-sale securities, Amortized Cost	[4]	120,887
Available-for-sale securities, maturing in one year or less, fair value	[4]	138
Available-for-sale securities, maturing after one year through five years, fair value	[4]	55,259
Available-for-sale securities, maturing after five years through ten years, fair value	[4]	65,068
Available-for-sale securities, maturing after ten years, fair value	[4]	17
Available-for-sale securities, total, fair value	[4]	$ 120,482
Available-for-sale securities, maturing in one year or less, weighted-average maturity in years	[4]	6 months
Available-for-sale securities, maturing after one year through five years, weighted-average maturity in years	[4]	3 years 4 months 24 days
Available-for-sale securities, maturing after five years through ten years, weighted-average maturity in years	[4]	6 years 6 months
Available-for-sale securities, maturing after ten years, weighted- average maturity in years	[4]	12 years 2 months 12 days
Available-for-sale securities, total, weighted-average maturity in years	[4]	5 years 1 month 6 days
Available-for-sale securities, maturing in one year or less, weighted-average yield	[3],[4]	1.70%
Available-for-sale securities, maturing after one year through five years, weighted-average yield	[3],[4]	1.57%
Available-for-sale securities, maturing after five years through ten years, weighted-average yield	[3],[4]	1.53%
Available-for-sale securities, maturing after ten years, weighted-average yield	[3],[4]	1.27%
Available-for-sale securities, total, weighted-average yield	[3],[4]	1.55%
Asset-Backed Securities [Member]
Contractual Maturities of Investment Securities [Line Items]
Available-for-sale securities, maturing after one year through five years, amortized cost	[4]	$ 63
Available-for-sale securities, maturing after five years through ten years, amortized cost	[4]	1
Available-for-sale securities, Amortized Cost		64	[4]	200
Available-for-sale securities, maturing after one year through five years, fair value	[4]	66
Available-for-sale securities, maturing after five years through ten years, fair value	[4]	2
Available-for-sale securities, maturing after ten years, fair value	[4]	1
Available-for-sale securities, total, fair value		$ 69	[4]	205
Available-for-sale securities, maturing in one year or less, weighted-average maturity in years	[4]	7 months 6 days
Available-for-sale securities, maturing after one year through five years, weighted-average maturity in years	[4]	3 years 9 months 18 days
Available-for-sale securities, maturing after five years through ten years, weighted-average maturity in years	[4]	6 years 2 months 12 days
Available-for-sale securities, maturing after ten years, weighted- average maturity in years	[4]	12 years 10 months 24 days
Available-for-sale securities, total, weighted-average maturity in years	[4]	3 years 9 months 18 days
Available-for-sale securities, maturing in one year or less, weighted-average yield	[3],[4]	2.69%
Available-for-sale securities, maturing after one year through five years, weighted-average yield	[3],[4]	1.50%
Available-for-sale securities, maturing after five years through ten years, weighted-average yield	[3],[4]	2.58%
Available-for-sale securities, maturing after ten years, weighted-average yield	[3],[4]	2.41%
Available-for-sale securities, total, weighted-average yield	[3],[4]	1.51%
Obligations of State and Political Subdivisions [Member]
Contractual Maturities of Investment Securities [Line Items]
Available-for-sale securities, maturing in one year or less, amortized cost	[5],[6]	$ 349
Available-for-sale securities, maturing after one year through five years, amortized cost	[5],[6]	2,492
Available-for-sale securities, maturing after five years through ten years, amortized cost	[5],[6]	5,595
Available-for-sale securities, maturing after ten years, amortized cost	[5],[6]	1,384
Available-for-sale securities, Amortized Cost		9,820	[5],[6]	8,166
Available-for-sale securities, maturing in one year or less, fair value	[5],[6]	355
Available-for-sale securities, maturing after one year through five years, fair value	[5],[6]	2,663
Available-for-sale securities, maturing after five years through ten years, fair value	[5],[6]	5,964
Available-for-sale securities, maturing after ten years, fair value	[5],[6]	1,345
Available-for-sale securities, total, fair value		$ 10,327	[5],[6]	8,861
Available-for-sale securities, maturing in one year or less, weighted-average maturity in years	[4]	7 months 6 days
Available-for-sale securities, maturing after one year through five years, weighted-average maturity in years	[5],[6]	4 years 1 month 6 days
Available-for-sale securities, maturing after five years through ten years, weighted-average maturity in years	[5],[6]	6 years 10 months 24 days
Available-for-sale securities, maturing after ten years, weighted- average maturity in years	[5],[6]	17 years 4 months 24 days
Available-for-sale securities, total, weighted-average maturity in years	[5],[6]	7 years 4 months 24 days
Available-for-sale securities, maturing in one year or less, weighted-average yield	[3],[5],[6]	4.28%
Available-for-sale securities, maturing after one year through five years, weighted-average yield	[3],[5],[6]	4.24%
Available-for-sale securities, maturing after five years through ten years, weighted-average yield	[3],[5],[6]	3.73%
Available-for-sale securities, maturing after ten years, weighted-average yield	[3],[5],[6]	2.50%
Available-for-sale securities, total, weighted-average yield	[3],[5],[6]	3.71%
Other [Member]
Contractual Maturities of Investment Securities [Line Items]
Available-for-sale securities, maturing after one year through five years, amortized cost		$ 7
Available-for-sale securities, Amortized Cost		7		9
Available-for-sale securities, maturing after one year through five years, fair value		7
Available-for-sale securities, total, fair value		$ 7		$ 9
Available-for-sale securities, maturing after one year through five years, weighted-average maturity in years		3 years 8 months 12 days
Available-for-sale securities, total, weighted-average maturity in years		3 years 8 months 12 days
Available-for-sale securities, maturing after one year through five years, weighted-average yield	[3]	2.07%
Available-for-sale securities, total, weighted-average yield	[3]	2.07%

[1] The weighted-average maturity of total available-for-sale investment securities was 3.4 years at December 31, 2020, with a corresponding weighted-average yield of 1.61 percent.

[2] Includes only collateral pledged by the Company where counterparties have the right to sell or pledge the collateral.

[3] Weighted-average yields for obligations of state and political subdivisions are presented on a fully-taxable equivalent basis based on a federal income tax rate of 21 percent. Yields on investment securities are computed based on amortized cost balances.

[4] Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities that take into account anticipated future prepayments.

[5] Information related to obligations of state and political subdivisions is presented based upon yield to first optional call date if the security is purchased at a premium, and yield to maturity if the security is purchased at par or a discount.

[6] Maturity calculations for obligations of state and political subdivisions are based on the first optional call date for securities with a fair value above par and the contractual maturity date for securities with a fair value equal to or below par.

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Investment Securities - Amortized Cost, Fair Value and Yield by Maturity Date (Parenthetical) (Detail)	9 Months Ended		12 Months Ended
	Sep. 30, 2021		Dec. 31, 2020
Contractual Maturities of Investment Securities [Abstract]
Federal statutory rate	21.00%
Available for sale securities weighted average maturities	5 years 3 months 18 days	[1]	3 years 4 months 24 days
Debt securities available for sale weighted average yield	1.69%	[1],[2]	1.61%

[1] The weighted-average maturity of total available-for-sale investment securities was 3.4 years at December 31, 2020, with a corresponding weighted-average yield of 1.61 percent.

[2] Weighted-average yields for obligations of state and political subdivisions are presented on a fully-taxable equivalent basis based on a federal income tax rate of 21 percent. Yields on investment securities are computed based on amortized cost balances.

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Loans and Allowance for Credit Losses - Composition of Loan Portfolio (Detail) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 297,608	$ 297,707
Loans, percentage	100.00%	100.00%
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 95,876	$ 97,315
Loans, percentage	32.20%	32.70%
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 101,013	$ 102,871
Loans, percentage	34.00%	34.60%
Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 38,808	$ 39,311
Loans, percentage	13.00%	13.20%
Residential Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 74,954	$ 76,155
Loans, percentage	25.20%	25.60%
Other Retail [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 60,696	$ 57,024
Loans, percentage	20.40%	19.10%
Lease Financing [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 5,137	$ 5,556
Loans, percentage	1.80%	1.90%
Commercial Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 28,029	$ 28,472
Loans, percentage	9.40%	9.60%
Construction and Development [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 10,779	$ 10,839
Loans, percentage	3.60%	3.60%
Residential Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 65,941	$ 66,525
Loans, percentage	22.20%	22.40%
Home Equity Loans, First Liens [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 9,013	$ 9,630
Loans, percentage	3.00%	3.20%
Credit Card [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 22,137	$ 22,346
Loans, percentage	7.40%	7.50%
Retail Leasing [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 7,505	$ 8,150
Loans, percentage	2.50%	2.70%
Home Equity and Second Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 10,718	$ 12,472
Loans, percentage	3.60%	4.20%
Revolving Credit [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 2,682	$ 2,688
Loans, percentage	0.90%	0.90%
Installment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 16,166	$ 13,823
Loans, percentage	5.50%	4.60%
Automobile [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 23,488	$ 19,722
Loans, percentage	7.90%	6.60%
Student [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 137	$ 169
Loans, percentage		0.10%

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Loans and Allowance for Credit Losses - Additional Information (Detail) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2021 USD ($) MortgageLoan	Sep. 30, 2021 USD ($) SecurityLoan MortgageLoan	Dec. 31, 2020 USD ($)
Loans and Allowance for Credit Losses [Line Items]
Loans pledged at the Federal Home Loan Bank	$ 89,800	$ 89,800	$ 96,100
Loans pledged at the Federal Reserve Bank	73,100	73,100	67,800
Unearned interest and deferred fees and costs on originated loans	567	567	763
Foreclosed residential real estate property included in other real estate owned	17	17	23
Foreclosed residential real estate related to mortgage loans whose payments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs	19	19	33
Residential mortgage loans secured by residential real estate in process of foreclosure	$ 778	$ 778	1,000
Number of residential mortgage loans, home equity and second mortgage loans, and GNMA loans where trial period was unsuccessful and no longer eligible for a permanent modification | MortgageLoan	10	45
Outstanding balance of residential mortgage loans, home equity and second mortgage loans, and GNMA loans where trial period was unsuccessful and no longer eligible for a permanent modification	$ 1	$ 7
Commitments to lend additional funds	158	158
Modifications related to borrowers impacted by COVID	3,000	3,000	10,100
Allowance for individually evaluated loans		5
Government National Mortgage Association [Member]
Loans and Allowance for Credit Losses [Line Items]
Residential mortgage loans secured by residential real estate in process of foreclosure	$ 620	$ 620	$ 812
Home Equity and Second Mortgages [Member]
Loans and Allowance for Credit Losses [Line Items]
Number of loans in trial period | SecurityLoan		2
Outstanding balance of loans in trial period		$ 1
Estimated post-modification balance of loans in trial period		$ 1
Residential Mortgages [Member]
Loans and Allowance for Credit Losses [Line Items]
Number of loans in trial period | SecurityLoan		5
Outstanding balance of loans in trial period		$ 1
Estimated post-modification balance of loans in trial period		$ 1
Government National Mortgage Association [Member]
Loans and Allowance for Credit Losses [Line Items]
Number of loans in trial period | SecurityLoan		43
Outstanding balance of loans in trial period		$ 5
Estimated post-modification balance of loans in trial period		$ 5

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Loans and Allowance for Credit Losses - Activity in Allowance for Credit Losses by Portfolio Class (Detail) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period		$ 6,610	$ 7,890	$ 8,010	$ 4,491
Change in accounting principle	[1]				1,499
Provision for credit losses		(163)	635	(1,160)	3,365
Loans charged-off		266	611	954	1,624
Less recoveries of loans charged-off		(119)	(96)	(404)	(279)
Net loan charge-offs (recoveries)		147	515	550	1,345
Balance at end of period		6,300	8,010	6,300	8,010
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period		1,838	2,645	2,423	1,484
Change in accounting principle	[1]				378
Provision for credit losses		(75)	20	(577)	988
Loans charged-off		40	193	184	406
Less recoveries of loans charged-off		(26)	(15)	(87)	(43)
Net loan charge-offs (recoveries)		14	178	97	363
Balance at end of period		1,749	2,487	1,749	2,487
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period		1,409	1,269	1,544	799
Change in accounting principle	[1]				(122)
Provision for credit losses		(104)	263	(246)	875
Loans charged-off		14	89	28	112
Less recoveries of loans charged-off		(1)	(6)	(22)	(9)
Net loan charge-offs (recoveries)		13	83	6	103
Balance at end of period		1,292	1,449	1,292	1,449
Residential Mortgages [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period		478	633	573	433
Change in accounting principle	[1]				(30)
Provision for credit losses		3	(49)	(107)	179
Loans charged-off		3	4	13	15
Less recoveries of loans charged-off		(13)	(7)	(38)	(20)
Net loan charge-offs (recoveries)		(10)	(3)	(25)	(5)
Balance at end of period		491	587	491	587
Other Retail [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period		994	1,187	1,115	647
Change in accounting principle	[1]				401
Provision for credit losses		36	32	(35)	335
Loans charged-off		55	89	193	316
Less recoveries of loans charged-off		(36)	(33)	(124)	(96)
Net loan charge-offs (recoveries)		19	56	69	220
Balance at end of period		1,011	1,163	1,011	1,163
Credit Card [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period		1,891	2,156	2,355	1,128
Change in accounting principle	[1]				872
Provision for credit losses		(23)	369	(195)	988
Loans charged-off		154	236	536	775
Less recoveries of loans charged-off		(43)	(35)	(133)	(111)
Net loan charge-offs (recoveries)		111	201	403	664
Balance at end of period		$ 1,757	$ 2,324	$ 1,757	$ 2,324

[1] Effective January 1, 2020, the Company adopted accounting guidance which changed impairment recognition of financial instruments to a model that is based on expected losses rather than incurred losses. Upon adoption, the Company increased its allowance for credit losses and reduced retained earnings net of deferred tax liabilities through a cumulative-effect adjustment.

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Loans and Allowance for Credit Losses - Summary of Loans by Portfolio Class, Including Delinquency Status of those that Continue to Accrue Interest and are Nonperforming (Detail) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	$ 297,608	$ 297,707
Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	295,535	294,716
Accruing 30-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	782	1,290
Accruing 90 Days or More Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	385	477
Nonperforming [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	906	1,224
Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	101,013	102,871
Commercial [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	100,595	102,127
Commercial [Member] | Accruing 30-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	163	314
Commercial [Member] | Accruing 90 Days or More Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	39	55
Commercial [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	216	375
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	38,808	39,311
Commercial Real Estate [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	38,459	38,676
Commercial Real Estate [Member] | Accruing 30-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	32	183
Commercial Real Estate [Member] | Accruing 90 Days or More Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	21	2
Commercial Real Estate [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	296	450
Residential Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	74,954	76,155
Residential Mortgages [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	74,450	75,529
Residential Mortgages [Member] | Accruing 30-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	153	244
Residential Mortgages [Member] | Accruing 90 Days or More Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	114	137
Residential Mortgages [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	237	245
Other Retail [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	60,696	57,024
Other Retail [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	60,224	56,466
Other Retail [Member] | Accruing 30-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	251	318
Other Retail [Member] | Accruing 90 Days or More Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	64	86
Other Retail [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	157	154
Credit Card [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	22,137	22,346
Credit Card [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	21,807	21,918
Credit Card [Member] | Accruing 30-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	183	231
Credit Card [Member] | Accruing 90 Days or More Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	$ 147	$ 197

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Loans and Allowance for Credit Losses - Summary of Loans by Portfolio Class, Including Delinquency Status of those that Continue to Accrue Interest and are Nonperforming (Parenthetical) (Detail) - Government National Mortgage Association [Member] - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans 30-89 days past due purchased from Government National Mortgage Association mortgage pools, classified as current	$ 946		$ 946		$ 1,400
Loans 90 days or more past due purchased from Government National Mortgage Association mortgage pools, classified as current	1,500		1,500		$ 1,800
Interest income on nonperforming loans	$ 4	$ 9	$ 11	$ 19

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Loans and Allowance for Credit Losses - Summary of Loans by Portfolio Class and Company's Internal Credit Quality Rating (Detail) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 297,608	$ 297,707
Total outstanding commitments	656,903	645,752
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	291,033	285,957
Total outstanding commitments	645,955	627,606
Special Mention Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	2,318	4,278
Total outstanding commitments	4,606	8,772
Classified Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	4,257	7,472
Total outstanding commitments	6,342	9,374
Total Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	6,575	11,750
Total outstanding commitments	10,948	18,146
Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Originated in 2021	33,449
Originated in 2020	18,091	37,645
Originated in 2019	12,112	18,485
Originated in 2018	6,981	12,876
Originated in 2017	3,280	5,644
Originated prior to 2017	3,443	5,197
Revolving	23,657	23,024
Total loans	101,013	102,871
Commercial [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Originated in 2021	32,826
Originated in 2020	17,202	34,557
Originated in 2019	11,851	17,867
Originated in 2018	6,853	12,349
Originated in 2017	3,213	5,257
Originated prior to 2017	3,373	4,954
Revolving	23,204	22,445
Total loans	98,522	97,429
Commercial [Member] | Special Mention Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Originated in 2021	346
Originated in 2020	637	1,335
Originated in 2019	198	269
Originated in 2018	77	351
Originated in 2017	14	117
Originated prior to 2017	30	128
Revolving	353	299
Total loans	1,655	2,499
Commercial [Member] | Classified Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Originated in 2021	277
Originated in 2020	252	1,753
Originated in 2019	63	349
Originated in 2018	51	176
Originated in 2017	53	270
Originated prior to 2017	40	115
Revolving	100	280
Total loans	836	2,943
Commercial [Member] | Total Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Originated in 2021	623
Originated in 2020	889	3,088
Originated in 2019	261	618
Originated in 2018	128	527
Originated in 2017	67	387
Originated prior to 2017	70	243
Revolving	453	579
Total loans	2,491	5,442
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Originated in 2021	10,278
Originated in 2020	8,792	11,044
Originated in 2019	8,374	10,973
Originated in 2018	4,134	7,103
Originated in 2017	2,118	3,188
Originated prior to 2017	3,368	5,311
Revolving	1,744	1,692
Total loans	38,808	39,311
Commercial Real Estate [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Originated in 2021	9,456
Originated in 2020	8,238	9,446
Originated in 2019	7,382	9,514
Originated in 2018	3,662	6,053
Originated in 2017	1,943	2,650
Originated prior to 2017	3,239	4,762
Revolving	1,556	1,445
Total loans	35,476	33,870
Commercial Real Estate [Member] | Special Mention Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Originated in 2021	50
Originated in 2020	119	461
Originated in 2019	298	454
Originated in 2018	142	411
Originated in 2017	25	198
Originated prior to 2017	26	240
Revolving	1	9
Total loans	661	1,773
Commercial Real Estate [Member] | Classified Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Originated in 2021	772
Originated in 2020	435	1,137
Originated in 2019	694	1,005
Originated in 2018	330	639
Originated in 2017	150	340
Originated prior to 2017	103	309
Revolving	187	238
Total loans	2,671	3,668
Commercial Real Estate [Member] | Total Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Originated in 2021	822
Originated in 2020	554	1,598
Originated in 2019	992	1,459
Originated in 2018	472	1,050
Originated in 2017	175	538
Originated prior to 2017	129	549
Revolving	188	247
Total loans	3,332	5,441
Residential Mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Originated in 2021	21,045
Originated in 2020	18,049	23,266
Originated in 2019	8,527	13,987
Originated in 2018	3,513	5,693
Originated in 2017	4,515	6,943
Originated prior to 2017	19,304	26,265
Revolving	1	1
Total loans	74,954	76,155
Residential Mortgages [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Originated in 2021	21,045
Originated in 2020	18,043	23,262
Originated in 2019	8,508	13,969
Originated in 2018	3,492	5,670
Originated in 2017	4,494	6,918
Originated prior to 2017	19,002	25,921
Revolving	1	1
Total loans	74,585	75,741
Residential Mortgages [Member] | Special Mention Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Originated in 2020	1	1
Originated in 2019	1	1
Originated in 2018		1
Originated in 2017		1
Originated prior to 2017		2
Total loans	2	6
Residential Mortgages [Member] | Classified Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Originated in 2020	5	3
Originated in 2019	18	17
Originated in 2018	21	22
Originated in 2017	21	24
Originated prior to 2017	302	342
Total loans	367	408
Residential Mortgages [Member] | Total Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Originated in 2020	6	4
Originated in 2019	19	18
Originated in 2018	21	23
Originated in 2017	21	25
Originated prior to 2017	302	344
Total loans	369	414
Other Retail [Member]
Financing Receivable, Recorded Investment [Line Items]
Originated in 2021	17,251
Originated in 2020	13,326	17,596
Originated in 2019	8,316	11,628
Originated in 2018	4,348	6,841
Originated in 2017	2,141	3,901
Originated prior to 2017	2,275	3,760
Revolving	12,523	12,757
Revolving converted to term	516	541
Total loans	60,696	57,024
Other Retail [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Originated in 2021	17,248
Originated in 2020	13,318	17,589
Originated in 2019	8,300	11,605
Originated in 2018	4,332	6,814
Originated in 2017	2,130	3,879
Originated prior to 2017	2,259	3,731
Revolving	12,400	12,647
Revolving converted to term	473	503
Total loans	60,460	56,768
Other Retail [Member] | Classified Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Originated in 2021	3
Originated in 2020	8	7
Originated in 2019	16	23
Originated in 2018	16	27
Originated in 2017	11	22
Originated prior to 2017	16	29
Revolving	123	110
Revolving converted to term	43	38
Total loans	236	256
Other Retail [Member] | Total Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Originated in 2021	3
Originated in 2020	8	7
Originated in 2019	16	23
Originated in 2018	16	27
Originated in 2017	11	22
Originated prior to 2017	16	29
Revolving	123	110
Revolving converted to term	43	38
Total loans	236	256
Credit Card [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	22,137	22,346
Credit Card [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	21,990	22,149
Credit Card [Member] | Classified Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	147	197
Credit Card [Member] | Total Criticized [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 147	$ 197

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Loans and Allowance for Credit Losses - Summary of Loans by Portfolio Class and Company's Internal Credit Quality Rating (Parenthetical) (Detail) - Government National Mortgage Association [Member] - USD ($) $ in Billions	Sep. 30, 2021	Dec. 31, 2020
Financing Receivable, Recorded Investment [Line Items]
Restructured GNMA loans,classified with a pass rating	$ 1.2	$ 1.4
GNMA loans 90 days or more past due, classified with a pass rating	$ 1.5	$ 1.8

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Loans and Allowance for Credit Losses - Summary of Loans Modified as TDRs (Detail) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021 USD ($) SecurityLoan	Sep. 30, 2020 USD ($) SecurityLoan	Sep. 30, 2021 USD ($) SecurityLoan	Sep. 30, 2020 USD ($) SecurityLoan
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	8,531	7,066	24,209	28,005
Pre-Modification Outstanding Loan Balance	$ 272	$ 634	$ 1,001	$ 1,486
Post-Modification Outstanding Loan Balance	$ 279	$ 506	$ 980	$ 1,321
Commercial [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	506	699	1,736	2,837
Pre-Modification Outstanding Loan Balance	$ 46	$ 262	$ 133	$ 505
Post-Modification Outstanding Loan Balance	$ 47	$ 159	$ 120	$ 375
Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	14	51	100	116
Pre-Modification Outstanding Loan Balance	$ 12	$ 105	$ 136	$ 165
Post-Modification Outstanding Loan Balance	$ 13	$ 81	$ 125	$ 141
Residential Mortgages [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	171	374	867	585
Pre-Modification Outstanding Loan Balance	$ 54	$ 108	$ 299	$ 142
Post-Modification Outstanding Loan Balance	$ 54	$ 108	$ 298	$ 142
Other Retail [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	382	508	2,175	1,537
Pre-Modification Outstanding Loan Balance	$ 9	$ 26	$ 64	$ 50
Post-Modification Outstanding Loan Balance	$ 9	$ 26	$ 58	$ 48
Credit Card [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	6,656	4,699	17,492	19,282
Pre-Modification Outstanding Loan Balance	$ 38	$ 27	$ 102	$ 110
Post-Modification Outstanding Loan Balance	$ 38	$ 27	$ 103	$ 112
Total Loans, Excluding Loans Purchased from GNMA Mortgage Pools [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	7,729	6,331	22,370	24,357
Pre-Modification Outstanding Loan Balance	$ 159	$ 528	$ 734	$ 972
Post-Modification Outstanding Loan Balance	$ 161	$ 401	$ 704	$ 818
Government National Mortgage Association [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	802	735	1,839	3,648
Pre-Modification Outstanding Loan Balance	$ 113	$ 106	$ 267	$ 514
Post-Modification Outstanding Loan Balance	$ 118	$ 105	$ 276	$ 503

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Loans and Allowance for Credit Losses - Summary of Loans Modified as TDRs in the Past Twelve Months that have Subsequently Defaulted (Detail) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021 USD ($) SecurityLoan	Sep. 30, 2020 USD ($) SecurityLoan	Sep. 30, 2021 USD ($) SecurityLoan	Sep. 30, 2020 USD ($) SecurityLoan
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	2,490	1,805	7,254	6,819
Amount Defaulted | $	$ 27	$ 49	$ 98	$ 164
Commercial [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	244	305	856	922
Amount Defaulted | $	$ 5	$ 21	$ 29	$ 49
Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	4	5	16	33
Amount Defaulted | $	$ 1	$ 8	$ 7	$ 24
Residential Mortgages [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	20	5	47	23
Amount Defaulted | $	$ 2	$ 2	$ 5	$ 4
Other Retail [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	124	55	595	245
Amount Defaulted | $	$ 2	$ 1	$ 10	$ 3
Credit Card [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	2,069	1,363	5,638	5,169
Amount Defaulted | $	$ 12	$ 8	$ 32	$ 27
Total Loans, Excluding Loans Purchased from GNMA Mortgage Pools [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	2,461	1,733	7,152	6,392
Amount Defaulted | $	$ 22	$ 40	$ 83	$ 107
Government National Mortgage Association [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	29	72	102	427
Amount Defaulted | $	$ 5	$ 9	$ 15	$ 57

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Accounting for Transfers and Servicing of Financial Assets and Variable Interest Entities - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Variable Interest Entity [Line Items]
Assets related to consolidated VIEs	$ 567,495		$ 567,495		$ 553,905
Liabilities related to consolidated VIEs	513,117		513,117		500,180
Community Development And Tax Advantaged Investments [Member]
Variable Interest Entity [Line Items]
Federal and state income tax credits recognized in tax expense	113	$ 142	356	$ 437
Expense related to investments	101	142	333	429
Investment tax credits	75	118	235	307
Expenses related to investments recognized in tax expense	83	97	262	297
Financial Support Waived Fees [Member]
Variable Interest Entity [Line Items]
Financial or other support to money market funds	67	$ 28	184	$ 49
Variable Interest Entity Not Primary Beneficiary [Member] | Private Investment Funds and Partnerships [Member]
Variable Interest Entity [Line Items]
Maximum exposure to loss	81		81		57
Assets related to consolidated VIEs	40		40		35
Variable Interest Entity Not Primary Beneficiary [Member] | Community Development And Tax Advantaged Investments [Member]
Variable Interest Entity [Line Items]
Maximum exposure to loss	10,368		10,368		11,219
Assets related to consolidated VIEs	4,865		4,865		5,378
Liabilities related to consolidated VIEs	2,180		2,180		2,334
Variable Interest Entity Not Primary Beneficiary [Member] | Minimum [Member]
Variable Interest Entity [Line Items]
Aggregate amount of investments in unconsolidated VIEs	1		1		1
Variable Interest Entity Not Primary Beneficiary [Member] | Maximum [Member]
Variable Interest Entity [Line Items]
Aggregate amount of investments in unconsolidated VIEs	71		71		78
Variable Interest Entity Primary Beneficiary [Member] | Community Development And Tax Advantaged Investments [Member]
Variable Interest Entity [Line Items]
Assets related to consolidated VIEs	5,100		5,100		4,900
Liabilities related to consolidated VIEs	3,600		3,600		3,700
Variable Interest Entity Primary Beneficiary [Member] | Tender Option Bond Program [Member]
Variable Interest Entity [Line Items]
Assets related to consolidated VIEs	1,700		1,700		2,400
Liabilities related to consolidated VIEs	$ 1,200		$ 1,200		$ 1,500

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Accounting for Transfers and Servicing of Financial Assets and Variable Interest Entities - Summary of Investments in Community Development and Tax-advantaged VIEs (Detail) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Variable Interest Entity [Line Items]
Investment carrying amount	$ 567,495	$ 553,905
Unfunded capital and other commitments	513,117	500,180
Variable Interest Entity Not Primary Beneficiary [Member] | Community Development And Tax Advantaged Investments [Member]
Variable Interest Entity [Line Items]
Investment carrying amount	4,865	5,378
Unfunded capital and other commitments	2,180	2,334
Maximum exposure to loss	$ 10,368	$ 11,219

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Mortgage Servicing Rights - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Transfers and Servicing of Financial Assets [Abstract]
Residential mortgage loans serviced for others including subserviced mortgages with no corresponding MSRs asset	$ 219,300		$ 219,300		$ 211,800
Gain (Loss) on fair value changes of MSRs due to changes in valuation assumptions and derivatives used to economically hedge MSRs	(21)	$ 9	(168)	$ 58
Loan servicing and ancillary fees	$ 183	$ 177	$ 536	$ 537

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Mortgage Servicing Rights - Changes in Fair Value of Capitalized MSRs (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Transfers and Servicing of Financial Assets [Abstract]
Balance at beginning of period	$ 2,713	$ 1,840	$ 2,210	$ 2,546
Rights purchased	9	8	36	16
Rights capitalized	284	321	896	712
Rights sold	0	1	1	3
Changes in fair value of MSRs
Due to fluctuations in market interest rates	53	(8)	307	(815)
Due to revised assumptions or models	(30)	(7)	(169)	37
Other changes in fair value	(119)	(177)	(371)	(521)
Balance at end of period	$ 2,910	$ 1,978	$ 2,910	$ 1,978

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Mortgage Servicing Rights - Sensitivity to Changes in Interest Rates of the Fair Value of MSR Portfolio and Related Derivative Instruments (Detail) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Down Scenario [Member] | Mortgage Servicing Rights [Member]
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Net fair value 100 basis points	$ (619)	$ (442)
Net fair value 50 basis points	(320)	(271)
Net fair value 25 basis points	(161)	(150)
Down Scenario [Member] | Derivative [Member]
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Net fair value 100 basis points	574	523
Net fair value 50 basis points	290	281
Net fair value 25 basis points	144	145
Down Scenario [Member] | Net Sensitivity [Member]
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Net fair value 100 basis points	(45)	81
Net fair value 50 basis points	(30)	10
Net fair value 25 basis points	(17)	(5)
Up Scenario [Member] | Mortgage Servicing Rights [Member]
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Net fair value 100 basis points	520	671
Net fair value 50 basis points	294	343
Net fair value 25 basis points	154	169
Up Scenario [Member] | Derivative [Member]
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Net fair value 100 basis points	(524)	(625)
Net fair value 50 basis points	(270)	(304)
Net fair value 25 basis points	(137)	(149)
Up Scenario [Member] | Net Sensitivity [Member]
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Net fair value 100 basis points	(4)	46
Net fair value 50 basis points	24	39
Net fair value 25 basis points	$ 17	$ 20

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Mortgage Servicing Rights - MSRs and Related Characteristics by Portfolio (Detail) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2021 USD ($) BasisPoint Multiple	Dec. 31, 2020 USD ($) BasisPoint Multiple	Jun. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)
Servicing Assets at Fair Value [Line Items]
Fair value	$ 2,910	$ 2,210	$ 2,713	$ 1,978	$ 1,840	$ 2,546
Mortgage Servicing Rights [Member]
Servicing Assets at Fair Value [Line Items]
Servicing portfolio	215,973	208,955
Fair value	$ 2,910	$ 2,210
Value (bps) | BasisPoint	135	106
Weighted-average servicing fees (bps) | BasisPoint	32	32
Multiple (value/servicing fees) | Multiple	4.16	3.26
Weighted-average note rate	3.63%	3.92%
Weighted-average age (in years)	3 years 8 months 12 days	4 years 3 months 18 days
Weighted-average expected prepayment (constant prepayment rate)	10.20%	14.40%
Weighted-average expected life (in years)	6 years 9 months 18 days	5 years 4 months 24 days
Weighted-average option adjusted spread	6.80%	6.60%
HFA [Member] | Mortgage Servicing Rights [Member]
Servicing Assets at Fair Value [Line Items]
Servicing portfolio	$ 40,038	$ 40,396
Fair value	$ 508	$ 406
Value (bps) | BasisPoint	127	101
Weighted-average servicing fees (bps) | BasisPoint	36	35
Multiple (value/servicing fees) | Multiple	3.56	2.87
Weighted-average note rate	4.14%	4.43%
Weighted-average age (in years)	3 years 9 months 18 days	3 years 9 months 18 days
Weighted-average expected prepayment (constant prepayment rate)	11.30%	14.10%
Weighted-average expected life (in years)	6 years 7 months 6 days	5 years 7 months 6 days
Weighted-average option adjusted spread	7.70%	7.70%
Government Insured [Member] | Mortgage Servicing Rights [Member]
Servicing Assets at Fair Value [Line Items]
Servicing portfolio	$ 22,392	$ 25,474
Fair value	$ 304	$ 261
Value (bps) | BasisPoint	136	102
Weighted-average servicing fees (bps) | BasisPoint	41	40
Multiple (value/servicing fees) | Multiple	3.34	2.56
Weighted-average note rate	3.75%	3.91%
Weighted-average age (in years)	5 years 9 months 18 days	5 years 7 months 6 days
Weighted-average expected prepayment (constant prepayment rate)	13.40%	18.00%
Weighted-average expected life (in years)	5 years 6 months	4 years 3 months 18 days
Weighted-average option adjusted spread	7.30%	7.30%
Conventional [Member] | Mortgage Servicing Rights [Member]
Servicing Assets at Fair Value [Line Items]
Servicing portfolio	$ 153,543	$ 143,085
Fair value	$ 2,098	$ 1,543
Value (bps) | BasisPoint	137	108
Weighted-average servicing fees (bps) | BasisPoint	30	30
Multiple (value/servicing fees) | Multiple	4.51	3.55
Weighted-average note rate	3.48%	3.78%
Weighted-average age (in years)	3 years 4 months 24 days	4 years 2 months 12 days
Weighted-average expected prepayment (constant prepayment rate)	9.40%	13.80%
Weighted-average expected life (in years)	7 years	5 years 6 months
Weighted-average option adjusted spread	6.50%	6.20%

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Preferred Stock - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions		9 Months Ended
		Sep. 30, 2021	Dec. 31, 2020
Number of preferred stock shares authorized		50,000,000	50,000,000
Preferred stock issuance costs included in earnings computation	[1]	$ 5
Series M Preferred Stock [Member]
Preferred Stock, Shares Issued		30,000
Liquidation preference per share		$ 25,000
Preferred stock dividend rate fixed percentage		4.00%
Series I [Member]
Preferred stock issuance costs included in earnings computation		$ 5

[1] Represents stock issuance costs originally recorded in preferred stock upon the issuance of the Company’s Series I Preferred Stock that were reclassified to retained earnings on the date the Company announced its intent to redeem the outstanding shares.

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Preferred Stock - Number of Shares Issued and Outstanding and Carrying Amount of Preferred Stock (Detail) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Class of Stock [Line Items]
Shares Issued and Outstanding	209,510	209,510
Liquidation Preference	$ 6,176	$ 6,176
Discount	208	193
Carrying Amount	$ 5,968	$ 5,983
Series A [Member]
Class of Stock [Line Items]
Shares Issued and Outstanding	12,510	12,510
Liquidation Preference	$ 1,251	$ 1,251
Discount	145	145
Carrying Amount	$ 1,106	$ 1,106
Series B [Member]
Class of Stock [Line Items]
Shares Issued and Outstanding	40,000	40,000
Liquidation Preference	$ 1,000	$ 1,000
Carrying Amount	$ 1,000	$ 1,000
Series F [Member]
Class of Stock [Line Items]
Shares Issued and Outstanding	44,000	44,000
Liquidation Preference	$ 1,100	$ 1,100
Discount	12	12
Carrying Amount	$ 1,088	$ 1,088
Series I [Member]
Class of Stock [Line Items]
Shares Issued and Outstanding		30,000
Liquidation Preference		$ 750
Discount		5
Carrying Amount		$ 745
Series J [Member]
Class of Stock [Line Items]
Shares Issued and Outstanding	40,000	40,000
Liquidation Preference	$ 1,000	$ 1,000
Discount	7	7
Carrying Amount	$ 993	$ 993
Series K [Member]
Class of Stock [Line Items]
Shares Issued and Outstanding	23,000	23,000
Liquidation Preference	$ 575	$ 575
Discount	10	10
Carrying Amount	$ 565	$ 565
Series L [Member]
Class of Stock [Line Items]
Shares Issued and Outstanding	20,000	20,000
Liquidation Preference	$ 500	$ 500
Discount	14	14
Carrying Amount	$ 486	$ 486
Series M [Member]
Class of Stock [Line Items]
Shares Issued and Outstanding	30,000
Liquidation Preference	$ 750
Discount	20
Carrying Amount	$ 730

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Preferred Stock - Number of Shares Issued and Outstanding and Carrying Amount of Preferred Stock (Parenthetical) (Detail) - $ / shares	Sep. 30, 2021	Dec. 31, 2020
Equity [Abstract]
Preferred stock, par value	$ 1.00	$ 1.00

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Accumulated Other Comprehensive Income (Loss) - Reconciliation of Transactions Affecting Accumulated Other Comprehensive Income (Loss) Included in Shareholders' Equity (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	$ (1,202)	$ 798	$ 322	$ (1,373)
Changes in unrealized gains and losses	(825)	(305)	(3,008)	2,935
Changes in unrealized gains and losses	8	27	121	(230)
Changes in unrealized gains and losses	(817)	(278)	(2,887)	2,705
Foreign currency translation adjustment	(1)	6	23	(6)
Reclassification to earnings of realized gains and losses	27	23	34	(42)
Applicable income taxes	201	63	716	(672)
Balance at end of period	(1,792)	612	(1,792)	612
Unrealized Gains (Losses) on Investment Securities Available-For-Sale [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	735	2,701	2,417	379
Changes in unrealized gains and losses	(825)	(305)	(3,008)	2,935
Reclassification to earnings of realized gains and losses	(20)	(12)	(88)	(143)
Applicable income taxes	215	81	784	(706)
Balance at end of period	105	2,465	105	2,465
Unrealized Gains (Losses) on Derivative Hedges [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	(107)	(240)	(189)	(51)
Changes in unrealized gains and losses	8	27	121	(230)
Reclassification to earnings of realized gains and losses	8	3	4	7
Applicable income taxes	(4)	(7)	(31)	57
Balance at end of period	(95)	(217)	(95)	(217)
Unrealized Gains (Losses) on Retirement Plans [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	(1,783)	(1,589)	(1,842)	(1,636)
Reclassification to earnings of realized gains and losses	39	32	118	94
Applicable income taxes	(10)	(9)	(30)	(24)
Balance at end of period	(1,754)	(1,566)	(1,754)	(1,566)
Foreign Currency Translation [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	(47)	(74)	(64)	(65)
Foreign currency translation adjustment	(1)	6	23	(6)
Applicable income taxes		(2)	(7)	1
Balance at end of period	$ (48)	$ (70)	$ (48)	$ (70)

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Accumulated Other Comprehensive Income (Loss) - Impact to Net Income for Items Reclassified out of Accumulated Other Comprehensive Income and into Earnings (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Realized gains (losses) on sale of investment securities	$ 20	$ 12	$ 88	$ 143
Realized gains (losses) on derivative hedges	(238)	(346)	(761)	(1,711)
Actuarial gains (losses) and prior service cost (credit) amortization	(291)	(451)	(937)	(1,394)
Applicable income taxes	(564)	(347)	(1,722)	(671)
Net income	2,034	1,586	6,307	3,460
Reclassification Out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net income	(20)	(16)	(25)	32
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains (Losses) on Investment Securities Available-For-Sale [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Realized gains (losses) on sale of investment securities	20	12	88	143
Applicable income taxes	(5)	(3)	(22)	(36)
Net income	15	9	66	107
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains (Losses) on Derivative Hedges [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Realized gains (losses) on derivative hedges	(8)	(3)	(4)	(7)
Applicable income taxes	2	1	1	2
Net income	(6)	(2)	(3)	(5)
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains (Losses) on Retirement Plans [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Actuarial gains (losses) and prior service cost (credit) amortization	(39)	(32)	(118)	(94)
Applicable income taxes	10	9	30	24
Net income	$ (29)	$ (23)	$ (88)	$ (70)

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Earnings Per Share - Components of Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions		3 Months Ended				9 Months Ended
		Sep. 30, 2021		Sep. 30, 2020		Sep. 30, 2021		Sep. 30, 2020
Earnings Per Share [Abstract]
Net income attributable to U.S. Bancorp		$ 2,028		$ 1,580		$ 6,290		$ 3,440
Preferred dividends		(84)	[1]	(79)	[2]	(232)	[3]	(229)	[4]
Impact of preferred stock redemption	[5]					(5)
Earnings allocated to participating stock awards		(10)		(7)		(30)		(15)
Net income applicable to U.S. Bancorp common shareholders		$ 1,934		$ 1,494		$ 6,023		$ 3,196
Average common shares outstanding		1,483		1,506		1,491		1,510
Net effect of the exercise and assumed purchase of stock awards		1		1		1		1
Average diluted common shares outstanding		1,484		1,507		1,492		1,511
Earnings per common share		$ 1.30		$ 0.99		$ 4.04		$ 2.12
Diluted earnings per common share		$ 1.30		$ 0.99		$ 4.04		$ 2.11

[1] Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series J, Series K, Series L and Series M Non-Cumulative Perpetual Preferred Stock of $894.444, $223.611, $406.25, $662.50, $343.75, $234.375 and $250.00, respectively.

[2] Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series H, Series J and Series K Non-Cumulative Perpetual Preferred Stock of $894.444, $223.61, $406.25, $321.88, $662.50 and $343.75, respectively.

[3] Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series I, Series J, Series K, Series L and Series M Non-Cumulative Perpetual Preferred Stock of $2,654.166, $663.542, $1,218.75, $232.953, $1,325.00, $1,031.25, $703.125 and $702.778, respectively.

[4] Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series H, Series I, Series J and Series K Non-Cumulative Perpetual Preferred Stock of $2,663.888, $665.97, $1,218.75, $965.64, $640.625, $1,325.00 and $1,031.25, respectively.

[5] Represents stock issuance costs originally recorded in preferred stock upon the issuance of the Company’s Series I Preferred Stock that were reclassified to retained earnings on the date the Company announced its intent to redeem the outstanding shares.

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Earnings Per Share - Additional Information (Detail) - shares shares in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020
Stock Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Options outstanding of common shares	4	2

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Employee Benefits - Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost		$ 66	$ 58	$ 198	$ 176
Interest cost		54	59	164	176
Expected return on plan assets		(112)	(101)	(337)	(302)
Prior service cost (credit) amortization				(1)
Actuarial loss (gain) amortization		42	34	127	101
Net periodic benefit cost	[1]	50	50	151	151
Postretirement Welfare Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Interest cost		1		1	1
Expected return on plan assets					(2)
Prior service cost (credit) amortization		(1)		(3)	(2)
Actuarial loss (gain) amortization		(2)	(2)	(5)	(5)
Net periodic benefit cost	[1]	$ (2)	$ (2)	$ (7)	$ (8)

[1] Service cost is included in employee benefits expense on the Consolidated Statement of Income. All other components are included in other noninterest expense on the Consolidated Statement of Income.

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Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Income Taxes Additional Information [Abstract]
Federal statutory rate	21.00%
Net deferred tax asset	$ 946	$ 597

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Income Taxes - Components of Income Tax Expense (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Federal
Current	$ 354	$ (53)	$ 1,057	$ 966
Deferred	99	306	305	(459)
Federal income tax	453	253	1,362	507
State
Current	94	92	297	298
Deferred	17	2	63	(134)
State income tax	111	94	360	164
Applicable income taxes	$ 564	$ 347	$ 1,722	$ 671

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Income Taxes - Reconciliation of Expected Income Tax Expense at Federal Statutory Rate of 21 Percent to Company's Applicable Income Tax Expense (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Effective Income Tax Rate Reconciliation, Amount [Abstract]
Tax at statutory rate	$ 546	$ 406	$ 1,686	$ 867
State income tax, at statutory rates, net of federal tax benefit	108	75	327	170
Tax credits and benefits, net of related expenses	(91)	(82)	(267)	(280)
Exam resolutions		(47)		(47)
Tax-exempt income	(28)	(29)	(85)	(87)
Other items	29	24	61	48
Applicable income taxes	$ 564	$ 347	$ 1,722	$ 671

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Derivative Instruments - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2021	Dec. 31, 2020
Derivative [Line Items]
Realized and unrealized gains (losses) on derivatives classified as cash flow hedges recorded in other comprehensive income (loss)	$ 95	$ 95	$ 189
Fair value of derivatives under collateral agreements in a net liability position	874	874
Collateral posted by company netted against net liability position	589	589
Estimated gain to be reclassified from other comprehensive income (loss) into earnings	$ 1	1
Net Investment Hedging [Member]
Derivative [Line Items]
Non-derivative debt instruments designated as net investment hedges		$ 1,400	$ 1,400

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Derivative Instruments - Asset and Liability Management Derivative Positions of Company (Detail) - Asset and Liability Management Positions [Member] - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Derivative [Line Items]
Notional Value, Assets	$ 64,143	$ 64,041
Fair Value, Assets	501	449
Notional Value, Liabilities	52,972	54,020
Fair Value, Liabilities	521	548
Other Derivatives [Member]
Derivative [Line Items]
Notional Value, Assets	601	47
Fair Value, Assets	$ 9	$ 1
Derivative Asset Average Remaining Maturity Period	7 days	1 month 9 days
Notional Value, Liabilities	$ 2,386	$ 1,832
Fair Value, Liabilities	$ 147	$ 183
Derivative Liability Average Remaining Maturity Period	1 year 3 months 21 days	2 years 5 months 8 days
Other Economic Hedges [Member] | Interest Rate Contracts [Member] | Receive Fixed/Pay Floating Swaps [Member]
Derivative [Line Items]
Notional Value, Assets	$ 4,423	$ 11,064
Derivative Asset Average Remaining Maturity Period	4 years 4 months 17 days	7 years 3 months 21 days
Notional Value, Liabilities	$ 5,690	$ 907
Derivative Liability Average Remaining Maturity Period	10 years 3 months 14 days	23 years 5 months 4 days
Other Economic Hedges [Member] | Interest Rate Contracts [Member] | Pay Fixed/Receive Floating Swaps [Member]
Derivative [Line Items]
Notional Value, Assets	$ 2,006	$ 78
Derivative Asset Average Remaining Maturity Period	4 years 3 months 3 days	13 years 8 months 4 days
Notional Value, Liabilities	$ 4,562	$ 8,538
Derivative Liability Average Remaining Maturity Period	4 years 2 months 26 days	5 years 8 months 1 day
Other Economic Hedges [Member] | Interest Rate Contracts [Member] | Futures and Forwards [Member] | Purchased [Member]
Derivative [Line Items]
Notional Value, Assets	$ 5,325	$ 16,431
Fair Value, Assets	$ 29	$ 73
Derivative Asset Average Remaining Maturity Period	25 days	6 months
Notional Value, Liabilities	$ 10,347	$ 1,925
Fair Value, Liabilities	$ 69	$ 5
Derivative Liability Average Remaining Maturity Period	18 days	25 days
Other Economic Hedges [Member] | Interest Rate Contracts [Member] | Futures and Forwards [Member] | Written [Member]
Derivative [Line Items]
Notional Value, Assets	$ 28,069	$ 10,440
Fair Value, Assets	$ 139	$ 48
Derivative Asset Average Remaining Maturity Period	3 months 14 days	14 days
Notional Value, Liabilities	$ 17,637	$ 28,976
Fair Value, Liabilities	$ 57	$ 157
Derivative Liability Average Remaining Maturity Period	1 month 20 days	25 days
Other Economic Hedges [Member] | Interest Rate Contracts [Member] | Options [Member] | Purchased [Member]
Derivative [Line Items]
Notional Value, Assets	$ 16,930	$ 11,610
Fair Value, Assets	$ 235	$ 121
Derivative Asset Average Remaining Maturity Period	3 years 4 months 2 days	4 years 1 month 9 days
Other Economic Hedges [Member] | Interest Rate Contracts [Member] | Options [Member] | Written [Member]
Derivative [Line Items]
Notional Value, Assets	$ 3,620	$ 5,073
Fair Value, Assets	$ 78	$ 202
Derivative Asset Average Remaining Maturity Period	1 month 2 days	1 month 17 days
Notional Value, Liabilities	$ 7,541	$ 7,770
Fair Value, Liabilities	$ 241	$ 198
Derivative Liability Average Remaining Maturity Period	2 years 1 month 9 days	2 years 6 months 10 days
Other Economic Hedges [Member] | Foreign Exchange Forward Contracts [Member]
Derivative [Line Items]
Notional Value, Assets	$ 292	$ 292
Fair Value, Assets	$ 2	$ 1
Derivative Asset Average Remaining Maturity Period	14 days	14 days
Notional Value, Liabilities	$ 275	$ 341
Fair Value, Liabilities	$ 2	$ 2
Derivative Liability Average Remaining Maturity Period	18 days	18 days
Other Economic Hedges [Member] | Equity Contracts [Member]
Derivative [Line Items]
Notional Value, Assets	$ 21	$ 127
Fair Value, Assets	$ 2	$ 3
Derivative Asset Average Remaining Maturity Period	3 months 21 days	4 months 20 days
Notional Value, Liabilities	$ 184	$ 45
Fair Value, Liabilities	$ 5
Derivative Liability Average Remaining Maturity Period	8 months 12 days	5 months 15 days
Fair Value Hedges [Member] | Interest Rate Contracts [Member] | Receive Fixed/Pay Floating Swaps [Member]
Derivative [Line Items]
Notional Value, Assets	$ 700	$ 8,400
Derivative Asset Average Remaining Maturity Period	14 days	1 year 9 months 3 days
Notional Value, Liabilities	$ 2,250
Derivative Liability Average Remaining Maturity Period	3 years 8 months 12 days
Fair Value Hedges [Member] | Interest Rate Contracts [Member] | Pay Fixed/Receive Floating Swaps [Member]
Derivative [Line Items]
Notional Value, Assets	$ 1,330
Derivative Asset Average Remaining Maturity Period	9 years 2 months 23 days
Notional Value, Liabilities	$ 1,850	$ 100
Derivative Liability Average Remaining Maturity Period	8 years 11 months 12 days	9 years 7 months 17 days
Cash Flow Hedges [Member] | Interest Rate Contracts [Member] | Pay Fixed/Receive Floating Swaps [Member]
Derivative [Line Items]
Notional Value, Liabilities	$ 250	$ 3,250
Derivative Liability Average Remaining Maturity Period	2 months 23 days	4 years 7 months 2 days
Net Investment Hedges [Member] | Foreign Exchange Forward Contracts [Member]
Derivative [Line Items]
Notional Value, Assets	$ 826	$ 479
Fair Value, Assets	$ 7
Derivative Asset Average Remaining Maturity Period	21 days	21 days
Notional Value, Liabilities		$ 336
Fair Value, Liabilities		$ 3
Derivative Liability Average Remaining Maturity Period		21 days

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Derivative Instruments - Asset and Liability Management Derivative Positions of Company (Parenthetical) (Detail) - Asset and Liability Management Positions [Member] - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Derivative [Line Items]
Notional Value, Assets	$ 64,143	$ 64,041
Notional Value, Liabilities	52,972	54,020
Fair Value, Liabilities	521	548
Swap [Member] | Visa Class B Shares [Member]
Derivative [Line Items]
Notional Value, Liabilities	1,800	1,800
Fair Value, Liabilities	$ 139	$ 182
Derivative Liability Average Remaining Maturity Period	1 year 9 months	2 years 6 months
Underwriting Purchase and Sale Commitments [Member]
Derivative [Line Items]
Notional Value, Assets	$ 602	$ 47
Notional Value, Liabilities	$ 602	$ 47

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Derivative Instruments - Customer-Related Derivative Positions of Company (Detail) - Customer-Related Positions [Member] - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Derivative [Line Items]
Notional Value, Assets	$ 316,670	$ 294,310
Fair Value, Assets	3,867	5,552
Notional Value, Liabilities	303,453	282,040
Fair Value, Liabilities	2,461	3,054
Interest Rate Contracts [Member] | Receive Fixed/Pay Floating Swaps [Member]
Derivative [Line Items]
Notional Value, Assets	124,770	144,859
Fair Value, Assets	$ 2,398	$ 3,782
Derivative Asset Average Remaining Maturity Period	4 years 9 months 18 days	4 years 11 months 4 days
Notional Value, Liabilities	$ 46,250	$ 12,027
Fair Value, Liabilities	$ 296	$ 99
Derivative Liability Average Remaining Maturity Period	6 years 7 months 9 days	8 years 8 months 19 days
Interest Rate Contracts [Member] | Pay Fixed/Receive Floating Swaps [Member]
Derivative [Line Items]
Notional Value, Assets	$ 47,573	$ 15,048
Fair Value, Assets	$ 80	$ 2
Derivative Asset Average Remaining Maturity Period	6 years 7 months 24 days	8 years 5 months 4 days
Notional Value, Liabilities	$ 119,027	$ 134,963
Fair Value, Liabilities	$ 784	$ 1,239
Derivative Liability Average Remaining Maturity Period	4 years 6 months 3 days	4 years 8 months 15 days
Interest Rate Contracts [Member] | Other Derivatives [Member]
Derivative [Line Items]
Notional Value, Assets	$ 8,463	$ 9,921
Fair Value, Assets	$ 1	$ 6
Derivative Asset Average Remaining Maturity Period	3 years 11 months 23 days	3 years 9 months
Notional Value, Liabilities	$ 7,260	$ 6,387
Fair Value, Liabilities	$ 3	$ 3
Derivative Liability Average Remaining Maturity Period	4 years 7 months 28 days	4 years 2 months 19 days
Interest Rate Contracts [Member] | Options [Member] | Purchased [Member]
Derivative [Line Items]
Notional Value, Assets	$ 85,251	$ 72,655
Fair Value, Assets	$ 217	$ 111
Derivative Asset Average Remaining Maturity Period	1 year 3 months 14 days	1 year 4 months 24 days
Notional Value, Liabilities	$ 2,701	$ 1,454
Fair Value, Liabilities	$ 41	$ 46
Derivative Liability Average Remaining Maturity Period	1 year 10 months 9 days	2 years 11 months 15 days
Interest Rate Contracts [Member] | Options [Member] | Written [Member]
Derivative [Line Items]
Notional Value, Assets	$ 2,690	$ 1,736
Fair Value, Assets	$ 41	$ 46
Derivative Asset Average Remaining Maturity Period	1 year 10 months 6 days	2 years 9 months 3 days
Notional Value, Liabilities	$ 79,781	$ 68,205
Fair Value, Liabilities	$ 192	$ 81
Derivative Liability Average Remaining Maturity Period	1 year 2 months 23 days	1 year 3 months
Interest Rate Contracts [Member] | Futures [Member] | Purchased [Member]
Derivative [Line Items]
Notional Value, Assets	$ 3,456	$ 1,851
Derivative Asset Average Remaining Maturity Period	1 month 20 days	1 year 2 months 19 days
Notional Value, Liabilities	$ 318	$ 924
Derivative Liability Average Remaining Maturity Period	1 year 11 months 19 days	18 days
Interest Rate Contracts [Member] | Futures [Member] | Written [Member]
Derivative [Line Items]
Notional Value, Assets	$ 2,583
Derivative Asset Average Remaining Maturity Period	1 year 5 months 4 days
Notional Value, Liabilities	$ 565	$ 4,090
Derivative Liability Average Remaining Maturity Period	5 months 12 days	8 months 19 days
Foreign Exchange Rate Contracts [Member] | Forwards, Spots and Swaps [Member]
Derivative [Line Items]
Notional Value, Assets	$ 38,518	$ 44,845
Fair Value, Assets	$ 1,112	$ 1,590
Derivative Asset Average Remaining Maturity Period	1 year 2 months 12 days	11 months 15 days
Notional Value, Liabilities	$ 39,988	$ 45,992
Fair Value, Liabilities	$ 1,121	$ 1,565
Derivative Liability Average Remaining Maturity Period	1 year 5 months 12 days	1 year 1 month 17 days
Foreign Exchange Option [Member] | Purchased [Member]
Derivative [Line Items]
Notional Value, Assets	$ 629	$ 519
Fair Value, Assets	$ 18	$ 14
Derivative Asset Average Remaining Maturity Period	11 months 15 days	10 months 24 days
Foreign Exchange Option [Member] | Written [Member]
Derivative [Line Items]
Notional Value, Liabilities	$ 629	$ 519
Fair Value, Liabilities	$ 18	$ 14
Derivative Liability Average Remaining Maturity Period	11 months 15 days	10 months 24 days
Credit Contracts [Member]
Derivative [Line Items]
Notional Value, Assets	$ 2,737	$ 2,876
Fair Value, Assets		$ 1
Derivative Asset Average Remaining Maturity Period	2 years 5 months 26 days	2 years 9 months
Notional Value, Liabilities	$ 6,934	$ 7,479
Fair Value, Liabilities	$ 6	$ 7
Derivative Liability Average Remaining Maturity Period	4 years 4 months 28 days	3 years 9 months 21 days

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Derivative Instruments - Summary of Effective Portion of Gains (Losses) Recognized in Other Comprehensive Income (Loss) and Gains (Losses) Reclassified from Other Comprehensive Income (Loss) into Earnings (Detail) - Asset and Liability Management Positions [Member] - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Cash Flow Hedges [Member] | Interest Rate Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Losses) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	$ 6	$ 21	$ 91	$ (171)
Derivative Instruments, Gains (Losses) Reclassified from Other Comprehensive Income (Loss) into Earnings	(6)	(2)	(3)	(5)
Net Investment Hedges [Member] | Foreign Exchange Forward Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Losses) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	17	(4)	16	6
Net Investment Hedges [Member] | Non Derivative Debt Instruments [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Losses) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	$ 27	$ (45)	$ 61	$ (41)

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Derivative Instruments - Effect of Fair Value and Cash Flow Hedge Accounting on Consolidated Statement of Income (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Interest Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total amount of income line items presented in the Consolidated Statement of Income in which the effects of fair value or cash flow hedges are recorded	$ 3,409	$ 3,573	$ 10,132	$ 11,361
Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total amount of income line items presented in the Consolidated Statement of Income in which the effects of fair value or cash flow hedges are recorded	238	346	761	1,711
Asset and Liability Management Positions [Member] | Fair Value Hedges [Member] | Interest Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gains (Losses) Recognized in Earnings related to fair value hedged item	(45)		(15)
Asset and Liability Management Positions [Member] | Fair Value Hedges [Member] | Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gains (Losses) Recognized in Earnings related to fair value hedged item	(113)	(27)	(185)	167
Asset and Liability Management Positions [Member] | Fair Value Hedges [Member] | Interest Rate Contracts [Member] | Interest Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gains (Losses) Recognized in Earnings related to fair value hedge	45		14
Asset and Liability Management Positions [Member] | Fair Value Hedges [Member] | Interest Rate Contracts [Member] | Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gains (Losses) Recognized in Earnings related to fair value hedge	112	28	185	(166)
Asset and Liability Management Positions [Member] | Cash Flow Hedges [Member] | Interest Rate Contracts [Member] | Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gains (Losses) Recognized in Earnings related to cash flow hedge	$ 8	$ 3	$ 4	$ 7

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Derivative Instruments - Effect of Fair Value and Cash Flow Hedge Accounting on Consolidated Statement of Income (Parenthetical) (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Derivative Instrument Detail [Abstract]
Gains (losses) recognized in earnings related discontinuance of cash flow hedges	$ 13	$ 18	$ 40	$ 24

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Derivative Instruments - Summary of Cumulative Hedging Adjustments and the Carrying Amount of Assets and Liabilities Designated in Fair Value Hedges (Detail) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Available-for-Sale Securities [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Carrying Amount of the Hedged Assets	$ 3,127	$ 99
Cumulative hedging adjustment included in the carrying amount of the hedged assets	(22)	(1)
Long-term Debt Securities [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Carrying amount of the hedged liabilities	2,940	8,567
Cumulative hedging adjustment included in the carrying amount of the hedged liabilities	$ 692	$ 903

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Derivative Instruments - Summary of Cumulative Hedging Adjustments and the Carrying Amount of Assets and Liabilities Designated in Fair Value Hedges (Parenthetical) (Detail) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Available-for-sale Securities [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Cumulative hedging adjustment asset related to discontinued hedging relationships	$ (6)
Long-term Debt Securities [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Cumulative hedging adjustment related to discontinued hedging relationships	$ 700	$ 726

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Derivative Instruments - Summary of Gains (Losses) Recognized in Earnings for Other Economic Hedges and Customer-Related Positions (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Customer-Related Positions [Member] | Interest Rate Contracts [Member] | Commercial Products Revenue [Member] | Options [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings	$ (1)	$ (14)	$ (4)	$ 3
Customer-Related Positions [Member] | Interest Rate Contracts [Member] | Commercial Products Revenue [Member] | Futures [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings				(18)
Customer-Related Positions [Member] | Swaps [Member] | Commercial Products Revenue [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings	26	59	78	103
Customer-Related Positions [Member] | Credit Contracts [Member] | Commercial Products Revenue [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings	(1)	(10)	(3)	(15)
Customer-Related Positions [Member] | Foreign Exchange Rate Contracts [Member] | Commercial Products Revenue [Member] | Forwards, Spots and Swaps [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings	23	20	69	54
Customer-Related Positions [Member] | Foreign Exchange Rate Contracts [Member] | Commercial Products Revenue [Member] | Purchased and Written Options [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings	1	1	1	1
Asset and Liability Management Positions [Member] | Other Economic Hedges [Member] | Interest Rate Contracts [Member] | Mortgage Banking Revenue/Other Noninterest Income [Member] | Futures and Forwards [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings	101	46	432	53
Asset and Liability Management Positions [Member] | Other Economic Hedges [Member] | Interest Rate Contracts [Member] | Mortgage Banking Revenue [Member] | Options [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings	171	428	436	1,173
Asset and Liability Management Positions [Member] | Other Economic Hedges [Member] | Swaps [Member] | Mortgage Banking Revenue [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings	(39)	(51)	(236)	724
Asset and Liability Management Positions [Member] | Other Economic Hedges [Member] | Foreign Exchange Forward Contracts [Member] | Other Noninterest Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings	9	(2)	(1)	9
Asset and Liability Management Positions [Member] | Other Economic Hedges [Member] | Equity Contracts [Member] | Compensation Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings	1	3	6
Asset and Liability Management Positions [Member] | Other Economic Hedges [Member] | Other Derivatives [Member] | Other Noninterest Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in earnings	$ 2	$ (69)	$ 3	$ (70)

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Netting Arrangements for Certain Financial Instruments and Securities Financing Activities - Additional Information (Detail) $ in Billions	Sep. 30, 2021 USD ($)
Derivative [Line Items]
Notional amount of derivative	$ 737.2
Over the Counter Trades [Member]
Derivative [Line Items]
Notional amount of derivative	384.1
Exchange Cleared [Member]
Derivative [Line Items]
Notional amount of derivative	331.5
Exchange Traded [Member]
Derivative [Line Items]
Notional amount of derivative	$ 21.6

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Netting Arrangements for Certain Financial Instruments and Securities Financing Activities - Summary of Maturities by Category of Collateral Pledged for Repurchase Agreements and Securities Loaned Transactions (Detail) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	$ 2,098	$ 1,430
Securities loaned	166	218
Gross amount of recognized liabilities for repurchase agreements and securities loaned	2,264	1,648
Overnight and Continuous [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	2,098	1,430
Securities loaned	166	218
Gross amount of recognized liabilities for repurchase agreements and securities loaned	2,264	1,648
U.S. Treasury and Agencies [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	568	472
U.S. Treasury and Agencies [Member] | Overnight and Continuous [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	568	472
Residential Mortgage-Backed Securities [Member] | Agency [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	838	398
Residential Mortgage-Backed Securities [Member] | Overnight and Continuous [Member] | Agency [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	838	398
Corporate Debt Securities [member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	692	560
Securities loaned	166	218
Corporate Debt Securities [member] | Overnight and Continuous [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	692	560
Securities loaned	$ 166	$ 218

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Netting Arrangements for Certain Financial Instruments and Securities Financing Activities - Information on Company's Accounting Netting Adjustments and Items Not Offset in Consolidated Balance Sheet Assets But Available for Offset in Event of Default (Detail) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Offsetting [Abstract]
Derivative assets Gross Recognized Assets	$ 4,275	$ 5,744
Reverse repurchase agreements Gross Recognized Assets	418	377
Securities borrowed Gross Recognized Assets	1,978	1,716
Total Gross Recognized Assets	6,671	7,837
Derivative assets Gross amounts assets offset in consolidated balance sheet	(1,858)	(1,874)
Total Gross amounts assets offset in consolidated balance sheet	(1,858)	(1,874)
Derivative assets Net Amounts Presented in the Consolidated Balance Sheet	2,417	3,870
Reverse repurchase agreements Net Amounts Presented in the Consolidated Balance Sheet	418	377
Securities borrowed Net Amounts Presented in the Consolidated Balance Sheet	1,978	1,716
Total Net Amounts Presented in the Consolidated Balance Sheet	4,813	5,963
Derivative assets Gross financial instrument asset amounts not offset in consolidated balance sheet	(104)	(109)
Reverse repurchase agreements Gross financial instrument asset amounts not offset in consolidated balance sheet	(317)	(262)
Total Gross financial instrument asset amounts not offset in consolidated balance sheet	(421)	(371)
Derivative assets Gross collateral received amounts not offset in consolidated balance sheet	(141)	(287)
Reverse repurchase agreements Gross collateral received amounts not offset in consolidated balance sheet	(101)	(115)
Securities borrowed Gross collateral received amounts not offset in consolidated balance sheet	(1,925)	(1,670)
Total Gross collateral received amounts not offset in consolidated balance sheet	(2,167)	(2,072)
Derivative assets Net Amount	2,172	3,474
Securities borrowed Net Amount	53	46
Total Net Amount Assets	$ 2,225	$ 3,520

XML

Netting Arrangements for Certain Financial Instruments and Securities Financing Activities - Information on Company's Accounting Netting Adjustments and Items Not Offset in Consolidated Balance Sheet Assets But Available for Offset in Event of Default (Parenthetical) (Detail) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Offsetting [Abstract]
Cash collateral netted against derivative assets	$ 750	$ 898
Derivative assets not subject to netting arrangements	$ 93	$ 257

XML

Netting Arrangements for Certain Financial Instruments and Securities Financing Activities - Information on Company's Accounting Netting Adjustments and Items Not Offset in Consolidated Balance Sheet Liabilities But Available for Offset in Event of Default (Detail) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Offsetting [Abstract]
Derivative liabilities Gross recognized liabilities	$ 2,809	$ 3,419
Repurchase agreements Gross recognized liabilities	2,098	1,430
Securities loaned Gross recognized liabilities	166	218
Total Gross recognized liabilities	5,073	5,067
Derivative liabilities Gross amounts liabilities offset in consolidated balance sheet	(1,697)	(2,312)
Total Gross amounts liabilities offset in consolidated balance sheet	(1,697)	(2,312)
Derivative liabilities Net amounts liabilities presented in consolidated balance sheet	1,112	1,107
Repurchase agreements Net amounts liabilities presented in consolidated balance sheet	2,098	1,430
Securities loaned Net amounts liabilities presented in consolidated balance sheet	166	218
Total Net amounts liabilities presented in consolidated balance sheet	3,376	2,755
Derivative liabilities Gross financial instrument liability amounts not offset in consolidated balance sheet	(104)	(109)
Repurchase agreements Gross financial instrument liability amounts not offset in consolidated balance sheet	(317)	(262)
Total Gross financial instrument liability amounts not offset in consolidated balance sheet	(421)	(371)
Repurchase agreements Gross collateral pledged amounts not offset in consolidated balance sheet	(1,779)	(1,168)
Securities loaned Gross collateral pledged amounts not offset in consolidated balance sheet	(164)	(215)
Total Gross collateral pledged amounts not offset in consolidated balance sheet	(1,943)	(1,383)
Derivative liabilities Net Amount	1,008	998
Repurchase agreements Net Amount	2
Securities loaned Net Amount	2	3
Total Net Amount Liabilities	$ 1,012	$ 1,001

XML

Netting Arrangements for Certain Financial Instruments and Securities Financing Activities - Information on Company's Accounting Netting Adjustments and Items Not Offset in Consolidated Balance Sheet Liabilities But Available for Offset in Event of Default (Parenthetical) (Detail) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Offsetting [Abstract]
Cash collateral netted against derivative liabilities	$ 589	$ 1,300
Derivative liabilities not subject to netting arrangements	$ 173	$ 183

XML

Fair Values of Assets and Liabilities - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Fair Value Disclosures [Abstract]
Mortgage loans held for sale measured at fair value, net gain (loss)	$ (18)	$ 97	$ (135)	$ 271
Carrying value of unfunded commitments, deferred non-yield related loan fees and standby letters of credit	577		577		$ 774
Other guarantees carrying value	$ 278		$ 278		$ 362
Minimum [Member]
Fair Value Disclosures [Abstract]
Assumed credit valuation adjustment as percentage of derivative contract fair value			0.00%
Maximum [Member]
Fair Value Disclosures [Abstract]
Assumed credit valuation adjustment as percentage of derivative contract fair value			97.00%
Weighted-average [Member]
Fair Value Disclosures [Abstract]
Assumed credit valuation adjustment as percentage of derivative contract fair value			2.00%

XML

Fair Values of Assets and Liabilities - Valuation Assumption Ranges for MSRs (Detail) - Mortgage Servicing Rights [Member]	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expected prepayment	10.20%	14.40%
Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expected prepayment	3.00%
Option adjusted spread	6.00%
Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expected prepayment	13.00%
Option adjusted spread	11.00%
Weighted-average [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expected prepayment	10.00%
Option adjusted spread	7.00%

XML

Fair Values of Assets and Liabilities - Valuation Assumption Ranges for Derivative Commitments (Detail) - Derivative Mortgage Loans Commitments [Member]	Sep. 30, 2021
Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expected loan close rate	1.00%
Inherent MSR value (basis points per loan)	47.00%
Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expected loan close rate	100.00%
Inherent MSR value (basis points per loan)	187.00%
Weighted-average [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expected loan close rate	76.00%
Inherent MSR value (basis points per loan)	121.00%

XML

Fair Values of Assets and Liabilities - Balances of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions		Sep. 30, 2021		Jun. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities netting		$ (1,697)			$ (2,312)
Derivative assets netting		(1,858)			(1,874)
Available-for-sale securities	[1]	149,376	[2]		136,840
Mortgage loans held for sale		6,176			8,524
Mortgage servicing rights		2,910		$ 2,713	2,210	$ 1,978	$ 1,840	$ 2,546
Asset-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		69	[3]		205
Other [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		7			9
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities total		1,285			1,290
Derivative assets total		2,510			4,127
Available-for-sale securities		149,376			136,840
Mortgage loans held for sale		6,176			8,524
Mortgage servicing rights		2,910			2,210
Other assets		2,440			1,903
Total		163,412			153,604
Short-term borrowings and other liabilities		2,098			1,757
Total		3,383			3,047
Fair Value, Measurements, Recurring [Member] | Netting and Collateral One [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities netting		(1,697)			(2,312)
Derivative assets netting		(1,858)			(1,874)
Total		(1,858)			(1,874)
Total		(1,697)			(2,312)
Fair Value, Measurements, Recurring [Member] | U.S. Treasury and Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		18,491			22,391
Fair Value, Measurements, Recurring [Member] | Obligations of State and Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		10,327			8,861
Fair Value, Measurements, Recurring [Member] | Residential Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		112,796			99,968
Fair Value, Measurements, Recurring [Member] | Commercial Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		7,686			5,406
Fair Value, Measurements, Recurring [Member] | Asset-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		69			205
Fair Value, Measurements, Recurring [Member] | Other [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		7			9
Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets before netting		6			4
Available-for-sale securities		14,344			19,251
Other assets		322			302
Total		14,672			19,557
Short-term borrowings and other liabilities		205			85
Total		205			85
Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | U.S. Treasury and Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		14,344			19,251
Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities before netting		2,429			3,166
Derivative assets before netting		2,691			3,235
Available-for-sale securities		135,023			117,581
Mortgage loans held for sale		6,176			8,524
Other assets		2,118			1,601
Total		146,008			130,941
Short-term borrowings and other liabilities		1,893			1,672
Total		4,322			4,838
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | U.S. Treasury and Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		4,147			3,140
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Obligations of State and Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		10,326			8,860
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Residential Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		112,796			99,968
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Commercial Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		7,686			5,406
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Asset-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		61			198
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Other [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		7			9
Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities before netting		553			436
Derivative assets before netting		1,671			2,762
Available-for-sale securities		9			8
Mortgage servicing rights		2,910			2,210
Total		4,590			4,980
Total		553			436
Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Obligations of State and Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		1			1
Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Asset-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		$ 8			$ 7

[1] Includes only collateral pledged by the Company where counterparties have the right to sell or pledge the collateral.

[2] The weighted-average maturity of total available-for-sale investment securities was 3.4 years at December 31, 2020, with a corresponding weighted-average yield of 1.61 percent.

[3] Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities that take into account anticipated future prepayments.

XML

Fair Values of Assets and Liabilities - Balances of Assets and Liabilities Measured at Fair Value on Recurring Basis (Parenthetical) (Detail) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Fair Value Disclosures [Abstract]
Equity investments without readily determinable fair values	$ 73	$ 85

XML

Fair Values of Assets and Liabilities - Changes in Fair Value for All Assets and Liabilities Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3) (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Mortgage Servicing Rights [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning of Period Balance	$ 2,713	$ 1,840	$ 2,210	$ 2,546
Net Gains (Losses) Included in Net Income	(96)	(192)	(233)	(1,299)
Purchases	9	8	36	16
Sales		1	1	3
Issuances	284	321	896	712
End of Period Balance	2,910	1,978	2,910	1,978
Net Change in Unrealized Gains (Losses) Relating to Assets and Liabilities Held at End of Period	(96)	(192)	(233)	(1,299)
Available-for-Sale Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning of Period Balance	9	8	8	9
Net Gains (Losses) Included in Other Comprehensive Income (Loss)			1
Principal Payments				(1)
End of Period Balance	9	8	9	8
Net Change in Unrealized Gains (Losses) Relating to Assets and Liabilities Held at End of Period			1
Available-for-Sale Securities [Member] | Obligations of State and Political Subdivisions [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning of Period Balance	1	1	1	1
End of Period Balance	1	1	1	1
Derivative [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning of Period Balance	1,500	2,841	2,326	810
Net Gains (Losses) Included in Net Income	(225)	211	(604)	2,685
Purchases	106	152	166	247
Sales	(1)	(1)	(2)	(2)
Settlements	(262)	(579)	(768)	(1,116)
End of Period Balance	1,118	2,624	1,118	2,624
Net Change in Unrealized Gains (Losses) Relating to Assets and Liabilities Held at End of Period	(203)	228	(761)	1,888
Asset-Backed Securities [Member] | Available-for-Sale Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning of Period Balance	8	7	7	8
Net Gains (Losses) Included in Other Comprehensive Income (Loss)			1
Principal Payments				(1)
End of Period Balance	$ 8	$ 7	8	$ 7
Net Change in Unrealized Gains (Losses) Relating to Assets and Liabilities Held at End of Period			$ 1

XML

Fair Values of Assets and Liabilities - Changes in Fair Value for All Assets and Liabilities Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3) (Parenthetical) (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Other Noninterest Income [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Net gains and (losses) on net derivative assets and liabilities included in net income	$ 1	$ (69)	$ 2	$ (70)
Net Change in net derivative asset and liability unrealized gains (losses) relating to assets still held at end of period	1	(69)	2	(70)
Mortgage Banking Revenue [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Net gains and (losses) on net derivative assets and liabilities included in net income	208	508	544	1,500
Net Change in net derivative asset and liability unrealized gains (losses) relating to assets still held at end of period	57	291	57	291
Commercial Products Revenue [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Net gains and (losses) on net derivative assets and liabilities included in net income	(434)	(228)	(1,200)	1,300
Net Change in net derivative asset and liability unrealized gains (losses) relating to assets still held at end of period	$ (261)	$ 6	$ (820)	$ 1,700

XML

Fair Values of Assets and Liabilities - Adjusted Carrying Values for Assets Measured at Fair Value on Nonrecurring Basis (Detail) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans	$ 65	$ 385
Other assets	67	30
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans	65	385
Other assets	$ 67	$ 30

XML

Fair Values of Assets and Liabilities - Losses Recognized Related to Nonrecurring Fair Value Measurements of Individual Assets or Portfolios (Detail) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Loans [Member]
Fair Value Assets Measured On Nonrecurring Basis Losses Recognized [Line Items]
Losses recognized related to nonrecurring fair value measurements	$ 15	$ 184	$ 58	$ 244
Other Assets [Member]
Fair Value Assets Measured On Nonrecurring Basis Losses Recognized [Line Items]
Losses recognized related to nonrecurring fair value measurements	$ 1	$ 13	$ 7	$ 19

XML

Fair Values of Assets and Liabilities - Differences Between Aggregate Fair Value Carrying Amount of MLHFS for which Fair Value Option has been Elected and Aggregate Unpaid Principal Amount Contractually Obligated to Receive at Maturity (Detail) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Fair Value Disclosures [Abstract]
Fair value carrying amount, total loans	$ 6,176	$ 8,524
Fair value carrying amount, nonaccrual loans	1	1
Fair value carrying amount, loans 90 days or more past due	1	2
Aggregate unpaid principal, total loans	6,017	8,136
Aggregate unpaid principal, nonaccrual loans	1	1
Aggregate unpaid principal, loans 90 days or more past due	1	2
Carrying amount over (under) unpaid principal, total loans	$ 159	$ 388

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Fair Values of Assets and Liabilities - Estimated Fair Values of Financial Instruments (Detail) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Dec. 31, 2019
Financial Assets
Cash and due from banks	$ 63,904	$ 62,580	$ 44,047	$ 22,405
Loans	291,816	290,393
Financial Liabilities
Long-term debt	35,671	41,297
Carrying Amount [Member]
Financial Assets
Cash and due from banks	63,904	62,580
Federal funds sold and securities purchased under resale agreements	440	377
Loans held for sale	15	237
Loans	291,816	290,393
Other	1,472	1,772
Financial Liabilities
Time deposits	22,879	30,694
Short-term borrowings	13,990	10,009
Long-term debt	35,671	41,297
Other	3,972	4,052
Fair Value [Member]
Financial Assets
Cash and due from banks	63,904	62,580
Federal funds sold and securities purchased under resale agreements	440	377
Loans held for sale	15	237
Loans	298,764	300,419
Other	1,472	1,772
Financial Liabilities
Time deposits	22,946	30,864
Short-term borrowings	13,894	9,956
Long-term debt	36,262	42,485
Other	3,972	4,052
Fair Value [Member] | Level 1 [Member]
Financial Assets
Cash and due from banks	63,904	62,580
Fair Value [Member] | Level 2 [Member]
Financial Assets
Federal funds sold and securities purchased under resale agreements	440	377
Other	630	731
Financial Liabilities
Time deposits	22,946	30,864
Short-term borrowings	13,894	9,956
Long-term debt	36,262	42,485
Other	1,114	1,234
Fair Value [Member] | Level 3 [Member]
Financial Assets
Loans held for sale	15	237
Loans	298,764	300,419
Other	842	1,041
Financial Liabilities
Other	$ 2,858	$ 2,818

XML

Guarantees and Contingent Liabilities - Additional Information (Detail) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Airline Processing Arrangements [Member]
Guarantees And Contingent Liabilities (Textual) [Abstract]
Value of airline tickets purchased to deliver at future date through card transactions	$ 7,200
Representation and Warranty [Member]
Guarantees And Contingent Liabilities (Textual) [Abstract]
Carrying Amount	18	$ 19
Unresolved representation and warranty claims from GSEs	14	$ 13
Escrow Deposits Letters of Credit Indemnities [Member] | Airline Processing Arrangements [Member]
Guarantees And Contingent Liabilities (Textual) [Abstract]
Collateral Held	653
Merchant Escrow Deposits [Member] | Airline Processing Arrangements [Member]
Guarantees And Contingent Liabilities (Textual) [Abstract]
Carrying Amount	$ 155

XML

Guarantees and Contingent Liabilities - Summary of Other Guarantees and Contingent Liabilities (Detail) $ in Millions	Sep. 30, 2021 USD ($)
Standby Letters of Credit [Member]
Guarantor Obligations [Line Items]
Carrying Amount	$ 60
Maximum Potential Future Payments	9,556
Third Party Borrowing Arrangements [Member]
Guarantor Obligations [Line Items]
Maximum Potential Future Payments	4
Securities Lending Indemnifications [Member]
Guarantor Obligations [Line Items]
Collateral Held	10,479
Maximum Potential Future Payments	10,157
Asset Sales [Member]
Guarantor Obligations [Line Items]
Carrying Amount	84
Maximum Potential Future Payments	6,793
Merchant Processing [Member]
Guarantor Obligations [Line Items]
Collateral Held	827
Carrying Amount	172
Maximum Potential Future Payments	121,902
Tender Option Bond Program Guarantee [Member]
Guarantor Obligations [Line Items]
Collateral Held	1,719
Maximum Potential Future Payments	1,490
Other Guarantees [Member]
Guarantor Obligations [Line Items]
Carrying Amount	22
Maximum Potential Future Payments	$ 1,532

XML

Business Segments - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Revenue generated from certain contracts with customers included in non-interest income	$ 2,000	$ 1,800	$ 5,600	$ 5,100
Lease revenue	220	246	686	714
Payment Services [Member]
Rewards and Rebate Costs and Certain Partner Payments Included in Noninterest Income	$ 652	$ 525	$ 1,800	$ 1,500

XML

Business Segments - Business Segment Results (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Segment Reporting Information [Line Items]
Noninterest income	$ 2,693	$ 2,712	$ 7,693	$ 7,851
Other intangibles	41	44	119	129
Total noninterest expense	3,429	3,371	10,195	10,005
Provision for credit losses	(163)	635	(1,160)	3,365
Net income	2,034	1,586	6,307	3,460
Net (income) loss attributable to noncontrolling interests	(6)	(6)	(17)	(20)
Net income attributable to U.S. Bancorp	2,028	1,580	6,290	3,440
Corporate and Commercial Banking [Member]
Segment Reporting Information [Line Items]
Net interest income (taxable-equivalent basis)	717	852	2,172	2,623
Noninterest income	253	267	786	899
Total net revenue	970	1,119	2,958	3,522
Noninterest expense	418	428	1,257	1,310
Total noninterest expense	418	428	1,257	1,310
Income (loss) before provision and income taxes	552	691	1,701	2,212
Provision for credit losses	15	95	(20)	572
Income (loss) before income taxes	537	596	1,721	1,640
Income taxes and taxable-equivalent adjustment	134	149	430	410
Net income	403	447	1,291	1,230
Net income attributable to U.S. Bancorp	403	447	1,291	1,230
Loans	102,431	115,547	102,117	118,686
Other earning assets	4,722	4,110	4,485	4,170
Goodwill	1,650	1,647	1,648	1,647
Other intangible assets	5	6	5	6
Assets	114,629	128,369	114,182	131,106
Noninterest-bearing deposits	62,642	48,058	59,841	41,091
Interest-bearing deposits	68,917	87,558	69,999	90,581
Total deposits	131,559	135,616	129,840	131,672
Total U.S. Bancorp shareholders' equity	13,772	15,051	13,995	15,201
Consumer and Business Banking [Member]
Segment Reporting Information [Line Items]
Net interest income (taxable-equivalent basis)	1,551	1,474	4,603	4,239
Noninterest income	715	848	1,918	2,433
Total net revenue	2,266	2,322	6,521	6,672
Noninterest expense	1,450	1,383	4,210	4,061
Other intangibles	3	4	9	12
Total noninterest expense	1,453	1,387	4,219	4,073
Income (loss) before provision and income taxes	813	935	2,302	2,599
Provision for credit losses	(25)	69	(143)	269
Income (loss) before income taxes	838	866	2,445	2,330
Income taxes and taxable-equivalent adjustment	210	217	612	583
Net income	628	649	1,833	1,747
Net income attributable to U.S. Bancorp	628	649	1,833	1,747
Loans	140,833	145,229	141,220	139,981
Other earning assets	7,645	8,195	8,606	6,578
Goodwill	3,506	3,475	3,485	3,508
Other intangible assets	2,754	1,942	2,692	2,095
Assets	160,882	164,246	162,316	157,177
Noninterest-bearing deposits	34,416	34,288	33,734	29,397
Interest-bearing deposits	160,271	133,095	156,821	126,934
Total deposits	194,687	167,383	190,555	156,331
Total U.S. Bancorp shareholders' equity	12,277	13,562	12,378	12,797
Wealth Management and Investment Services [Member]
Segment Reporting Information [Line Items]
Net interest income (taxable-equivalent basis)	225	301	721	964
Noninterest income	558	505	1,638	1,507
Total net revenue	783	806	2,359	2,471
Noninterest expense	507	489	1,499	1,445
Other intangibles	4	3	10	9
Total noninterest expense	511	492	1,509	1,454
Income (loss) before provision and income taxes	272	314	850	1,017
Provision for credit losses	11	11	26	34
Income (loss) before income taxes	261	303	824	983
Income taxes and taxable-equivalent adjustment	65	76	206	246
Net income	196	227	618	737
Net income attributable to U.S. Bancorp	196	227	618	737
Loans	18,454	15,616	17,584	15,151
Other earning assets	225	288	247	285
Goodwill	1,618	1,618	1,618	1,617
Other intangible assets	80	37	69	40
Assets	21,566	18,708	20,676	18,324
Noninterest-bearing deposits	24,453	17,719	23,024	16,285
Interest-bearing deposits	71,841	73,857	76,098	76,736
Total deposits	96,294	91,576	99,122	93,021
Total U.S. Bancorp shareholders' equity	3,172	2,968	3,099	2,924
Payments Services [Member]
Segment Reporting Information [Line Items]
Net interest income (taxable-equivalent basis)	616	643	1,841	1,910
Noninterest income	946	867	2,644	2,319
Total net revenue	1,562	1,510	4,485	4,229
Noninterest expense	817	797	2,381	2,296
Other intangibles	34	37	100	108
Total noninterest expense	851	834	2,481	2,404
Income (loss) before provision and income taxes	711	676	2,004	1,825
Provision for credit losses	166	246	216	477
Income (loss) before income taxes	545	430	1,788	1,348
Income taxes and taxable-equivalent adjustment	136	108	447	338
Net income	409	322	1,341	1,010
Net income attributable to U.S. Bancorp	409	322	1,341	1,010
Loans	31,378	31,168	30,353	31,725
Other earning assets	5	5	5	5
Goodwill	3,168	3,123	3,174	3,027
Other intangible assets	496	602	519	584
Assets	37,173	36,191	35,972	36,497
Noninterest-bearing deposits	4,913	6,886	5,068	3,852
Interest-bearing deposits	150	124	141	119
Total deposits	5,063	7,010	5,209	3,971
Total U.S. Bancorp shareholders' equity	7,561	7,716	7,544	7,269
Treasury and Corporate Support [Member]
Segment Reporting Information [Line Items]
Net interest income (taxable-equivalent basis)	88	(18)	113	(13)
Noninterest income	221	225	707	693
Total net revenue	309	207	820	680
Noninterest expense	196	230	729	764
Total noninterest expense	196	230	729	764
Income (loss) before provision and income taxes	113	(23)	91	(84)
Provision for credit losses	(330)	214	(1,239)	2,013
Income (loss) before income taxes	443	(237)	1,330	(2,097)
Income taxes and taxable-equivalent adjustment	45	(178)	106	(833)
Net income	398	(59)	1,224	(1,264)
Net (income) loss attributable to noncontrolling interests	(6)	(6)	(17)	(20)
Net income attributable to U.S. Bancorp	392	(65)	1,207	(1,284)
Loans	3,643	3,458	3,740	3,392
Other earning assets	193,989	162,488	192,259	156,045
Assets	219,196	189,388	218,053	182,276
Noninterest-bearing deposits	2,594	2,424	2,595	2,310
Interest-bearing deposits	1,290	1,514	1,718	3,293
Total deposits	3,884	3,938	4,313	5,603
Total U.S. Bancorp shareholders' equity	17,491	13,119	16,311	13,745
Consolidated Company [Member]
Segment Reporting Information [Line Items]
Net interest income (taxable-equivalent basis)	3,197	3,252	9,450	9,723
Noninterest income	2,693	2,712	7,693	7,851
Total net revenue	5,890	5,964	17,143	17,574
Noninterest expense	3,388	3,327	10,076	9,876
Other intangibles	41	44	119	129
Total noninterest expense	3,429	3,371	10,195	10,005
Income (loss) before provision and income taxes	2,461	2,593	6,948	7,569
Provision for credit losses	(163)	635	(1,160)	3,365
Income (loss) before income taxes	2,624	1,958	8,108	4,204
Income taxes and taxable-equivalent adjustment	590	372	1,801	744
Net income	2,034	1,586	6,307	3,460
Net (income) loss attributable to noncontrolling interests	(6)	(6)	(17)	(20)
Net income attributable to U.S. Bancorp	2,028	1,580	6,290	3,440
Loans	296,739	311,018	295,014	308,935
Other earning assets	206,586	175,086	205,602	167,083
Goodwill	9,942	9,863	9,925	9,799
Other intangible assets	3,335	2,587	3,285	2,725
Assets	553,446	536,902	551,199	525,380
Noninterest-bearing deposits	129,018	109,375	124,262	92,935
Interest-bearing deposits	302,469	296,148	304,777	297,663
Total deposits	431,487	405,523	429,039	390,598
Total U.S. Bancorp shareholders' equity	$ 54,273	$ 52,416	$ 53,327	$ 51,936