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.