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 years ended December 31 were as follows:


	Corporate and Commercial Banking						Consumer and Business Banking						Wealth Management and Investment Services
(Dollars in Millions)	2021			2020			2021			2020			2021			2020
Condensed Income Statement
Net interest income (taxable-equivalent basis)	$	2,900		$	3,411		$	6,077		$	5,759		$	1,002		$	1,246
Noninterest income		1,035			1,117			2,501			3,177			2,221			2,022
Total net revenue		3,935			4,528			8,578			8,936			3,223			3,268
Noninterest expense		1,678			1,711			5,690			5,470			2,045			1,961
Other intangibles		–			–			12			16			14			12
Total noninterest expense		1,678			1,711			5,702			5,486			2,059			1,973
Income (loss) before provision and income taxes		2,257			2,817			2,876			3,450			1,164			1,295
Provision for credit losses		89			604			(144	)		291			47			40
Income (loss) before income taxes		2,168			2,213			3,020			3,159			1,117			1,255
Income taxes and taxable-equivalent adjustment		542			554			755			791			280			314
Net income (loss)		1,626			1,659			2,265			2,368			837			941
Net (income) loss attributable to noncontrolling interests		–			–			–			–			–			–
Net income (loss) attributable to U.S. Bancorp	$	1,626		$	1,659		$	2,265		$	2,368		$	837		$	941

Average Balance Sheet
Loans	$	103,208		$	115,563		$	141,082		$	141,259		$	18,097		$	15,456
Other earning assets		4,537			4,163			8,093			7,175			242			287
Goodwill		1,715			1,647			3,428			3,500			1,628			1,617
Other intangible assets		5			6			2,760			2,105			84			39
Assets		115,194			128,038			161,571			159,191			21,236			18,564
Noninterest-bearing deposits		61,272			44,309			33,855			30,467			24,587			17,149
Interest-bearing deposits		71,246			88,138			158,434			131,536			75,618			77,525
Total deposits		132,518			132,447			192,289			162,003			100,205			94,674
Total U.S. Bancorp shareholders’ equity		13,928			15,063			12,337			12,739			3,154			2,936

	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)	$	2,458		$	2,562		$	163		$	(54	)	$	12,600		$	12,924
Noninterest income		3,550	(a)		3,124	(a)		920			961			10,227	(b)		10,401	(b)
Total net revenue		6,008			5,686			1,083			907			22,827			23,325
Noninterest expense		3,231			3,123			925			928			13,569			13,193
Other intangibles		133			148			–			–			159			176
Total noninterest expense		3,364			3,271			925			928			13,728			13,369
Income (loss) before provision and income taxes		2,644			2,415			158			(21	)		9,099			9,956
Provision for credit losses		349			681			(1,514	)		2,190			(1,173	)		3,806
Income (loss) before income taxes		2,295			1,734			1,672			(2,211	)		10,272			6,150
Income taxes and taxable-equivalent adjustment		575			434			135			(928	)		2,287			1,165
Net income (loss)		1,720			1,300			1,537			(1,283	)		7,985			4,985
Net (income) loss attributable to noncontrolling interests		–			–			(22	)		(26	)		(22	)		(26	)
Net income (loss) attributable to U.S. Bancorp	$	1,720		$	1,300		$	1,515		$	(1,309	)	$	7,963		$	4,959

Average Balance Sheet
Loans	$	30,856		$	31,539		$	3,722		$	3,452		$	296,965		$	307,269
Other earning assets		93			5			196,211			162,503			209,176			174,133
Goodwill		3,185			3,060			–			–			9,956			9,824
Other intangible assets		508			581			–			–			3,357			2,731
Assets		36,553			36,497			221,978			188,917			556,532			531,207
Noninterest-bearing deposits		4,861			4,351			2,629			2,263			127,204			98,539
Interest-bearing deposits		145			121			1,634			2,756			307,077			300,076
Total deposits		5,006			4,472			4,263			5,019			434,281			398,615
Total U.S. Bancorp shareholders’ equity		7,643			7,462			16,748			14,046			53,810			52,246

(a) Presented net of related rewards and rebate costs and certain partner payments of $2.5 billion and $2.1 billion for 2021 and 2020, respectively.

(b) Includes revenue generated from certain contracts with customers of $7.5 billion and $6.9 billion for 2021 and 2020, respectively.