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Business Segments
3 Months Ended
Mar. 31, 2023
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 comprises consumer banking, small business banking and consumer lending. Products and services are delivered through banking offices, telephone servicing and sales, on-line services, direct mail, ATM processing, mobile devices, distributed mortgage loan officers, and intermediary relationships including auto dealerships, mortgage banks, and strategic business partners.
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 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, including merger and integration charges, are 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 2023, certain organization and methodology changes were made and, accordingly, 2022 results were restated and presented on a comparable basis.
 
Business segment results for the three months ended March 31 were as follows:
 
    Corporate and Commercial
Banking
           
Consumer and
Business Banking
            Wealth Management and
Investment Services
 
(Dollars in Millions)   2023     2022             2023     2022             2023      2022  
Condensed Income Statement
                                                                  
Net interest income (taxable-equivalent basis)
  $ 1,081     $ 746              $ 2,315     $ 1,500              $ 488      $ 276  
Noninterest income
    309       247                397       454                700        595  
Total net revenue
    1,390       993                2,712       1,954                1,188        871  
Noninterest expense
    613       444                1,776       1,398                668        558  
Income (loss) before provision and income taxes
    777       549                936       556                520        313  
Provision for credit losses
    3       5                13       48                (12      8  
Income (loss) before income taxes
    774       544                923       508                532        305  
Income taxes and taxable-equivalent adjustment
    194       136                231       126                133        76  
Net income (loss)
    580       408                692       382                399        229  
Net (income) loss attributable to noncontrolling interests
                                                      
Net income (loss) attributable to U.S. Bancorp
  $ 580     $ 408              $ 692     $ 382              $ 399      $ 229  
                 
Average Balance Sheet
                                                                  
Loans
  $ 150,436     $ 115,867              $ 170,132     $ 140,429              $ 24,335      $ 20,707  
Other earning assets
    5,768       4,676                2,179       4,383                380        241  
Goodwill
    2,824       1,912                4,491       3,261                1,787        1,761  
Other intangible assets
    592       4                5,594       3,176                442        265  
Assets
    170,976       127,891                187,860       156,953                28,625        24,421  
                 
Noninterest-bearing deposits
    58,447       63,010                43,496       31,265                21,896        27,429  
Interest-bearing deposits
    105,011       87,010                185,400       165,885                83,619        70,402  
Total deposits
    163,458       150,020                228,896       197,150                105,515        97,831  
                 
Total U.S. Bancorp shareholders’ equity
    17,350       13,729                16,704       12,214                4,106        3,593  
           
   
Payment
Services
           
Treasury and
Corporate Support
           
Consolidated
Company
 
(Dollars in Millions)   2023     2022             2023     2022             2023      2022  
Condensed Income Statement
                                                                  
Net interest income (taxable-equivalent basis)
  $ 651     $ 622              $ 133     $ 56              $ 4,668      $ 3,200  
Noninterest income
    937  (a)      857  (a)               164       243                2,507  (b)       2,396  (b) 
Total net revenue
    1,588       1,479                297       299                7,175  (c)       5,596  (c) 
Noninterest expense
    915       849                583       253                4,555        3,502  
Income (loss) before provision and income taxes
    673       630                (286     46                2,620        2,094  
Provision for credit losses
    226       130                197       (79              427        112  
Income (loss) before income taxes
    447       500                (483     125                2,193        1,982  
Income taxes and taxable-equivalent adjustment
    112       125                (181     (39              489        424  
Net income (loss)
    335       375                (302     164                1,704        1,558  
Net (income) loss attributable to noncontrolling interests
                         (6     (1              (6      (1
Net income (loss) attributable to U.S. Bancorp
  $ 335     $ 375              $ (308   $ 163              $ 1,698      $ 1,557  
                 
Average Balance Sheet
                                                                  
Loans
  $ 36,935     $ 31,740              $ 4,912     $ 4,223              $ 386,750      $ 312,966  
Other earning assets
    302       1,023                212,235       206,548                220,864        216,871  
Goodwill
    3,320       3,325                                     12,422        10,259  
Other intangible assets
    385       464                36                      7,049        3,909  
Assets
    42,860       38,499                235,126       229,638                665,447        577,402  
                 
Noninterest-bearing deposits
    3,184       3,673                2,718       2,586                129,741        127,963  
Interest-bearing deposits
    108       160                6,445       2,756                380,583        326,213  
Total deposits
    3,292       3,833                9,163       5,342                510,324        454,176  
                 
Total U.S. Bancorp shareholders’ equity
    8,968       8,017                5,539       15,913                52,667        53,466  
 
(a)
Presented net of related rewards and rebate costs and certain partner payments of $717 million and $671 million for the three months ended March 31, 2023 and 2022, respectively.
(b)
Includes revenue generated from certain contracts with customers of $2.1 billion and $1.9 billion for the three months ended March 31, 2023 and 2022, respectively.
(c)
The Company, as a lessor, originates retail and commercial leases either directly to the consumer or indirectly through dealer networks. Under these arrangements, the Company recorded $183 million and 
$204 million of revenue for the three months ended March 31, 2023 and 2022, respectively, primarily consisting of interest income on sales-type and direct financing leases.