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 2022, certain organization and methodology changes were made and, accordingly, 2021 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)	2022			2021			2022			2021			2022			2021
Condensed Income Statement
Net interest income (taxable-equivalent basis)	$	735		$	719		$	1,517		$	1,505		$	274		$	268
Noninterest income		245			268			461			569			596			531
Total net revenue		980			987			1,978			2,074			870			799
Nointerest expense		419			409			1,405			1,344			587			494
Income (loss) before provision and income taxes		561			578			573			730			283			305
Provision for credit losses		3			(48	)		49			(37	)		8			5
Income (loss) before income taxes		558			626			524			767			275			300
Income taxes and taxable-equivalent adjustment		140			157			131			192			69			75
Net income (loss)		418			469			393			575			206			225
Net (income) loss attributable to noncontrolling interests		–			–			–			–			–			–
Net income (loss) attributable to U.S. Bancorp	$	418		$	469		$	393		$	575		$	206		$	225

Average Balance Sheet
Loans	$	115,634		$	101,927		$	141,106		$	141,719		$	20,666		$	16,846
Other earning assets		4,676			4,321			4,381			10,177			259			279
Goodwill		1,912			1,647			3,261			3,475			1,761			1,619
Other intangible assets		4			5			3,176			2,493			265			42
Assets		127,651			114,069			157,696			164,131			24,446			20,120

Noninterest-bearing deposits		62,285			56,281			32,094			32,861			27,350			21,338
Interest-bearing deposits		86,618			71,377			166,765			151,406			69,909			83,474
Total deposits		148,903			127,658			198,859			184,267			97,259			104,812

Total U.S. Bancorp shareholders’ equity		13,710			14,354			12,275			12,496			3,595			3,034

	Payment Services						Treasury and Corporate Support						Consolidated Company
(Dollars in Millions)	2022			2021			2022			2021			2022			2021
Condensed Income Statement
Net interest income (taxable-equivalent basis)	$	622		$	629		$	52		$	(32	)	$	3,200		$	3,089
Noninterest income		858	(a)		785	(a)		236			228			2,396	(b)		2,381	(b)
Total net revenue		1,480			1,414			288			196			5,596	(c)		5,470	(c)
Noninterest expense		854			805			237			327			3,502			3,379
Income (loss) before provision and income taxes		626			609			51			(131	)		2,094			2,091
Provision for credit losses		130			(41	)		(78	)		(706	)		112			(827	)
Income (loss) before income taxes		496			650			129			575			1,982			2,918
Income taxes and taxable-equivalent adjustment		124			163			(40	)		46			424			633
Net income (loss)		372			487			169			529			1,558			2,285
Net (income) loss attributable to noncontrolling interests		–			–			(1	)		(5	)		(1	)		(5	)
Net income (loss) attributable to U.S. Bancorp	$	372		$	487		$	168		$	524		$	1,557		$	2,280

Average Balance Sheet
Loans	$	31,740		$	29,630		$	3,820		$	3,867		$	312,966		$	293,989
Other earning assets		1,023			5			206,532			188,940			216,871			203,722
Goodwill		3,325			3,173			–			–			10,259			9,914
Other intangible assets		464			542			–			–			3,909			3,082
Assets		38,540			35,091			229,069			215,323			577,402			548,734

Noninterest-bearing deposits		3,673			5,264			2,561			2,608			127,963			118,352
Interest-bearing deposits		160			132			2,761			1,623			326,213			308,012
Total deposits		3,833			5,396			5,322			4,231			454,176			426,364

Total U.S. Bancorp shareholders’ equity		8,019			7,658			15,867			15,187			53,466			52,729

(a)	Presented net of related rewards and rebate costs and certain partner payments of $671 million and $535 million for the three months ended March 31, 2022 and 2021, respectively.

(b)	Includes revenue generated from certain contracts with customers of $1.9 billion and $1.7 billion for the three months ended March 31, 2022 and 2021, 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 $204 million and $228 million of revenue for the three months ended March 31, 2022 and 2021, respectively, primarily consisting of interest income on sales-type and direct financing leases.