US BANCORP Stock Forecasts | USB EPS & Price Predictions

EX-99.1 2 d262424dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

U.S. Bancorp Reports Fourth Quarter and Full Year 2021 Results

• Full year net income of $8.0 billion and full year net revenue of $22.8 billion

• Full year return on average assets of 1.43% and return on average common equity of 16.0%

• Common Equity Tier 1 capital ratio of 10.0% and strong levels of liquidity

4Q21 and Full Year Key Financial Data

4Q21 and Full Year Highlights



PROFITABILITY METRICS	4Q21	3Q21	4Q20	Full Year 2021	Full Year 2020
Return on average assets (%)	1.16	1.45	1.10	1.43	.93

Return on average common equity (%)	13.0	15.9	12.1	16.0	10.0

Return on tangible common equity (%) (a)	16.6	20.2	15.6	20.4	13.2

Net interest margin (%)	2.40	2.53	2.57	2.49	2.68

Efficiency ratio (%) (a)	62.3	58.4	58.8	60.4	57.8
INCOME STATEMENT (b)	4Q21	3Q21	4Q20	Full Year 2021	Full Year 2020
Net interest income (taxable-equivalent basis)	$3,150	$3,197	$3,201	$12,600	$12,924

Noninterest income	$2,534	$2,693	$2,550	$10,227	$10,401

Net income attributable to U.S. Bancorp	$1,673	$2,028	$1,519	$7,963	$4,959

Diluted earnings per common share	$1.07	$1.30	$.95	$5.10	$3.06

Dividends declared per common share	$.46	$.46	$.42	$1.76	$1.68
BALANCE SHEET (b)	4Q21	3Q21	4Q20	Full Year 2021	Full Year 2020
Average total loans	$302,755	$296,739	$302,308	$296,965	$307,269

Average total deposits	$449,838	$431,487	$422,413	$434,281	$398,615

Net charge-off ratio	.17%	.20%	.58%	.23%	.58%

Book value per common share (period end)	$32.71	$32.22	$31.26

Basel III standardized CET1 (c)	10.0%	10.2%	9.7%

(a) See Non-GAAP Financial Measures reconciliation on page 16

(b) Dollars in millions, except per share data

(c) CET1 = Common equity tier 1 capital ratio

• Net income of $1,673 million and diluted earnings per common share of $1.07 for 4Q21

• Return on average assets of 1.16% and return on average common equity of 13.0% for 4Q21

• Net revenue decline driven by lower mortgage banking revenue, partially offset by higher trust and investment management fees

• Strong deposit growth supported related investment portfolio and cash balance strategies to optimize asset sensitivity going into 2022. While dilutive to NIM, this was a net benefit to net interest income. This elevated liquidity drove NIM to decline 6 basis points while lower Paycheck Protection Program “PPP” loan fees accounted for 6 basis points decline

• Net charge-off ratio of 0.17% in 4Q21 compared with 0.20% in 3Q21 and 0.58% in 4Q20

• Average total loans grew 2.0% on a linked quarter basis

• Full year net income of $7,963 million and diluted earnings per common share of $5.10

• Full year average earning assets growth of 5.1%

• Full year average total deposits growth of 8.9%

• CET1 capital ratio increased to 10.0% at December 31, 2021, compared with 9.7% at December 31, 2020

CEO Commentary

“The value of our diversified business model was evident in 2021 results. Credit quality continues to be particularly strong with our net charge-off ratio at a historical low of 17 basis points in the fourth quarter. We experienced solid loan growth from new business originations and increased line utilization. Deposit growth was very strong this quarter increasing $18.4 billion or 4.3% compared with the third quarter, which supported our loan growth and provided the opportunity for investment strategies that were both accretive to fourth quarter net interest income and maintains asset sensitivity for future growth in a rising rate environment. As we start a new year, we are encouraged by the momentum building in each of our lines of business. The investments we have made in our digital transformation and payments ecosystem initiatives will continue to enable customer and revenue growth and we expect continued momentum in customer spend activity and loan growth. In the fourth quarter we closed on the acquisition of TravelBank, providing tech-led expense and travel management solutions for mid-size companies, and the PFM acquisition, which increases assets under management. I want to thank our U.S. Bank employees for all they do, and we are looking forward to welcoming Union Bank employees to our team when we close on the acquisition later this year.”

— Andy Cecere, Chairman, President and CEO, U.S. Bancorp

In the Spotlight

U.S. Bank Helping Customers Manage Cash Flow

In 2022, U.S. Bank is implementing changes to help consumer customers better manage their cash flow and avoid fees. Effective January 3, U.S. Bank eliminated certain fees for non-sufficient funds. By the end of the second quarter, the amount an account can be overdrawn prior to fee assessment will increase from $5 to $50. A new U.S. Bank Overdraft Fee Forgiven offering provides account holders a full day to deposit funds to avoid a fee when the negative balance is more than $50. Additionally, the bank will roll out a new balance dashboard providing smart alerts to inform consumers of a potential negative balance before it occurs.

U.S. Bank Acquires PFM Asset Management

U.S. Bank closed on its previously announced agreement to purchase PFM Asset Management LLC. As part of the acquisition, more than 250 PFM Asset Management employees have joined U.S. Bank. With the addition of PFMAM, Wealth Management and Investment Services has combined investment assets under management of approximately $420 billion as of December 31, 2021.

U.S. Bank Acquires TravelBank

U.S. Bancorp, the parent company of U.S. Bank, has acquired TravelBank, a San Francisco-based fintech company that provides an all-in-one, tech-driven expense and travel management solution. TravelBank is easy to use for employees and helps businesses control and track expenses, automate processes, streamline approvals and reporting and ensure compliance with company policies.

Net Zero Greenhouse Gas Emissions Goal

U.S. Bank announced several company-wide commitments to address the impacts of climate change on its business, customers and communities, including setting a goal to achieve Net Zero greenhouse gas emissions by 2050. In addition, goals were set to source 100% renewable electricity within its operations by 2025 and an environmental finance goal of $50 billion by 2030.

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Investor contact: Jennifer Thompson, 612.303.0778 | Media contact: Jeff Shelman, 612.303.9933


		U.S. Bancorp Fourth Quarter 2021 Results


INCOME STATEMENT HIGHLIGHTS
($ in millions, except per-share data)										Percent Change
	4Q 2021			3Q 2021			4Q 2020			4Q21 vs 3Q21			4Q21 vs 4Q20		Full Year 2021			Full Year 2020			Percent Change
Net interest income		$3,123			$3,171			$3,175			(1.5	)		(1.6)		$12,494			$12,825			(2.6	)
Taxable-equivalent adjustment		27			26			26			3.8			3.8		106			99			7.1
Net interest income (taxable-equivalent basis)		3,150			3,197			3,201			(1.5	)		(1.6)		12,600			12,924			(2.5	)
Noninterest income		2,534			2,693			2,550			(5.9	)		(.6)		10,227			10,401			(1.7	)
Total net revenue		5,684			5,890			5,751			(3.5	)		(1.2)		22,827			23,325			(2.1	)
Noninterest expense		3,533			3,429			3,364			3.0			5.0		13,728			13,369			2.7
Income before provision and income taxes		2,151			2,461			2,387			(12.6	)		(9.9)		9,099			9,956			(8.6	)
Provision for credit losses		(13	)		(163	)		441			92.0			nm		(1,173	)		3,806			nm
Income before taxes		2,164			2,624			1,946			(17.5	)		11.2		10,272			6,150			67.0
Income taxes and taxable-equivalent adjustment		486			590			421			(17.6	)		15.4		2,287			1,165			96.3
Net income		1,678			2,034			1,525			(17.5	)		10.0		7,985			4,985			60.2
Net (income) loss attributable to noncontrolling interests		(5	)		(6	)		(6	)		16.7			16.7		(22	)		(26	)		15.4
Net income attributable to U.S. Bancorp		$1,673			$2,028			$1,519			(17.5	)		10.1		$7,963			$4,959			60.6
Net income applicable to U.S. Bancorp common shareholders		$1,582			$1,934			$1,425			(18.2	)		11.0		$7,605			$4,621			64.6
Diluted earnings per common share		$1.07			$1.30			$.95			(17.7	)		12.6		$5.10			$3.06			66.7

Net income attributable to U.S. Bancorp was $1,673 million for the fourth quarter of 2021, which was $154 million higher than the $1,519 million for the fourth quarter of 2020, and $355 million lower than the $2,028 million for the third quarter of 2021. Diluted earnings per common share were $1.07 in the fourth quarter of 2021, compared with $0.95 in the fourth quarter of 2020 and $1.30 in the third quarter of 2021.

The increase in net income year-over-year was primarily due to lower provision for credit losses, partially offset by lower net interest income, lower noninterest income, and higher noninterest expense. Net interest income decreased 1.6 percent on a year-over-year taxable-equivalent basis due to lower loan spreads and mix of earning assets, partially offset by higher investment portfolio balances and the benefit of deposit and funding mix. The net interest margin declined from 2.57 percent a year ago to 2.40 percent in the fourth quarter of 2021 primarily due to the mix of loans, lower loan spreads and higher investment portfolio balances, partially offset by the net benefit of funding composition. Noninterest income decreased 0.6 percent compared with a year ago primarily reflecting lower mortgage banking revenue, other noninterest income, and securities gains, mostly offset by improvements in payments revenue, trust and investment management fees, deposit service charges, and commercial products revenue. Noninterest expense increased 5.0 percent reflecting increases in compensation expense, primarily related to performance-based incentive compensation, as well as higher employee benefits expense, professional services expense and marketing and business development expense, partially offset by lower other noninterest expense.

Net income decreased on a linked quarter basis primarily due to lower net interest income, mainly due to lower loan fees related to the SBA Paycheck Protection Program, and lower noninterest income, primarily due to seasonally lower payments and capital markets revenues and lower mortgage banking revenue as refinancing continued to decline. In addition, noninterest expense increased and the provision for credit losses was higher due to reductions in the allowance for credit losses in the third quarter of 2021. Net interest income on a taxable-equivalent basis decreased 1.5 percent primarily due to the impact of loan forgiveness related to the Paycheck Protection Program (“PPP”), earning asset mix and lower loan yields, partially offset by strong growth in average loan balances. The net interest margin declined 13 basis points from 2.53 percent on a linked quarter basis primarily reflecting lower PPP loan fees as well as the impact of strong deposit flows and related investment and cash balance strategies. Noninterest income decreased 5.9 percent compared with the third quarter of 2021 driven by seasonally lower payments and capital markets revenues and lower mortgage banking revenue, partially offset by improvements in trust and investment management fees. Noninterest expense increased 3.0 percent on a linked quarter basis reflecting higher employee benefits expense, professional services expense, marketing and business development expense and amortization of tax-advantaged investments.

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		U.S. Bancorp Fourth Quarter 2021 Results


NET INTEREST INCOME
(Taxable-equivalent basis; $ in millions)							Change
	4Q 2021		3Q 2021		4Q 2020		4Q21 vs 3Q21		4Q21 vs 4Q20		Full Year 2021		Full Year 2020		Change
Components of net interest income
Income on earning assets		$3,382		$3,435		$3,505		$(53)		$(123)		$13,593		$14,942		$(1,349)
Expense on interest-bearing liabilities		232		238		304		(6)		(72)		993		2,018		(1,025)
Net interest income		$3,150		$3,197		$3,201		$(47)		$(51)		$12,600		$12,924		$(324)

Average yields and rates paid
Earning assets yield		2.58%		2.72%		2.81%		(.14)%		(.23)%		2.69%		3.10%		(.41)%
Rate paid on interest-bearing liabilities		.25		.27		.33		(.02)		(.08)		.28		.56		(.28)
Gross interest margin		2.33%		2.45%		2.48%		(.12)%		(.15)%		2.41%		2.54%		(.13)%
Net interest margin		2.40%		2.53%		2.57%		(.13)%		(.17)%		2.49%		2.68%		(.19)%

Average balances
Investment securities (a)		$160,784		$151,755		$133,430		$9,029		$27,354		$154,702		$125,954		$28,748
Loans		302,755		296,739		302,308		6,016		447		296,965		307,269		(10,304)
Earning assets		522,535		503,325		497,437		19,210		25,098		506,141		481,402		24,739
Interest-bearing liabilities		363,880		353,129		362,445		10,751		1,435		358,533		363,298		(4,765)

(a) Excludes unrealized gain (loss)

Net interest income on a taxable-equivalent basis in the fourth quarter of 2021 was $3,150 million, a decrease of $51 million (1.6 percent) compared with the fourth quarter of 2020. The decrease was primarily due to lower loan spreads and mix of earning assets, partially offset by higher investment portfolio balances and the benefit of deposit and funding mix. Average earning assets were $25.1 billion (5.0 percent) higher than the fourth quarter of 2020, reflecting an increase of $27.4 billion (20.5 percent) in average investment securities and an increase of $447 million (0.1 percent) in average total loans while average other earning assets decreased $673 million (1.3 percent) due to lower cash balances.

Net interest income on a taxable-equivalent basis decreased $47 million (1.5 percent) on a linked quarter basis primarily due to lower interest and loan fees of approximately $82 million related to the SBA Paycheck Protection Program. Average earning assets were $19.2 billion (3.8 percent) higher on a linked quarter basis, reflecting increases of $9.0 billion (5.9 percent) in average investment securities, $6.0 billion (2.0 percent) in average loans and $4.8 billion (10.0 percent) in average other earning assets, driven by higher average cash balances.

The net interest margin in the fourth quarter of 2021 was 2.40 percent, compared with 2.57 percent in the fourth quarter of 2020 and 2.53 percent in the third quarter of 2021. The decrease in the net interest margin from the prior year was primarily due to the mix of loans, lower loan spreads and higher investment portfolio balances, partially offset by the net benefit of funding composition. The decrease in interest margin on a linked quarter basis reflected lower loan fees related to the SBA Paycheck Protection Program, as well as the impact of strong deposit flows and related investment and cash balances strategies.

The increase in average investment securities year-over-year was due to purchases of mortgage-backed, U.S. Treasury and state and political securities, net of prepayments and maturities, while the increase on a linked quarter basis was primarily driven by purchases of U.S. Treasury securities.

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		U.S. Bancorp Fourth Quarter 2021 Results


AVERAGE LOANS
($ in millions)							Percent Change
	4Q 2021		3Q 2021		4Q 2020		4Q21 vs 3Q21			4Q21 vs 4Q20			Full Year 2021		Full Year 2020		Percent Change

Commercial		$99,433		$96,673		$100,863		2.9			(1.4)			$97,649		$108,367		(9.9)
Lease financing		5,075		5,159		5,558		(1.6	)		(8.7	)		5,206		5,600		(7.0)
Total commercial		104,508		101,832		106,421		2.6			(1.8	)		102,855		113,967		(9.8)

Commercial mortgages		28,216		28,080		29,004		.5			(2.7	)		27,997		29,641		(5.5)
Construction and development		10,635		10,841		11,094		(1.9	)		(4.1	)		10,784		10,907		(1.1)
Total commercial real estate		38,851		38,921		40,098		(.2	)		(3.1	)		38,781		40,548		(4.4)

Residential mortgages		75,858		74,104		76,809		2.4			(1.2	)		74,629		73,667		1.3

Credit card		22,399		21,905		21,937		2.3			2.1			21,645		22,332		(3.1)

Retail leasing		7,354		7,643		8,299		(3.8	)		(11.4	)		7,710		8,405		(8.3)
Home equity and second mortgages		10,568		10,936		12,816		(3.4	)		(17.5	)		11,228		13,894		(19.2)
Other		43,217		41,398		35,928		4.4			20.3			40,117		34,456		16.4
Total other retail		61,139		59,977		57,043		1.9			7.2			59,055		56,755		4.1

Total loans		$302,755		$296,739		$302,308		2.0			.1			$296,965		$307,269		(3.4)

Average total loans for the fourth quarter of 2021 were $447 million (0.1 percent) higher than the fourth quarter of 2020. The increase was primarily due to growth in credit card balances (2.1 percent) and other retail loans (20.3 percent) offset by lower total commercial loans (1.8 percent) and total commercial real estate (3.1 percent) and residential mortgages (1.2 percent). The strong growth in other retail was driven by auto and recreational vehicle lending, offset by declining home equity and second mortgages (17.5 percent). The decrease in total commercial loans (1.8 percent) was driven by expected forgiveness of SBA Paycheck Protection Program loans and lower total commercial real estate loans (3.1 percent) was a result of paydowns.

Average total loans were $6.0 billion (2.0 percent) higher than the third quarter of 2021 primarily due to higher total commercial loans (2.6 percent) driven by strong new business and higher utilization, higher credit card balances (2.3 percent), growth in residential mortgages (2.4 percent) due to increased loan portfolio production and slower payoffs in the mortgage portfolio, and higher other retail loans (4.4 percent) driven by growth in installment loans.

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		U.S. Bancorp Fourth Quarter 2021 Results


AVERAGE DEPOSITS
($ in millions)							Percent Change
	4Q		3Q		4Q		4Q21 vs			4Q21 vs			Full Year		Full Year		Percent
	2021		2021		2020		3Q21			4Q20			2021		2020		Change

Noninterest-bearing deposits	$	135,936	$	129,018	$	115,148		5.4			18.1		$	127,204	$	98,539		29.1
Interest-bearing savings deposits
Interest checking		108,889		103,036		91,384		5.7			19.2			103,198		84,276		22.5
Money market savings		117,462		112,543		127,390		4.4			(7.8	)		117,093		125,786		(6.9	)
Savings accounts		64,763		63,387		55,730		2.2			16.2			62,294		52,142		19.5
Total savings deposits		291,114		278,966		274,504		4.4			6.1			282,585		262,204		7.8
Time deposits		22,788		23,503		32,761		(3.0	)		(30.4	)		24,492		37,872		(35.3	)
Total interest-bearing deposits		313,902		302,469		307,265		3.8			2.2			307,077		300,076		2.3

Total deposits	$	449,838	$	431,487	$	422,413		4.3			6.5		$	434,281	$	398,615		8.9

Average total deposits for the fourth quarter of 2021 were $27.4 billion (6.5 percent) higher than the fourth quarter of 2020. Average noninterest-bearing deposits increased $20.8 billion (18.1 percent) primarily within Corporate and Commercial Banking and Wealth Management and Investment Services, partially offset by a decrease in Payments Services. Average total savings deposits were $16.6 billion (6.1 percent) higher year-over-year driven by Consumer and Business Banking, partially offset by a decrease in Wealth Management and Investment Services. Average time deposits were $10.0 billion (30.4 percent) lower than the prior year within Corporate and Commercial Banking, Consumer and Business Banking and Wealth Management and Investment Services. Changes in time deposits are primarily related to those deposits managed as an alternative to other funding sources, based largely on relative pricing and liquidity characteristics.

Average total deposits experienced strong growth of $18.4 billion (4.3 percent) from the third quarter of 2021. On a linked quarter basis, average noninterest-bearing deposits increased $6.9 billion (5.4 percent) driven by Wealth Management and Investment Services and Corporate and Commercial Banking. Average total savings deposits increased $12.1 billion (4.4 percent) compared with the third quarter of 2021 driven by increases in Corporate and Commercial Banking, Consumer and Business Banking and Wealth Management and Investment Services. Average time deposits, which are managed based on funding needs, relative pricing and liquidity characteristics, were $715 million (3.0 percent) lower on a linked quarter basis, with decreases across most business lines.

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		U.S. Bancorp Fourth Quarter 2021 Results


NONINTEREST INCOME
($ in millions)							Percent Change
	4Q		3Q		4Q		4Q21 vs			4Q21 vs			Full Year		Full Year		Percent
	2021		2021		2020		3Q21			4Q20			2021		2020		Change

Credit and debit card revenue		$382		$393		$362		(2.8)			5.5			$1,507		$1,338		12.6
Corporate payment products revenue		155		156		126		(.6	)		23.0			575		497		15.7
Merchant processing services		365		392		311		(6.9	)		17.4			1,449		1,261		14.9
Trust and investment management fees		483		459		441		5.2			9.5			1,832		1,736		5.5
Deposit service charges		193		194		165		(.5	)		17.0			724		677		6.9
Treasury management fees		152		155		143		(1.9	)		6.3			614		568		8.1
Commercial products revenue		265		277		239		(4.3	)		10.9			1,102		1,143		(3.6	)
Mortgage banking revenue		298		418		468		(28.7	)		(36.3	)		1,361		2,064		(34.1	)
Investment products fees		62		62		50		--			24.0			239		192		24.5
Securities gains (losses), net		15		20		34		(25.0	)		(55.9	)		103		177		(41.8	)
Other		164		167		211		(1.8	)		(22.3	)		721		748		(3.6	)

Total noninterest income	$	2,534	$	2,693	$	2,550		(5.9	)		(.6	)	$	10,227	$	10,401		(1.7	)

Fourth quarter noninterest income of $2,534 million was $16 million (0.6 percent) lower than the fourth quarter of 2020 reflecting strong growth in payments revenue, trust and investment management fees, deposit service charges, and commercial products revenue that was more than offset by lower mortgage banking revenue, other noninterest income and securities gains. Mortgage banking revenue decreased $170 million (36.3 percent) compared with the fourth quarter of 2020 due to lower mortgage production volume, given declining refinancing activity, and related gain on sale margins, partially offset by the favorable net impact of the change in fair value of mortgage servicing rights, net of hedging activities. Other noninterest income decreased $47 million (22.3 percent) driven by lower tax-advantaged investment syndication revenue in the fourth quarter of 2021 and the impact of favorable asset gains and the transition services agreement revenue associated with the sale of the Company’s ATM third-party servicing business in the fourth quarter of 2020. Several fee categories had strong growth from a year ago. Payment services revenue increased $103 million (12.9 percent) compared with the fourth quarter of 2020 as credit and debit card revenue increased $20 million (5.5 percent) due to higher net interchange revenue related to sales volumes as well as stronger fee activity. Corporate payment products revenue increased $29 million (23.0 percent) primarily due to higher sales volume. Merchant processing services revenue increased $54 million (17.4 percent) driven by higher sales volumes and merchant fees. Trust and investment management fees increased $42 million (9.5 percent) driven by business growth, favorable market conditions and activity related to the acquisition of PFM Asset Management LLC (“PFM”), partially offset by higher fee waivers. Deposit service charges increased $28 million (17.0 percent) primarily due to the impact of customer remediations in 2020 as well as higher customer activity in the fourth quarter of 2021. Commercial products revenue increased $26 million (10.9 percent) primarily due to higher capital markets and foreign currency customer activity as well as higher trading revenue, partially offset by lower commercial leasing fees.

Noninterest income was $159 million (5.9 percent) lower in the fourth quarter of 2021 compared with the third quarter of 2021 reflecting seasonally lower payments and capital markets revenues and declining mortgage banking revenue. Payment services revenue decreased $39 million (4.1 percent) compared with the third quarter of 2021 as credit and debit card revenue decreased $11 million (2.8 percent) due to lower net interchange rate, net of higher volume and merchant processing services decreased $27 million (6.9 percent) primarily driven by lower rate and sales volume in sectors that continue to be negatively impacted by the pandemic. Mortgage banking revenue decreased $120 million (28.7 percent) driven by lower production volume and related gain on sale margins and the slightly unfavorable net impact of the change in fair value of mortgage servicing rights, net of hedging activities. Partially offsetting these decreases, trust and investment management fees increased $24 million (5.2 percent) driven by favorable market conditions, business growth and activity related to the acquisition of PFM.

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		U.S. Bancorp Fourth Quarter 2021 Results


NONINTEREST EXPENSE
($ in millions)							Percent Change
	4Q 2021		3Q 2021		4Q 2020		4Q21 vs 3Q21			4Q21 vs 4Q20			Full Year 2021		Full Year 2020		Percent Change

Compensation	$	1,851	$	1,847	$	1,643		.2			12.7			$7,299		$6,635		10.0
Employee benefits		372		336		302		10.7			23.2			1,429		1,303		9.7
Net occupancy and equipment		268		259		269		3.5			(.4	)		1,048		1,092		(4.0	)
Professional services		160		126		123		27.0			30.1			492		430		14.4
Marketing and business development		129		99		105		30.3			22.9			366		318		15.1
Technology and communications		372		361		362		3.0			2.8			1,454		1,294		12.4
Postage, printing and supplies		71		69		74		2.9			(4.1	)		274		288		(4.9	)
Other intangibles		40		41		47		(2.4	)		(14.9	)		159		176		(9.7	)
Other		270		291		439		(7.2	)		(38.5	)		1,207		1,833		(34.2	)

Total noninterest expense	$	3,533	$	3,429	$	3,364		3.0			5.0		$	13,728	$	13,369		2.7

Fourth quarter noninterest expense of $3,533 million was $169 million (5.0 percent) higher than the fourth quarter of 2020 reflecting increases in compensation expense, employee benefits expense, professional services expense, and marketing and business development, partially offset by lower other noninterest expense. Compensation expense increased $208 million (12.7 percent) compared with the fourth quarter of 2020 primarily due to performance-based incentives, revenue related commissions, merit, and hiring to support business growth. Employee benefits increased $70 million (23.2 percent) driven by higher medical claims expense and compensation related payroll taxes in the fourth quarter of 2021. Professional services expense increased $37 million (30.1 percent) primarily due to an increase in business investment and related initiatives. Marketing and business development expense increased $24 million (22.9 percent) due to the timing of marketing campaigns and increased travel and entertainment. These increases were partially offset by lower other noninterest expense of $169 million (38.5 percent) due to COVID-19 related accruals in the fourth quarter of 2020, including recognizing liabilities related to future delivery exposures for merchant and airline processing and other accruals.

Noninterest expense increased $104 million (3.0 percent) on a linked quarter basis reflecting increases in employee benefits expense, professional services expense and marketing and business development, partially offset by lower other noninterest expense. Employee benefits expense increased $36 million (10.7 percent) driven by higher medical claims expense. Professional services expense increased $34 million (27.0 percent) primarily due to an increase in business investment and related initiatives. Marketing and business development expense increased $30 million (30.3 percent) due to the timing of marketing campaigns. Partially offsetting these increases, other noninterest expense decreased $21 million (7.2 percent) primarily due to lower accruals related to future delivery exposures for merchant and airline processing and other accruals, partially offset by seasonally higher amortization of tax-advantaged investments, which were scaled back in 2020 due to the economic environment driven by the pandemic conditions.

Provision for Income Taxes

The provision for income taxes for the fourth quarter of 2021 resulted in a tax rate of 22.5 percent on a taxable-equivalent basis (effective tax rate of 21.5 percent), compared with 21.6 percent on a taxable-equivalent basis (effective tax rate of 20.6 percent) in the fourth quarter of 2020, and a tax rate of 22.5 percent on a taxable-equivalent basis (effective tax rate of 21.7 percent) in the third quarter of 2021.

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		U.S. Bancorp Fourth Quarter 2021 Results


ALLOWANCE FOR CREDIT LOSSES
($ in millions)	4Q 2021			% (a)			3Q 2021			% (a)			2Q 2021			% (a)			1Q 2021			% (a)			4Q 2020			% (a)
Balance, beginning of period	$	6,300					$	6,610					$	6,960					$	8,010					$	8,010
Net charge-offs
Commercial		6			.02			13			.05			26			.11			52			.22			142			.56
Lease financing		--			--			1			.08			1			.08			4			.30			8			.57

Total commercial		6			.02			14			.05			27			.11			56			.22			150			.56
Commercial mortgages		(3	)		(.04	)		1			.01			--			--			(12	)		(.17	)		82			1.12
Construction and development		(1	)		(.04	)		12			.44			--			--			5			.19			2			.07

Total commercial real estate		(4	)		(.04	)		13			.13			--			--			(7	)		(.07	)		84			.83
Residential mortgages		(7	)		(.04	)		(10	)		(.05	)		(10	)		(.05	)		(5	)		(.03	)		(7	)		(.04	)

Credit card		109			1.93			111			2.01			148			2.81			144			2.76			165			2.99

Retail leasing		1			.05			1			.05			(1	)		(.05	)		1			.05			9			.43
Home equity and second mortgages		(2	)		(.08	)		(3	)		(.11	)		(3	)		(.11	)		(2	)		(.07	)		(3	)		(.09	)
Other		29			.27			21			.20			19			.20			36			.40			43			.48

Total other retail		28			.18			19			.13			15			.10			35			.25			49			.34

Total net charge-offs		132			.17			147			.20			180			.25			223			.31			441			.58
Provision for credit losses		(13	)					(163	)					(170	)					(827	)					441

Balance, end of period	$	6,155					$	6,300					$	6,610					$	6,960					$	8,010

Components
Allowance for loan losses	$	5,724					$	5,792					$	6,026					$	6,343					$	7,314
Liability for unfunded credit commitments		431						508						584						617						696

Total allowance for credit losses	$	6,155					$	6,300					$	6,610					$	6,960					$	8,010

Gross charge-offs	$	254					$	266					$	314					$	374					$	556
Gross recoveries	$	122					$	119					$	134					$	151					$	115

Allowance for credit losses as a percentage of Period-end loans		1.97						2.12						2.23						2.36						2.69
Nonperforming loans		738						695						649						617						654
Nonperforming assets		701						667						624						579						617

(a) Annualized and calculated on average loan balances

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		U.S. Bancorp Fourth Quarter 2021 Results

The Company’s provision for credit losses for the fourth quarter of 2021 was a benefit of $13 million, which was $150 million higher than the prior quarter and $454 million lower than the fourth quarter of 2020. During 2021, factors affecting economic conditions, including passing of additional government stimulus and widespread vaccine availability in the U.S., have contributed to economic improvement. However, economic uncertainty remains associated with supply chain concerns, rising inflationary concerns and additional virus variants. 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 the support of mortgage forbearance and direct federal stimulus. Currently, consumer credit trends continue to perform better than expected, while select wholesale portfolios continue to be monitored for pandemic related impacts.

Total net charge-offs in the fourth quarter of 2021 were $132 million, compared with $147 million in the third quarter of 2021 and $441 million in the fourth quarter of 2020. The net charge-off ratio was 0.17 percent in the fourth quarter of 2021, compared with 0.20 percent in the third quarter of 2021 and 0.58 percent in the fourth quarter of 2020. Net charge-offs decreased $15 million (10.2 percent) compared with the third quarter of 2021 associated with borrower liquidity and strong asset prices in the market that support repayment and recovery on problem loans. Net charge-offs decreased $309 million (70.1 percent) compared with the fourth quarter of 2020 reflecting improvement across all loan categories.

The allowance for credit losses was $6,155 million at December 31, 2021, compared with $6,300 million at September 30, 2021, and $8,010 million at December 31, 2020. The decrease on a linked quarter basis was driven by continued strong credit quality and collateral performance, partially offset by loan growth. Economic re-openings associated with vaccine availability improved performance and contributed to lower reserve levels. The ratio of the allowance for credit losses to period-end loans was 1.97 percent at December 31, 2021, compared with 2.12 percent at September 30, 2021, and 2.69 percent at December 31, 2020. The ratio of the allowance for credit losses to nonperforming loans was 738 percent at December 31, 2021, compared with 695 percent at September 30, 2021, and 654 percent at December 31, 2020.

Nonperforming assets were $878 million at December 31, 2021, compared with $944 million at September 30, 2021, and $1,298 million at December 31, 2020. The ratio of nonperforming assets to loans and other real estate was 0.28 percent at December 31, 2021, compared with 0.32 percent at September 30, 2021, and 0.44 percent at December 31, 2020. The year-over-year and linked quarter decrease in nonperforming assets was primarily due to decreases in total commercial nonperforming loans and commercial mortgage nonperforming loans. Accruing loans 90 days or more past due were $472 million at December 31, 2021, compared with $385 million at September 30, 2021, and $477 million at December 31, 2020. The Company expects credit quality to return to more normalized levels over time. However, some manageable levels of elevated nonperforming assets in certain industries and loan categories impacted by the pandemic may experience longer recovery periods.

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		U.S. Bancorp Fourth Quarter 2021 Results



DELINQUENT LOAN RATIOS AS A PERCENT OF ENDING LOAN BALANCES
(Percent)	Dec 31 2021		Sep 30 2021		Jun 30 2021		Mar 31 2021		Dec 31 2020

Delinquent loan ratios - 90 days or more past due excluding nonperforming loans
Commercial		.04		.04		.04		.06		.05
Commercial real estate		.03		.05		.01		.01		.01
Residential mortgages		.24		.15		.16		.19		.18
Credit card		.73		.66		.70		.95		.88
Other retail		.11		.11		.10		.12		.15
Total loans		.15		.13		.13		.16		.16

Delinquent loan ratios - 90 days or more past due including nonperforming loans
Commercial		.20		.25		.32		.39		.42
Commercial real estate		.76		.82		.81		.94		1.15
Residential mortgages		.53		.47		.49		.54		.50
Credit card		.73		.66		.70		.95		.88
Other retail		.35		.36		.39		.42		.42
Total loans		.42		.43		.47		.54		.57


ASSET QUALITY (a)
($ in millions)

	Dec 31 2021		Sep 30 2021		Jun 30 2021		Mar 31 2021		Dec 31 2020
Nonperforming loans
Commercial		$139		$179		$247		$298		$321
Lease financing		35		37		44		49		54
Total commercial		174		216		291		347		375
Commercial mortgages		213		215		224		266		411
Construction and development		71		81		88		90		39
Total commercial real estate		284		296		312		356		450
Residential mortgages		226		237		244		253		245
Credit card		--		--		--		--		--
Other retail		150		157		171		172		154

Total nonperforming loans		834		906		1,018		1,128		1,224

Other real estate		22		17		17		19		24

Other nonperforming assets		22		21		24		55		50

Total nonperforming assets		$878		$944		$1,059		$1,202		$1,298

Accruing loans 90 days or more past due		$472		$385		$376		$476		$477

Nonperforming assets to loans plus ORE (%)		.28		.32		.36		.41		.44

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

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		U.S. Bancorp Fourth Quarter 2021 Results


COMMON SHARES
(Millions)	4Q 2021		3Q 2021		2Q 2021			1Q 2021			4Q 2020
Beginning shares outstanding		1,483		1,483		1,497			1,507			1,506
Shares issued for stock incentive plans, acquisitions and other corporate purposes		1		--		1			3			1
Shares repurchased		--		--		(15	)		(13	)		--

Ending shares outstanding		1,484		1,483		1,483			1,497			1,507


CAPITAL POSITION
($ in millions)	Dec 31			Sep 30			Jun 30			Mar 31			Dec 31
	2021			2021			2021			2021			2020

Total U.S. Bancorp shareholders’ equity	$	54,918		$	53,743		$	53,039		$	51,678		$	53,095

Basel III Standardized Approach (a)
Common equity tier 1 capital	$	41,701		$	41,014		$	39,691		$	39,103		$	38,045
Tier 1 capital		48,516			47,426			46,103			45,517			44,474
Total risk-based capital		56,250			54,178			53,625			53,625			52,602

Common equity tier 1 capital ratio		10.0	%		10.2	%		9.9	%		9.9	%		9.7	%
Tier 1 capital ratio		11.6			11.7			11.5			11.5			11.3
Total risk-based capital ratio		13.4			13.4			13.4			13.5			13.4
Leverage ratio		8.6			8.7			8.5			8.4			8.3

Tangible common equity to tangible assets (b)		6.8			6.8			6.8			6.6			6.9
Tangible common equity to risk-weighted assets (b)		9.2			9.4			9.3			9.1			9.5

Common equity tier 1 capital to risk-weighted assets, reflecting the full implementation of the current expected credit losses methodology (b)		9.6			9.7			9.5			9.5			9.3

(a) Amounts and ratios calculated in accordance with transitional regulatory requirements related to the current expected credit losses methodology
(b) See Non-GAAP Financial Measures reconciliation on page 16

Total U.S. Bancorp shareholders’ equity was $54.9 billion at December 31, 2021, compared with $53.7 billion at September 30, 2021, and $53.1 billion at December 31, 2020. 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 after the acquisition closes in order to build capital prior to the acquisition. The Company expects to operate at a CET1 capital ratio between our target ratio and 9.0 percent after closing of the acquisition.

All regulatory ratios continue to be in excess of “well-capitalized” requirements. The common equity tier 1 capital to risk-weighted assets ratio using the Basel III standardized approach was 10.0 percent at December 31, 2021, compared with 10.2 percent at September 30, 2021, and 9.7 percent at December 31, 2020. The Company’s common equity tier 1 capital to risk-weighted assets ratio, reflecting the full implementation of the current expected credit losses methodology was 9.6 percent at December 31, 2021, compared with 9.7 percent at September 30, 2021, and 9.3 percent at December 31, 2020.

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		U.S. Bancorp Fourth Quarter 2021 Results

Investor Conference Call

On Wednesday, January 19, 2022 at 8 a.m. CT, Chairman, President and Chief Executive Officer Andy Cecere and Vice Chair and Chief Financial Officer Terry Dolan will host a conference call to review the financial results. The conference call will be available online or by telephone. To access the webcast and presentation, visit U.S. Bancorp’s website at usbank.com and click on “About Us,” “Investor Relations” and “Webcasts & Presentations.” To access the conference call from locations within the United States and Canada, please dial 866.316.1409. Participants calling from outside the United States and Canada, please dial 706.634.9086. The conference ID number for all participants is 7876125. For those unable to participate during the live call, a recording will be available at approximately 11 a.m. CT on Wednesday, January 19, 2022 and will be accessible until Wednesday, January 26,2022 at 10:59 p.m. CT. To access the recorded message within the United States and Canada, please dial 855.859.2056. If calling from outside the United States and Canada, please dial 404.537.3406 to access the recording. The conference ID is 7876125.

About U.S. Bancorp

U.S. Bancorp, with nearly 70,000 employees and $573 billion in assets as of December 31, 2021, is the parent company of U.S. Bank National Association. The Minneapolis-based company serves millions of customers locally, nationally and globally through a diversified mix of businesses: Consumer and Business Banking; Payment Services; Corporate & Commercial Banking; and Wealth Management and Investment Services. The company has been recognized for its approach to digital innovation, social responsibility, and customer service, including being named one of the 2021 World’s Most Ethical Companies and Fortune’s most admired superregional bank. Learn more at usbank.com/about.

Forward-looking Statements

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

This press release 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.

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		U.S. Bancorp Fourth Quarter 2021 Results

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.

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

•

Common equity tier 1 capital to risk-weighted assets, reflecting the full implementation of the current expected credit losses methodology, and

•

Return on tangible common equity.

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 current expected credit losses 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 press release in their entirety, and not to rely on any single financial measure. A table follows that shows the Company’s calculation of these non-GAAP financial measures.

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CONSOLIDATED STATEMENT OF INCOME
(Dollars and Shares in Millions, Except Per Share Data)	Three Months Ended December 31,						Year Ended December 31,
(Unaudited)	2021			2020			2021			2020
Interest Income
Loans		$2,635			$2,866			$10,747			$12,018
Loans held for sale		56			59			232			216
Investment securities		624			520			2,365			2,428
Other interest income		40			34			143			178
Total interest income		3,355			3,479			13,487			14,840
Interest Expense
Deposits		75			101			320			950
Short-term borrowings		18			17			70			141
Long-term debt		139			186			603			924
Total interest expense		232			304			993			2,015
Net interest income		3,123			3,175			12,494			12,825
Provision for credit losses		(13	)		441			(1,173	)		3,806
Net interest income after provision for credit losses		3,136			2,734			13,667			9,019
Noninterest Income
Credit and debit card revenue		382			362			1,507			1,338
Corporate payment products revenue		155			126			575			497
Merchant processing services		365			311			1,449			1,261
Trust and investment management fees		483			441			1,832			1,736
Deposit service charges		193			165			724			677
Treasury management fees		152			143			614			568
Commercial products revenue		265			239			1,102			1,143
Mortgage banking revenue		298			468			1,361			2,064
Investment products fees		62			50			239			192
Securities gains (losses), net		15			34			103			177
Other		164			211			721			748
Total noninterest income		2,534			2,550			10,227			10,401
Noninterest Expense
Compensation		1,851			1,643			7,299			6,635
Employee benefits		372			302			1,429			1,303
Net occupancy and equipment		268			269			1,048			1,092
Professional services		160			123			492			430
Marketing and business development		129			105			366			318
Technology and communications		372			362			1,454			1,294
Postage, printing and supplies		71			74			274			288
Other intangibles		40			47			159			176
Other		270			439			1,207			1,833
Total noninterest expense		3,533			3,364			13,728			13,369
Income before income taxes		2,137			1,920			10,166			6,051
Applicable income taxes		459			395			2,181			1,066
Net income		1,678			1,525			7,985			4,985
Net (income) loss attributable to noncontrolling interests		(5	)		(6	)		(22	)		(26	)
Net income attributable to U.S. Bancorp		$1,673			$1,519			$7,963			$4,959
Net income applicable to U.S. Bancorp common shareholders		$1,582			$1,425			$7,605			$4,621
Earnings per common share		$1.07			$.95			$5.11			$3.06
Diluted earnings per common share		$1.07			$.95			$5.10			$3.06
Dividends declared per common share		$.46			$.42			$1.76			$1.68
Average common shares outstanding		1,483			1,507			1,489			1,509
Average diluted common shares outstanding		1,484			1,508			1,490			1,510


CONSOLIDATED ENDING BALANCE SHEET

(Dollars in Millions)	December 31, 2021			December 31, 2020
Assets
Cash and due from banks		$28,905			$62,580
Investment securities
Held-to-maturity		41,858			--
Available-for-sale		132,963			136,840
Loans held for sale		7,775			8,761
Loans
Commercial		112,023			102,871
Commercial real estate		39,053			39,311
Residential mortgages		76,493			76,155
Credit card		22,500			22,346
Other retail		61,959			57,024
Total loans		312,028			297,707
Less allowance for loan losses		(5,724	)		(7,314	)
Net loans		306,304			290,393
Premises and equipment		3,305			3,468
Goodwill		10,262			9,918
Other intangible assets		3,738			2,864
Other assets		38,174			39,081
Total assets		$573,284			$553,905

Liabilities and Shareholders’ Equity
Deposits
Noninterest-bearing		$134,901			$118,089
Interest-bearing		321,182			311,681
Total deposits		456,083			429,770
Short-term borrowings		11,796			11,766
Long-term debt		32,125			41,297
Other liabilities		17,893			17,347
Total liabilities		517,897			500,180
Shareholders’ equity
Preferred stock		6,371			5,983
Common stock		21			21
Capital surplus		8,539			8,511
Retained earnings		69,201			64,188
Less treasury stock		(27,271	)		(25,930	)
Accumulated other comprehensive income (loss)		(1,943	)		322
Total U.S. Bancorp shareholders’ equity		54,918			53,095
Noncontrolling interests		469			630
Total equity		55,387			53,725
Total liabilities and equity		$573,284			$553,905


NON-GAAP FINANCIAL MEASURES

(Dollars in Millions, Unaudited)	December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020
Total equity		$55,387			$54,378			$53,674			$52,308			$53,725
Preferred stock		(6,371	)		(5,968	)		(5,968	)		(5,968	)		(5,983	)
Noncontrolling interests		(469	)		(635	)		(635	)		(630	)		(630	)
Goodwill (net of deferred tax liability) (1)		(9,323	)		(9,063	)		(8,987	)		(8,992	)		(9,014	)
Intangible assets, other than mortgage servicing rights		(785	)		(618	)		(650	)		(675	)		(654	)
Tangible common equity (a)		38,439			38,094			37,434			36,043			37,444

Common equity tier 1 capital, determined in accordance with transitional regulatory capital requirements related to the current expected credit losses methodology implementation		41,701			41,014			39,691			39,103			38,045
Adjustments (2)		(1,733	)		(1,733	)		(1,732	)		(1,732	)		(1,733	)
Common equity tier 1 capital, reflecting the full implementation of the current expected credit losses methodology (b)		39,968			39,281			37,959			37,371			36,312

Total assets		573,284			567,495			558,886			553,375			553,905
Goodwill (net of deferred tax liability) (1)		(9,323	)		(9,063	)		(8,987	)		(8,992	)		(9,014	)
Intangible assets, other than mortgage servicing rights		(785	)		(618	)		(650	)		(675	)		(654	)
Tangible assets (c)		563,176			557,814			549,249			543,708			544,237

Risk-weighted assets, determined in accordance with prescribed regulatory capital requirements effective for the Company (d)		418,571	*		404,021			401,301			396,351			393,648
Adjustments (3)		(357	)*		(684	)		(1,027	)		(1,440	)		(1,471	)
Risk-weighted assets, reflecting the full implementation of the current expected credit losses methodology (e)		418,214	*		403,337			400,274			394,911			392,177

Ratios*
Tangible common equity to tangible assets (a)/(c)		6.8	%		6.8	%		6.8	%		6.6	%		6.9	%
Tangible common equity to risk-weighted assets (a)/(d)		9.2			9.4			9.3			9.1			9.5
Common equity tier 1 capital to risk-weighted assets, reflecting the full implementation of the current expected credit losses methodology (b)/(e)		9.6			9.7			9.5			9.5			9.3


	Three Months Ended

	December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020
Net income applicable to U.S. Bancorp common shareholders		$1,582			$1,934			$1,914			$2,175			$1,425
Intangibles amortization (net-of-tax)		32			32			32			30			37
Net income applicable to U.S. Bancorp common shareholders, excluding intangibles amortization		1,614			1,966			1,946			2,205			1,462
Annualized net income applicable to U.S. Bancorp common shareholders, excluding intangible amortization (f)		6,403			7,800			7,805			8,943			5,816

Average total equity		55,875			54,908			53,593			53,359			53,801
Average preferred stock		(6,865	)		(5,968	)		(5,968	)		(6,213	)		(6,217	)
Average noncontrolling interests		(633	)		(635	)		(631	)		(630	)		(630	)
Average goodwill (net of deferred tax liability) (1)		(9,115	)		(9,019	)		(9,003	)		(9,010	)		(9,003	)
Average intangible assets, other than mortgage servicing rights		(656	)		(632	)		(662	)		(649	)		(673	)
Average tangible common equity (g)		38,606			38,654			37,329			36,857			37,278

Return on tangible common equity (f)/(g)		16.6	%		20.2	%		20.9	%		24.3	%		15.6	%

Net interest income		$3,123			$3,171			$3,137			$3,063			$3,175
Taxable-equivalent adjustment (4)		27			26			27			26			26
Net interest income, on a taxable-equivalent basis		3,150			3,197			3,164			3,089			3,201

Net interest income, on a taxable-equivalent basis (as calculated above)		3,150			3,197			3,164			3,089			3,201
Noninterest income		2,534			2,693			2,619			2,381			2,550
Less: Securities gains (losses), net		15			20			43			25			34
Total net revenue, excluding net securities gains (losses) (h)		5,669			5,870			5,740			5,445			5,717

Noninterest expense (i)		3,533			3,429			3,387			3,379			3,364
Efficiency ratio (i)/(h)		62.3	%		58.4	%		59.0	%		62.1	%		58.8	%

*	Preliminary data. Subject to change prior to filings with applicable regulatory agencies.

(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 current expected credit losses 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 current expected credit losses 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.


NON-GAAP FINANCIAL MEASURES
	Year Ended
(Dollars in Millions, Unaudited)	December 31, 2021			December 31, 2020
Net income applicable to U.S. Bancorp common shareholders		$7,605			$4,621
Intangibles amortization (net-of-tax)		126			139
Net income applicable to U.S. Bancorp common shareholders, excluding intangibles amortization (a)		7,731			4,760
Average total equity		54,442			52,246
Average preferred stock		(6,255	)		(6,042	)
Average noncontrolling interests		(632	)		(630	)
Average goodwill (net of deferred tax liability) (1)		(9,037	)		(8,941	)
Average intangible assets, other than mortgage servicing rights		(650	)		(694	)
Average tangible common equity (b)		37,868			35,939

Return on tangible common equity (a)/(b)		20.4	%		13.2	%

Net interest income		$12,494			$12,825
Taxable-equivalent adjustment (2)		106			99
Net interest income, on a taxable-equivalent basis		12,600			12,924
Net interest income, on a taxable-equivalent basis (as calculated above)		12,600			12,924
Noninterest income		10,227			10,401
Less: Securities gains (losses), net		103			177
Total net revenue, excluding net securities gains (losses) (c)		22,724			23,148
Noninterest expense (d)		13,728			13,369
Efficiency ratio (d)/(c)		60.4	%		57.8	%

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

(2)	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.

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LINE OF BUSINESS FINANCIAL PERFORMANCE (a)
($ in millions)	Net Income Attributable												Net Income Attributable
	to U.S. Bancorp						Percent Change						to U.S. Bancorp
Business Line	4Q 2021		3Q 2021		4Q 2020		4Q21 vs 3Q21			4Q21 vs 4Q20			Full Year 2021		Full Year 2020			Percent Change
Corporate and Commercial Banking		$337		$403		$431		(16.4	)		(21.8	)		$1,626		$1,659			(2.0	)
Consumer and Business Banking		429		629		621		(31.8	)		(30.9	)		2,265		2,368			(4.3	)
Wealth Management and Investment Services		202		204		204		(1.0	)		(1.0	)		837		941			(11.1	)
Payment Services		376		410		286		(8.3	)		31.5			1,720		1,300			32.3
Treasury and Corporate Support		329		382		(23)		(13.9	)		nm			1,515		(1,309	)		nm

Consolidated Company		$1,673		$2,028		$1,519		(17.5	)		10.1			$7,963		$4,959			60.6

(a) preliminary data

Lines of Business

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. 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. 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, prior period results were restated and presented on a comparable basis.

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CORPORATE AND COMMERCIAL BANKING (a)
($ in millions)							Percent Change
	4Q 2021		3Q 2021		4Q 2020		4Q21 vs 3Q21			4Q21 vs 4Q20			Full Year 2021		Full Year 2020		Percent Change
Condensed Income Statement
Net interest income (taxable-equivalent basis)		$728		$718		$788		1.4			(7.6	)		$2,900		$3,411		(15.0	)
Noninterest income		249		253		218		(1.6	)		14.2			1,035		1,117		(7.3	)
Securities gains (losses), net		--		--		--		--			--			--		--		--
Total net revenue		977		971		1,006		.6			(2.9	)		3,935		4,528		(13.1	)
Noninterest expense		419		419		399		--			5.0			1,678		1,711		(1.9	)
Other intangibles		--		--		--		--			--			--		--		--
Total noninterest expense		419		419		399		--			5.0			1,678		1,711		(1.9	)
Income before provision and taxes		558		552		607		1.1			(8.1	)		2,257		2,817		(19.9	)
Provision for credit losses		109		15		32		nm			nm			89		604		(85.3	)
Income before income taxes		449		537		575		(16.4	)		(21.9	)		2,168		2,213		(2.0	)
Income taxes and taxable-equivalent adjustment		112		134		144		(16.4	)		(22.2	)		542		554		(2.2	)
Net income		337		403		431		(16.4	)		(21.8	)		1,626		1,659		(2.0	)
Net (income) loss attributable to noncontrolling interests		--		--		--		--			--			--		--		--
Net income attributable to U.S. Bancorp		$337		$403		$431		(16.4	)		(21.8	)		$1,626		$1,659		(2.0	)

Average Balance Sheet Data
Loans		$106,262		$102,526		$106,154		3.6			.1			$103,208		$115,563		(10.7	)
Other earning assets		4,690		4,722		4,141		(.7	)		13.3			4,537		4,163		9.0
Goodwill		1,912		1,650		1,647		15.9			16.1			1,715		1,647		4.1
Other intangible assets		4		5		6		(20.0	)		(33.3	)		5		6		(16.7	)
Assets		118,012		114,724		118,792		2.9			(.7	)		115,194		128,038		(10.0	)

Noninterest-bearing deposits		65,450		62,662		53,900		4.4			21.4			61,272		44,309		38.3
Interest-bearing deposits		75,243		68,821		81,144		9.3			(7.3	)		71,246		88,138		(19.2	)
Total deposits		140,693		131,483		135,044		7.0			4.2			132,518		132,447		.1

Total U.S. Bancorp shareholders’ equity		13,711		13,780		14,642		(.5	)		(6.4	)		13,928		15,063		(7.5	)

(a) preliminary data

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 $337 million of the Company’s net income in the fourth quarter of 2021, compared with $431 million in the fourth quarter of 2020. Total net revenue was $29 million (2.9 percent) lower due to a decrease of $60 million (7.6 percent) in net interest income, partially offset by an increase of $31 million (14.2 percent) in total noninterest income. Net interest income decreased primarily due to the impact of loan mix and related yields, as well as declining interest rates on the margin benefit from deposits, partially offset by higher deposit balances and favorable deposit mix with higher noninterest-bearing balances. Total noninterest income increased primarily due to higher capital markets, trading revenue and higher foreign currency customer activity, as well as continued stronger treasury management fees due to core growth driven by the economic recovery. Total noninterest expense increased $20 million (5.0 percent) compared with a year ago primarily due to higher production incentives related to capital markets activities and an increase in net shared services expense driven by investment in infrastructure and technology development. The provision for credit losses increased $77 million compared with the fourth quarter of 2020 primarily due to loan loss provisions supporting growth in loan balances in the current year linked quarter, partially offset by improving portfolio credit quality in the current year compared with deteriorating credit quality in the fourth quarter of 2020.

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CONSUMER AND BUSINESS BANKING (a)
($ in millions)									Percent Change
	4Q 2021			3Q 2021			4Q 2020		4Q21 vs 3Q21			4Q21 vs 4Q20			Full Year 2021			Full Year 2020		Percent Change
Condensed Income Statement
Net interest income (taxable-equivalent basis)		$1,475			$1,550			$1,518		(4.8	)		(2.8	)		$6,077			$5,759		5.5
Noninterest income		583			715			744		(18.5	)		(21.6	)		2,501			3,177		(21.3	)
Securities gains (losses), net		--			--			--		--			--			--			--		--
Total net revenue		2,058			2,265			2,262		(9.1	)		(9.0	)		8,578			8,936		(4.0	)
Noninterest expense		1,484			1,448			1,408		2.5			5.4			5,690			5,470		4.0
Other intangibles		3			3			4		--			(25.0	)		12			16		(25.0	)
Total noninterest expense		1,487			1,451			1,412		2.5			5.3			5,702			5,486		3.9
Income before provision and taxes		571			814			850		(29.9	)		(32.8	)		2,876			3,450		(16.6	)
Provision for credit losses		(1	)		(25	)		22		96.0			nm			(144	)		291		nm
Income before income taxes		572			839			828		(31.8	)		(30.9	)		3,020			3,159		(4.4	)
Income taxes and taxable-equivalent adjustment		143			210			207		(31.9	)		(30.9	)		755			791		(4.6	)
Net income		429			629			621		(31.8	)		(30.9	)		2,265			2,368		(4.3	)
Net (income) loss attributable to noncontrolling interests		--			--			--		--			--			--			--		--
Net income attributable to U.S. Bancorp		$429			$629			$621		(31.8	)		(30.9	)		$2,265			$2,368		(4.3	)

Average Balance Sheet Data
Loans		$140,863			$140,736			$145,169		.1			(3.0	)		$141,082			$141,259		(.1	)
Other earning assets		6,570			7,645			8,954		(14.1	)		(26.6	)		8,093			7,175		12.8
Goodwill		3,262			3,506			3,475		(7.0	)		(6.1	)		3,428			3,500		(2.1	)
Other intangible assets		2,966			2,754			2,137		7.7			38.8			2,760			2,105		31.1
Assets		159,549			160,785			165,290		(.8	)		(3.5	)		161,571			159,191		1.5

Noninterest-bearing deposits		34,296			34,389			33,608		(.3	)		2.0			33,855			30,467		11.1
Interest-bearing deposits		162,934			160,366			144,973		1.6			12.4			158,434			131,536		20.4
Total deposits		197,230			194,755			178,581		1.3			10.4			192,289			162,003		18.7

Total U.S. Bancorp shareholders’ equity		12,232			12,270			12,570		(.3	)		(2.7	)		12,337			12,739		(3.2	)

(a) preliminary data

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 $429 million of the Company’s net income in the fourth quarter of 2021, compared with $621 million in the fourth quarter of 2020. Total net revenue was lower by $204 million (9.0 percent) due to decreases in net interest income of $43 million (2.8 percent) and total noninterest income of $161 million (21.6 percent). Net interest income reflected lower loan balances and deposit spreads, partially offset by strong growth in deposit balances, favorable deposit mix and favorable loan spreads driven by growth in installment loans and loan mix due in part to a reduction in lower-yielding PPP loans. Total noninterest income decreased primarily due to lower mortgage banking revenue reflecting lower production volume and related gain on sale margins as refinancing activities declined, partially offset by the favorable net impact of the change in fair value of mortgage servicing rights, net of hedging activities. Deposit service charges were stronger due to stronger customer activity in the current year period. Total noninterest expense increased $75 million (5.3 percent) primarily due to increases in net shared services expense due to investments in digital capabilities and higher compensation expense from merit, business growth and revenue-related compensation driven by business production. The provision for credit losses decreased $23 million due to improved credit quality in the current year, partially offset by higher loan loss provisions supporting growth in ending loan balances in the current year linked quarter.

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WEALTH MANAGEMENT AND INVESTMENT SERVICES (a)
($ in millions)							Percent Change
	4Q 2021		3Q 2021		4Q 2020		4Q21 vs 3Q21			4Q21 vs 4Q20			Full Year 2021		Full Year 2020		Percent Change
Condensed Income Statement
Net interest income (taxable-equivalent basis)		$255		$237		$282		7.6			(9.6	)		$1,002		$1,246		(19.6	)
Noninterest income		583		558		515		4.5			13.2			2,221		2,022		9.8
Securities gains (losses), net		--		--		--		--			--			--		--		--
Total net revenue		838		795		797		5.4			5.1			3,223		3,268		(1.4	)
Noninterest expense		543		508		516		6.9			5.2			2,045		1,961		4.3
Other intangibles		4		4		3		--			33.3			14		12		16.7
Total noninterest expense		547		512		519		6.8			5.4			2,059		1,973		4.4
Income before provision and taxes		291		283		278		2.8			4.7			1,164		1,295		(10.1	)
Provision for credit losses		21		11		6		90.9			nm			47		40		17.5
Income before income taxes		270		272		272		(.7	)		(.7	)		1,117		1,255		(11.0	)
Income taxes and taxable-equivalent adjustment		68		68		68		--			--			280		314		(10.8	)
Net income		202		204		204		(1.0	)		(1.0	)		837		941		(11.1	)
Net (income) loss attributable to noncontrolling interests		--		--		--		--			--			--		--		--
Net income attributable to U.S. Bancorp		$202		$204		$204		(1.0	)		(1.0	)		$837		$941		(11.1	)

Average Balance Sheet Data
Loans		$19,614		$18,456		$16,366		6.3			19.8			$18,097		$15,456		17.1
Other earning assets		229		225		292		1.8			(21.6	)		242		287		(15.7	)
Goodwill		1,656		1,618		1,618		2.3			2.3			1,628		1,617		.7
Other intangible assets		130		80		34		62.5			nm			84		39		nm
Assets		22,895		21,568		19,281		6.2			18.7			21,236		18,564		14.4

Noninterest-bearing deposits		29,220		24,455		19,700		19.5			48.3			24,587		17,149		43.4
Interest-bearing deposits		74,192		71,842		79,873		3.3			(7.1	)		75,618		77,525		(2.5	)
Total deposits		103,412		96,297		99,573		7.4			3.9			100,205		94,674		5.8

Total U.S. Bancorp shareholders’ equity		3,318		3,172		2,973		4.6			11.6			3,154		2,936		7.4

(a) preliminary data

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 $202 million of the Company’s net income in the fourth quarter of 2021, compared with $204 million in the fourth quarter of 2020. Total net revenue increased $41 million (5.1 percent) year-over-year reflecting an increase of $68 million (13.2 percent) in noninterest income, partially offset by a decrease of $27 million (9.6 percent) in net interest income. Net interest income decreased year-over-year primarily due to the declining margin benefit of deposits, partially offset by higher noninterest-bearing deposits driving favorable deposit mix, as well as higher average loan balances. Total noninterest income increased 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. Total noninterest expense increased $28 million (5.4 percent) compared with the fourth quarter of 2020 reflecting higher compensation expense as a result of merit, performance-based incentives related to investment sales volumes and core business growth and an increase in net shared services expense. The provision for credit losses increased $15 million due to increased loan loss provisions supporting stronger balance growth in the current period compared with the prior year quarter.

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PAYMENT SERVICES (a)
($ in millions)							Percent Change
	4Q 2021		3Q 2021		4Q 2020		4Q21 vs 3Q21			4Q21 vs 4Q20			Full Year 2021		Full Year 2020		Percent Change
Condensed Income Statement
Net interest income (taxable-equivalent basis)		$617		$616		$652		.2			(5.4	)		$2,458		$2,562		(4.1	)
Noninterest income		906		946		805		(4.2	)		12.5			3,550		3,124		13.6
Securities gains (losses), net		--		--		--		--			--			--		--		--
Total net revenue		1,523		1,562		1,457		(2.5	)		4.5			6,008		5,686		5.7
Noninterest expense		855		815		832		4.9			2.8			3,231		3,123		3.5
Other intangibles		33		34		40		(2.9	)		(17.5	)		133		148		(10.1	)
Total noninterest expense		888		849		872		4.6			1.8			3,364		3,271		2.8
Income before provision and taxes		635		713		585		(10.9	)		8.5			2,644		2,415		9.5
Provision for credit losses		133		166		204		(19.9	)		(34.8	)		349		681		(48.8	)
Income before income taxes		502		547		381		(8.2	)		31.8			2,295		1,734		32.4
Income taxes and taxable-equivalent adjustment		126		137		95		(8.0	)		32.6			575		434		32.5
Net income		376		410		286		(8.3	)		31.5			1,720		1,300		32.3
Net (income) loss attributable to noncontrolling interests		--		--		--		--			--			--		--		--
Net income attributable to U.S. Bancorp		$376		$410		$286		(8.3	)		31.5			$1,720		$1,300		32.3
Average Balance Sheet Data
Loans		$32,351		$31,378		$30,992		3.1			4.4			$30,856		$31,539		(2.2	)
Other earning assets		356		5		5		nm			nm			93		5		nm
Goodwill		3,219		3,168		3,160		1.6			1.9			3,185		3,060		4.1
Other intangible assets		473		496		572		(4.6	)		(17.3	)		508		581		(12.6	)
Assets		38,281		37,173		36,508		3.0			4.9			36,553		36,497		.2
Noninterest-bearing deposits		4,247		4,913		5,836		(13.6	)		(27.2	)		4,861		4,351		11.7
Interest-bearing deposits		155		150		130		3.3			19.2			145		121		19.8
Total deposits		4,402		5,063		5,966		(13.1	)		(26.2	)		5,006		4,472		11.9
Total U.S. Bancorp shareholders’ equity		7,936		7,561		8,039		5.0			(1.3	)		7,643		7,462		2.4
(a) preliminary data

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 $376 million of the Company’s net income in the fourth quarter of 2021, compared with $286 million in the fourth quarter of 2020. Total net revenue increased $66 million (4.5 percent) primarily due to higher noninterest income of $101 million (12.5 percent), partially offset by lower net interest income of $35 million (5.4 percent). Net interest income decreased primarily due to lower loan yields driven by higher credit card payment rates and a decline in deposits related to lower prepaid card processing activities as government stimulus dissipates. Total noninterest income increased year-over-year 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 higher sales volume and higher merchant fees, partially offset by higher rebates. There was also solid growth in corporate payment products revenue driven by improving business spending across all product groups. Strong sales also drove an increase in credit and debit card revenue. Total noninterest expense increased $16 million (1.8 percent) reflecting higher net shared services expense driven by investment in infrastructure and technology development in addition to the timing of marketing campaigns, partially offset by higher incremental costs related to the prepaid card business in the fourth quarter of 2020. The provision for credit losses decreased $71 million (34.8 percent) primarily due to a pending portfolio sale and stronger credit quality in the current year.

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TREASURY AND CORPORATE SUPPORT (a)
($ in millions)									Percent Change
	4Q 2021			3Q 2021			4Q 2020		4Q21 vs 3Q21			4Q21 vs 4Q20			Full Year 2021			Full Year 2020			Percent Change
Condensed Income Statement
Net interest income (taxable-equivalent basis)		$75			$76			$(39)		(1.3	)		nm			$163			$(54	)		nm
Noninterest income		198			201			234		(1.5	)		(15.4	)		817			784			4.2
Securities gains (losses), net		15			20			34		(25.0	)		(55.9	)		103			177			(41.8	)
Total net revenue		288			297			229		(3.0	)		25.8			1,083			907			19.4
Noninterest expense		192			198			162		(3.0	)		18.5			925			928			(.3	)
Other intangibles		--			--			--		--			--			--			--			--
Total noninterest expense		192			198			162		(3.0	)		18.5			925			928			(.3	)
Income (loss) before provision and taxes		96			99			67		(3.0	)		43.3			158			(21	)		nm
Provision for credit losses		(275	)		(330	)		177		16.7			nm			(1,514	)		2,190			nm
Income (loss) before income taxes		371			429			(110)		(13.5	)		nm			1,672			(2,211	)		nm
Income taxes and taxable-equivalent adjustment		37			41			(93)		(9.8	)		nm			135			(928	)		nm
Net income (loss)		334			388			(17)		(13.9	)		nm			1,537			(1,283	)		nm
Net (income) loss attributable to noncontrolling interests		(5	)		(6	)		(6)		16.7			16.7			(22	)		(26	)		15.4
Net income (loss) attributable to U.S. Bancorp		$329			$382			$(23)		(13.9	)		nm			$1,515			$(1,309	)		nm

Average Balance Sheet Data
Loans		$3,665			$3,643			$3,627		.6			1.0			$3,722			$3,452			7.8
Other earning assets		207,935			193,989			181,737		7.2			14.4			196,211			162,503			20.7
Goodwill		--			--			--		--			--			--			--			--
Other intangible assets		--			--			--		--			--			--			--			--
Assets		233,622			219,196			208,690		6.6			11.9			221,978			188,917			17.5
Noninterest-bearing deposits		2,723			2,599			2,104		4.8			29.4			2,629			2,263			16.2
Interest-bearing deposits		1,378			1,290			1,145		6.8			20.3			1,634			2,756			(40.7	)
Total deposits		4,101			3,889			3,249		5.5			26.2			4,263			5,019			(15.1	)

Total U.S. Bancorp shareholders’ equity		18,045			17,490			14,947		3.2			20.7			16,748			14,046			19.2

(a) preliminary data

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 contributed $329 million of the Company’s net income in the fourth quarter of 2021, compared with a $23 million net loss in the fourth quarter of 2020. Total net revenue was higher by $59 million (25.8 percent) due to an increase of $114 million in net interest income, partially offset by a decrease in noninterest income of $55 million (20.5 percent). Net interest income increased primarily due to favorable funding and deposit mix and higher investment portfolio balances. The decrease in total noninterest income reflected lower other noninterest income driven by lower tax-advantaged investment syndication revenue in the fourth quarter of 2021 and lower securities gains. Total noninterest expense increased $30 million (18.5 percent) primarily due to higher compensation expense as a result of performance-based incentives, merit, and higher employee benefits driven by higher medical claims as well as higher amortization related to tax-advantaged investments. These increases were mostly offset by lower COVID-19 related accruals in the current year, including recognizing liabilities related to future delivery exposures for merchant and airline processing, and lower severance and other accruals, in addition to lower net shared services expense. The provision for credit losses decreased $452 million reflecting the residual impact of changes in the allowance for credit losses being impacted by deteriorating economic conditions in the fourth quarter of 2020 compared with improving conditions in the current year quarter. 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.

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