Company: USB-PA
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0000036104-25-000055
Chunk: 104

Company: US BANCORP \DE\
Filing Date: 2025-08-07
Form: 10-Q
Item: Item 8
Chunk 104
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utures and forwardsMortgage banking revenue$1 $(2)$25 $(14)Purchased and written optionsMortgage banking revenue38 9 68 48 SwapsMortgage banking revenue/Interest expense13 9 69 (77)Foreign exchange forward contractsOther noninterest income(19)4 (17)8 Equity contractsCompensation expense27 (2)8 (2)Credit contractsCapital markets revenue(12)— 5 (2)OtherOther noninterest income(82)6 (82)(69)Customer-Related Positions     Interest rate contracts     SwapsCapital markets revenue47 89 82 220 Purchased and written optionsCapital markets revenue2 (21)14 (68)FuturesCapital markets revenue1 — 2 — Foreign exchange rate contracts     Forwards, spots and swapsCapital markets revenue66 32 114 56 Purchased and written optionsCapital markets revenue— — 1 — Commodity contracts     SwapsCapital markets revenue(43)(1)4 1 Purchased and written optionsCapital markets revenue15 2 14 4 FuturesCapital markets revenue45 6 4 6 Credit contractsCapital markets revenue(8)1 (6)— Derivatives are subject to credit risk associated with counterparties to the derivative contracts. The Company measures that credit risk using a credit valuation adjustment and includes it within the fair value of the derivative. The Company manages counterparty credit risk through diversification of its derivative positions among various counterparties, by entering into derivative positions that are centrally cleared through clearinghouses, by entering into master netting arrangements and, where possible, by requiring collateral arrangements. A master netting arrangement allows two counterparties, who have multiple derivative contracts with each other, the ability to net settle amounts under all contracts, including any related collateral, through a single payment and in a single currency. Collateral arrangements generally require the counterparty to deliver collateral (typically cash or U.S. Treasury and agency securities) equal to the Company’s net derivative receivable, subject to minimum transfer and credit rating requirements. 

The Company’s collateral arrangements are predominately bilateral and, therefore, contain provisions that require collateralization of the Company’s net liability derivative positions. Required collateral coverage is based on net liability thresholds and may be contingent upon the Company’s credit rating from two of the nationally recognized statistical rating organizations. If the Company’s credit