Company: USB-PA
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0000036104-25-000028
Chunk: 77

Company: US BANCORP \DE\
Filing Date: 2025-05-06
Form: 10-Q
Item: Item 8
Chunk 77
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 MSR value associated with changes in market interest rates, including estimated prepayment rates and anticipated earnings on escrow deposits. (b)Includes changes in MSR value not caused by changes in market interest rates, such as changes in assumed cost to service, ancillary income and option adjusted spread, as well as the impact of any model changes. (c)Primarily the change in MSR value from passage of time and cash flows realized (decay), but also includes the impact of changes to expected cash flows not associated with changes in market interest rates, such as the impact of delinquencies. The estimated sensitivity to changes in interest rates of the fair value of the MSR portfolio and the related derivative instruments was as follows:  March 31, 2025December 31, 2024(Dollars in Millions)Down 100 bps Down 50 bps Down 25 bps Up 25 bps Up 50 bps Up 100 bps Down 100 bps Down 50 bps Down 25 bps Up 25 bps Up 50 bps Up 100 bps MSR portfolio$(343)$(161)$(78)$71 $137 $250 $(310)$(144)$(69)$63 $120 $217 Derivative instrument hedges33315877(69)(128)(226)32514769(61)(118)(220)Net sensitivity$(10)$(3)$(1)$2 $9 $24 $15 $3 $— $2 $2 $(3)The fair value of MSRs and their sensitivity to changes in interest rates is influenced by the mix of the servicing portfolio and characteristics of each segment of the portfolio. The Company’s servicing portfolio consists of the distinct portfolios of government-insured mortgages, conventional mortgages and Housing Finance Agency (“HFA”) mortgages. The servicing portfolios are predominantly comprised of fixed-rate agency loans with limited adjustable-rate or jumbo mortgage loans. The HFA servicing portfolio is comprised of loans originated under state and local housing authority program guidelines which assist purchases by first-time or low- to moderate-income homebuyers through a favorable rate subsidy, down payment and/or closing cost assistance on government- and conventional-insured mortgages. 

U.S. Bancorp47

The following table provides a summary of the Company’s MSRs and related characteristics by portfolio:  March 31, 2025December 31, 2024(Dollars in Millions)HFA Government Conventional(d