Company: USB-PA
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0000036104-25-000028
Chunk: 28

Company: US BANCORP \DE\
Filing Date: 2025-05-06
Form: 10-Q
Item: Item 7
Chunk 28
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 and deploying investment portfolio, funding and derivative strategies.

TABLE 9Sensitivity of Net Interest Income

March 31, 2025December 31, 2024Down 50 bps ImmediateUp 50 bps ImmediateDown 200 bps ImmediateUp 200 bps ImmediateDown 50 bps ImmediateUp 50 bps ImmediateDown 200 bps ImmediateUp 200 bps ImmediateNet interest income.26 %.15 %.14 %.95 %.25 %.17 %.01 %1.05 %

U.S. Bancorp19

Table 9 summarizes the projected impact to net interest income over the next 12 months of various potential interest rate changes. The sensitivity of the projected impact to net interest income over the next 12 months is dependent on balance sheet growth, product mix, customer behavior, deposit pricing and funding decisions. From December 31, 2024 to March 31, 2025, interest rate sensitivity to higher and lower rates was largely unchanged. As of March 31, 2025, the Company continues to be asset sensitive to a parallel upward move in interest rates with most of that impact coming from the long end of the yield curve. Net interest income simulation incorporates rate-sensitive deposit behavior that could result in changes in both projected deposit balances and mix under the various interest rate scenarios. Higher rate scenarios result in disintermediation of bank deposits and a mix shift into higher yielding deposits. Conversely, in lower rate scenarios, the analysis assumes that deposits will shift into lower yielding products. While the Company utilizes models and assumptions based on historical information and expected behaviors, actual outcomes could vary significantly. For larger interest rate shock scenarios, mortgage assets and deposits are expected to behave in a non-linear manner resulting in varying impacts to net interest income in those scenarios.Use of Derivatives to Manage Interest Rate and Other Risks To manage the sensitivity of earnings and capital to interest rate, prepayment, credit, price and foreign currency fluctuations (asset and liability management positions), the Company enters into derivative transactions. The Company uses derivatives for asset and liability management purposes primarily in the following ways: •To convert fixed-rate debt and available-for-sale investment securities from fixed-rate payments to floating-rate payments; •To convert floating-rate loans and debt from floating-rate payments to fixed-rate payments; •To mitigate changes in value of the Company’s unfunded mortgage loan commitments, funded MLHFS and MSRs; •To mitigate remeasurement volatility of foreign currency denominated balances; and •To