Company: USB-PA
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0000036104-25-000064
Chunk: 217

Company: US BANCORP \DE\
Filing Date: 2025-11-05
Form: 10-Q
Chunk 217
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            |     | Capital markets revenue                   |                    |   1 |      |   |   1 |      |                   |  15 |      |   |   5 |      |
| Futures                                  |     | Capital markets revenue                   |                    |  35 |      |   |   4 |      |                   |  39 |      |   |  10 |      |
| Credit contracts                         |     | Capital markets revenue                   |                    |  -4 |      |   |  -3 |      |                   | -10 |      |   |  -3 |      |

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 rating were to fall below credit ratings thresholds established in the collateral arrangements, the counterparties to the derivatives could request immediate additional collateral coverage up to and including full collateral coverage for derivatives in a net liability position. The aggregate fair value of all derivatives under collateral arrangements that were in a net liability position at September 30, 2025, was $ 1.9billion. At September 30, 2025, the Company had $ 1.7billion of cash posted as collateral against this net liability position.

| U.S. Bancorp |     | 61 |

| NOTE 13 |     | Netting Arrangements for Certain Financial Instruments and Securities |
|         |     | Financing Activities                                                  |

The Company’s