Regions Bank 2009 Annual Report Download - page 44

these third parties, including those resulting from disruptions in communication services provided by a vendor,
failure of a vendor to handle current or higher volumes, failure of a vendor to provide services for any reason or
poor performance of services, could adversely affect our ability to deliver products and services to our customers
and otherwise conduct our business. Financial or operational difficulties of a third party vendor could also hurt
our operations if those difficulties interfere with the vendor’s ability to serve us. Replacing these third party
vendors could also create significant delay and expense. Accordingly, use of such third parties creates an
unavoidable inherent risk to our business operations.
Our reported financial results depend on management’s selection of accounting methods and certain
assumptions and estimates.
Our accounting policies and assumptions are fundamental to our reported financial condition and results of
operations. Our management must exercise judgment in selecting and applying many of these accounting policies
and methods so they comply with generally accepted accounting principles and reflect management’s judgment
of the most appropriate manner to report our financial condition and results. In some cases, management must
select the accounting policy or method to apply from two or more alternatives, any of which may be reasonable
under the circumstances, yet may result in our reporting materially different results than would have been
reported under a different alternative.
Certain accounting policies are critical to presenting our reported financial condition and results. They
require management to make difficult, subjective or complex judgments about matters that are uncertain.
Materially different amounts could be reported under different conditions or using different assumptions or
estimates. These critical accounting policies include: the allowance for credit losses; intangible assets; mortgage
servicing rights; and income taxes. Because of the uncertainty of estimates involved in these matters, we may be
required to do one or more of the following: significantly increase the allowance for credit losses and/or sustain
credit losses that are significantly higher than the reserve provided; recognize significant impairment on our
goodwill and other intangible asset balances; or significantly increase our accrued tax liability.
Changes in our accounting policies or in accounting standards could materially affect how we report our
financial results and condition.
From time to time, the Financial Accounting Standards Board and SEC change the financial accounting and
reporting standards that govern the preparation of our financial statements. These changes can be hard to predict
and can materially impact how we record and report our financial condition and results of operations. In some
cases, we could be required to apply a new or revised standard retroactively, resulting in us restating prior period
financial statements.
We depend on the accuracy and completeness of information about clients and counterparties.
In deciding whether to extend credit or enter into other transactions with clients and counterparties, we may
rely on information furnished by or on behalf of clients and counterparties, including financial statements and
other financial information. We also may rely on representations of clients and counterparties as to the accuracy
and completeness of that information and, with respect to financial statements, on reports of independent auditors
if made available. If this information is inaccurate, we may be subject to regulatory action, reputational harm or
other adverse effects on the operation of our business, our financial condition and our results of operations.
We are exposed to risk of environmental liability when we take title to property.
In the course of our business, we may foreclose on and take title to real estate. As a result, we could be
subject to environmental liabilities with respect to these properties. We may be held liable to a governmental
entity or to third parties for property damage, personal injury, investigation and clean-up costs incurred by these
parties in connection with environmental contamination or may be required to investigate or clean-up hazardous
30