US Bank 2011 Annual Report Download - page 136

Company Information
General Business Description U.S. Bancorp is a multi-state
financial services holding company headquartered in
Minneapolis, Minnesota. U.S. Bancorp was incorporated in
Delaware in 1929 and operates as a financial holding
company and a bank holding company under the Bank
Holding Company Act of 1956. U.S. Bancorp provides a full
range of financial services, including lending and depository
services, cash management, foreign exchange and trust and
investment management services. It also engages in credit card
services, merchant and ATM processing, mortgage banking,
insurance, brokerage and leasing.
U.S. Bancorp’s banking subsidiaries are engaged in the
general banking business, principally in domestic markets. The
subsidiaries range in size from $53 million to $236 billion in
deposits and provide a wide range of products and services to
individuals, businesses, institutional organizations, governmental
entities and other financial institutions. Commercial and
consumer lending services are principally offered to customers
within the Company’s domestic markets, to domestic customers
with foreign operations and to large national customers focusing
on specific targeted industries. Lending services include
traditional credit products as well as credit card services, leasing
financing and import/export trade, asset-backed lending,
agricultural finance and other products. Depository services
include checking accounts, savings accounts and time certificate
contracts. Ancillary services such as foreign exchange, treasury
management and receivable lock-box collection are provided to
corporate customers. U.S. Bancorp’s bank and trust subsidiaries
provide a full range of asset management and fiduciary services
for individuals, estates, foundations, business corporations and
charitable organizations.
U.S. Bancorp’s non-banking subsidiaries primarily offer
investment and insurance products to the Company’s
customers principally within its markets, and mutual fund
processing services to a broad range of mutual funds.
Banking and investment services are provided through a
network of 3,085 banking offices principally operating in the
Midwest and West regions of the United States. The Company
operates a network of 5,053 ATMs and provides 24-hour,
seven day a week telephone customer service. Mortgage
banking services are provided through banking offices and
loan production offices throughout the Company’s markets.
Consumer lending products may be originated through
banking offices, indirect correspondents, brokers or other
lending sources, and a consumer finance division. The
Company is also one of the largest providers of Visa®
corporate and purchasing card services and corporate trust
services in the United States. A wholly-owned subsidiary,
Elavon, Inc. (“Elavon”), provides merchant processing
services directly to merchants and through a network of
banking affiliations. Affiliates of Elavon provide similar
merchant services in Canada, Mexico, Brazil and segments of
Europe. The Company also provides trust services in Europe.
These foreign operations are not significant to the Company.
On a full-time equivalent basis, as of December 31, 2011,
U.S. Bancorp employed 62,529 people.
Risk Factors The following factors may adversely affect the
Company’s business, financial results or stock price.
Industry Risk Factors
Difficult business and economic conditions may continue
to adversely affect the financial services industry The
Company’s business activities and earnings are affected by
general business conditions in the United States and abroad.
Although, the domestic and global economies generally have
increasingly stabilized from the dramatic downturn
experienced in 2008 and 2009, and the financial markets have
generally improved, business activities across a range of
industries continue to face serious difficulties due to the lack
of consumer spending and the lack of liquidity in the global
credit markets. Heightened credit levels have further increased
these difficulties. A continuation or worsening of current
financial market conditions could materially and adversely
affect the Company’s business, financial condition, results of
operations, access to credit or the trading price of the
Company’s common stock. Additionally, certain European
countries have experienced credit deterioration primarily due
to excessive debt levels, poor economic conditions, and fiscal
disorder. Deterioration in economic conditions in Europe
could slow the recovery of the domestic economy or
negatively impact the Company’s borrowers or other
counterparties that have direct or indirect exposure to Europe.
Further, dramatic declines in the housing and commercial real
estate markets over the past several years, with falling real
estate prices, increasing foreclosures and high unemployment,
continue to negatively impact the credit performance of real
estate related loans and have resulted in, and may continue to
result in, significant write-downs of asset values by the
Company and other financial institutions. These write-downs
have caused many financial institutions to seek additional
capital, to reduce or eliminate dividends, to merge with larger
and stronger institutions and, in some cases, to fail.
Additional negative market developments may further erode
consumer confidence levels and may cause adverse changes in
payment patterns, causing increases in delinquencies and
default rates. As was the case in 2008 and 2009, such
developments could increase the Company’s charge-offs and
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