US Bank 2011 Annual Report Download - page 142

asset balances; or significantly increase its accrued taxes
liability. For more information, refer to “Critical Accounting
Policies” in this Annual Report.
Changes in accounting standards could materially impact
the Company’s financial statements From time to time, the
Financial Accounting Standards Board changes the financial
accounting and reporting standards that govern the
preparation of the Company’s financial statements. These
changes can be hard to predict and can materially impact how
the Company records and reports its financial condition and
results of operations. In some cases, the Company could be
required to apply a new or revised standard retroactively,
resulting in the Company’s restating prior period financial
statements.
Acquisitions may not produce revenue enhancements or
cost savings at levels or within timeframes originally
anticipated and may result in unforeseen integration
difficulties and dilution to existing shareholders The
Company regularly explores opportunities to acquire financial
services businesses or assets and may also consider
opportunities to acquire other banks or financial institutions.
The Company cannot predict the number, size or timing of
acquisitions.
There can be no assurance that the Company’s
acquisitions will have the anticipated positive results,
including results related to expected revenue increases, cost
savings, increases in geographic or product presence, and/or
other projected benefits from the acquisition. Integration
efforts could divert management’s attention and resources,
which could adversely affect the Company’s operations or
results. The integration could result in higher than expected
deposit attrition (run-off), loss of key employees, disruption of
the Company’s business or the business of the acquired
company, or otherwise adversely affect the Company’s ability
to maintain relationships with customers and employees or
achieve the anticipated benefits of the acquisition. Also, the
negative effect of any divestitures required by regulatory
authorities in acquisitions or business combinations may be
greater than expected.
The Company must generally receive federal regulatory
approval before it can acquire a bank or bank holding
company. The Company cannot be certain when or if, or on
what terms and conditions, any required regulatory approvals
will be granted. The Company may be required to sell banks
or branches as a condition to receiving regulatory approval.
Future acquisitions could be material to the Company
and it may issue additional shares of stock to pay for those
acquisitions, which would dilute current shareholders’
ownership interests.
If new laws were enacted that restrict the ability of the
Company and its subsidiaries to share information about
customers, the Company’s financial results could be
negatively affected The Company’s business model depends
on sharing information among the family of companies owned
by U.S. Bancorp to better satisfy the Company’s customer
needs. Laws that restrict the ability of the companies owned
by U.S. Bancorp to share information about customers could
negatively affect the Company’s revenue and profit.
The Company’s business could suffer if the Company fails
to attract and retain skilled people The Company’s success
depends, in large part, on its ability to attract and retain key
people. Competition for the best people in most activities the
Company engages in can be intense. The Company may not
be able to hire the best people or to keep them. Recent strong
scrutiny of compensation practices has resulted and may
continue to result in additional regulation and legislation in
this area as well as additional legislative and regulatory
initiatives, and there is no assurance that this will not cause
increased turnover or impede the Company’s ability to retain
and attract the highest caliber employees.
The Company relies on other companies to provide key
components of the Company’s business infrastructure
Third party vendors provide key components of the
Company’s business infrastructure, such as internet
connections, network access and mutual fund distribution.
While the Company has selected these third party vendors
carefully, it does not control their actions. Any problems
caused by these third parties, including as a result of their not
providing the Company their services for any reason or their
performing their services poorly, could adversely affect the
Company’s ability to deliver products and services to the
Company’s customers and otherwise to conduct its business.
Replacing these third party vendors could also entail
significant delay and expense.
The Company has risk related to legal proceedings The
Company is involved in judicial, regulatory and arbitration
proceedings concerning matters arising from its business
activities. The Company establishes reserves for legal claims
when payments associated with the claims become probable
and the costs can be reasonably estimated. The Company may
still incur legal costs for a matter even if it has not established
a reserve. In addition, the actual cost of resolving a legal claim
may be substantially higher than any amounts reserved for
that matter. The ultimate resolution of any pending or future
legal proceeding, depending on the remedy sought and
granted, could materially adversely affect the Company’s
results of operations and financial condition.
140 U.S. BANCORP