US Bank 2013 Annual Report Download - page 157

apply an existing standard differently, also retroactively, in
each case potentially resulting in the Company 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
customer loss, 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’s ability to pursue or complete an
attractive acquisition could be negatively impacted by
regulatory delay or other regulatory issues. 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.
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 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 third party vendors could also entail significant
delay and expense. In addition, failure of third party vendors to
handle current or higher volumes of use could adversely affect
the Company’s ability to deliver products and services to
clients and otherwise to conduct business. Technological or
financial difficulties of a third party service provider could
adversely affect the Company’s business to the extent those
difficulties result in the interruption or discontinuation of
services provided by that party.
The Company is subject to significant financial and
reputational risks from potential legal liability and
regulatory action The Company faces significant legal
risks in its business, and the volume of claims and amount of
damages and penalties claimed in litigation and regulatory
proceedings against it and other financial institutions remain
high. Increased litigation costs, substantial legal liability or
significant regulatory action against the Company could
negatively impact its financial condition and results of
operations or cause significant reputational harm to the
Company, which in turn could adversely impact its business
prospects. In addition, the Company continues to face
increased litigation risk and regulatory scrutiny. Customers
and clients have grown more litigious. The Company’s
experience with certain regulatory authorities suggests a
migration towards an increasing supervisory focus on
enforcement, including in connection with alleged violations
of law and customer harm.
The Company is exposed to risk of environmental
liability when it takes title to properties In the course
of the Company’s business, the Company may foreclose on
and take title to real estate. As a result, the Company could
be subject to environmental liabilities with respect to these
properties. The Company 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 or
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