US Bank 2015 Annual Report Download - page 158

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. The Company provides a full
range of financial services, including lending and depository
services, cash management, capital markets, 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 subsidiary is engaged in the
general banking business, principally in domestic markets.
The subsidiary, with $310 billion in deposits at December 31,
2015, provides 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 operating in specific industries
targeted by the Company. Lending services include traditional
credit products as well as credit card services, lease 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 capital markets, 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.
Other U.S. Bancorp non-banking subsidiaries offer
investment and insurance products to the Company’s
customers principally within its markets, and fund
administration services to a broad range of mutual and other
funds.
Banking and investment services are provided through a
network of 3,133 banking offices principally operating in the
Midwest and West regions of the United States, through on-
line services and over mobile devices. The Company operates
a network of 4,936 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. Lending products
may be originated through banking offices, indirect
correspondents, brokers or other lending sources. The
Company is also one of the largest providers of 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.
Wholly-owned subsidiaries, and affiliates of Elavon, provide
similar merchant services in Canada, Mexico, Brazil and
segments of Europe directly or through joint ventures with
other financial institutions. The Company also provides
corporate trust and fund administration services in Europe.
These foreign operations are not significant to the Company.
On a full-time equivalent basis, as of December 31, 2015,
U.S. Bancorp employed 65,433 people.
Risk Factors An investment in the Company involves risk,
including the possibility that the value of the investment could
fall substantially and that dividends or other distributions on
the investment could be reduced or eliminated. Below are risk
factors that could adversely affect the Company’s financial
results and condition and the value of, and return on, an
investment in the Company.
REGULATORY AND LEGAL RISK
The Company is subject to extensive and expanding
government regulation and supervision, which can lead
to costly enforcement actions while increasing the cost
of doing business and limiting the Company’s ability to
generate revenue Federal and state regulation and
supervision has increased in recent years due to the
implementation of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (the “Dodd-Frank Act”) and other
financial reform initiatives. The Company will continue to face
such increased regulation into 2016 and in future years, as a
result of current and future initiatives intended to provide
economic stimulus, financial market stability, and
enhancement of the liquidity and solvency of financial
institutions. Banking regulations are primarily intended to
protect depositors’ funds, the federal Deposit Insurance
Fund, and the banking system as a whole, and not the
Company’s debt holders or shareholders. These regulations,
and the Company’s inability to act in certain instances without
receiving prior regulatory approval, affect the Company’s
lending practices, capital structure, investment practices,
dividend policy, ability to repurchase common stock, and
ability to pursue strategic acquisitions, among other things.
Changes to statutes, regulations or regulatory policies, or
their interpretation or implementation, and/or the continued
heightening of regulatory practices, requirements or
expectations, could affect the Company in substantial and
unpredictable ways. For example, the Office of the
Comptroller of the Currency’s (the “OCC’s”) Guidelines for
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