US Bank 2007 Annual Report Download - page 120

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 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.
Difficulty in integrating an acquired business or
company may cause the Company not to realize expected
revenue increases, cost savings, increases in geographic or
product presence, and/or other projected benefits from the
acquisition. 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. In determining whether to approve a proposed
bank acquisition, federal bank regulators will consider,
among other factors, the effect of the acquisition on the
competition, financial condition, and future prospects. The
regulators also review current and projected capital ratios
and levels, the competence, experience, and integrity of
management and its record of compliance with laws and
regulations, the convenience and needs of the communities
to be served (including the acquiring institution’s record of
compliance under the Community Reinvestment Act) and
the effectiveness of the acquiring institution in combating
money laundering activities. In addition, 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.
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.
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.
Significant legal actions could subject the Company to
substantial uninsured liabilities The Company is from time
to time subject to claims related to its operations. These
claims and legal actions, including supervisory actions by the
Company’s regulators, could involve large monetary claims
and significant defense costs. To protect itself from the cost
of these claims, the Company maintains insurance coverage
in amounts and with deductibles that it believes are
appropriate for its operations. However, the Company’s
insurance coverage may not cover all claims against the
Company or continue to be available to the Company at a
reasonable cost. As a result, the Company may be exposed
to substantial uninsured liabilities, which could adversely
affect the Company’s results of operations and financial
condition.
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
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