US Bank 2008 Annual Report Download - page 123

National banks are subject to the supervision of, and
are examined by, the Comptroller of the Currency. All
subsidiary banks of the Company are members of the
Federal Deposit Insurance Corporation (“FDIC”) and are
subject to examination by the FDIC. In practice, the primary
federal regulator makes regular examinations of each
subsidiary bank subject to its regulatory review or
participates in joint examinations with other federal
regulators. Areas subject to regulation by federal authorities
include the allowance for credit losses, investments, loans,
mergers, issuance of securities, payment of dividends,
establishment of branches and other aspects of operations.
Website Access to SEC Reports U.S. Bancorp’s internet
website can be found at usbank.com. U.S. Bancorp makes
available free of charge on its website its annual reports on
Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K, and amendments to those reports filed or
furnished pursuant to Section 13 or 15(d) of the Exchange
Act, as well as all other reports filed by U.S. Bancorp with
the SEC, as soon as reasonably practicable after
electronically filed with, or furnished to, the SEC.
Certifications U.S. Bancorp has filed as exhibits to its annual
report on Form 10-K the Chief Executive Officer and Chief
Financial Officer certifications required by Section 302 of
the Sarbanes-Oxley Act. U.S. Bancorp has also submitted the
required annual Chief Executive Officer certification to the
New York Stock Exchange.
Risk Factors There are a number of factors, including those
specified below, that may adversely affect the Company’s
business, financial results or stock price. Additional risks
that the Company currently does not know about or
currently views as immaterial may also impair the
Company’s business or adversely impact its financial results
or stock price.
Industry Risk Factors
The Company’s business and financial results are
significantly affected by general business and economic
conditions The Company’s business activities and earnings
are affected by general business conditions in the United
States and abroad. The domestic and global economies have
seen a dramatic downturn during the past year or more,
with negative effects on the business, financial condition and
results of operations of financial institutions in the United
States and other countries. Dramatic declines in the housing
market over the past two years, with falling home prices and
increasing foreclosures and unemployment, have negatively
impacted the credit performance of real estate related loans
and resulted in significant write-downs of asset values by
financial institutions. These write-downs, initially of asset-
backed securities but spreading to other securities and loans,
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.
Reflecting concern about the stability of the financial
markets generally and the strength of counterparties, many
lenders and institutional investors have reduced or ceased
providing funding to borrowers, including to other financial
institutions. This market turmoil and tightening of credit
have led to an increased level of commercial and consumer
delinquencies, lack of consumer confidence, increased
market volatility and widespread reduction of business
activity generally. Market developments may further erode
consumer confidence levels and may cause adverse changes
in payment patterns, causing increases in delinquencies and
default rates, which may impact the Company’s charge-offs
and provision for credit losses. Continuing economic
deterioration that affects household and/or corporate
incomes could also result in reduced demand for credit or
fee-based products and services. In addition, changes in
securities market conditions and monetary fluctuations could
adversely affect the availability and terms of funding
necessary to meet the Company’s liquidity needs. A
worsening of these conditions would likely exacerbate the
adverse effects of these difficult market conditions on the
Company and others in the financial institutions industry.
The Company could experience an unexpected inability to
obtain needed liquidity The Company’s liquidity could be
constrained by an unexpected inability to access the capital
markets due to a variety of market dislocations or
interruptions. If the Company is unable to meet its funding
needs on a timely basis, its business would be adversely
affected.
Current levels of market volatility are unprecedented The
market for certain investment securities has become highly
volatile or inactive, and may not stabilize or resume in the
near term. This volatility has resulted in significant
fluctuations in the prices of those securities, and additional
market volatility may continue to adversely affect the
Company’s results of operations.
Changes in the domestic interest rate environment could
reduce the Company’s net interest income The operations
of financial institutions such as the Company are dependent
to a large degree on net interest income, which is the
difference between interest income from loans and
investments and interest expense on deposits and
borrowings. An institution’s net interest income is
significantly affected by market rates of interest, which in
turn are affected by prevailing economic conditions, by the
fiscal and monetary policies of the federal government and
by the policies of various regulatory agencies. Like all
financial institutions, the Company’s balance sheet is
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