US Bank 2012 Annual Report Download - page 149

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 subsidiaries are engaged in the
general banking business, principally in domestic markets.
The subsidiaries range in size from $51 million to $254 billion
in deposits and provide 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 focusing on specific targeted industries.
Lending services include traditional credit products as well as
credit card services, leasing 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.
U.S. Bancorp’s non-banking subsidiaries primarily offer
investment and insurance products to the Company’s
customers principally within its markets, and fund processing
services to a broad range of mutual and other funds.
Banking and investment services are provided through a
network of 3,084 banking offices principally operating in the
Midwest and West regions of the United States. The Company
operates a network of 5,065 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 Visa®
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. Affiliates of Elavon provide similar
merchant services in Canada, Mexico, Brazil and segments of
Europe. The Company also provides trust services in Europe.
These foreign operations are not significant to the Company.
On a full-time equivalent basis, as of December 31, 2012,
U.S. Bancorp employed 64,486 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. There may be other factors not
discussed below or elsewhere that could adversely affect the
Company’s financial results and condition.
Industry Risk Factors
Difficult business and economic conditions may continue to
adversely affect the financial services industry The Company’s
business activities and earnings are affected by general
business conditions in the United States and abroad, including
factors such as the level and volatility of short-term and long-
term interest rates, inflation, home prices, unemployment and
under-employment levels, bankruptcies, household income,
consumer spending, fluctuations in both debt and equity
capital markets, liquidity of the global financial markets, the
availability and cost of capital and credit, investor sentiment
and confidence in the financial markets, and the strength of
the domestic and global economies in which the Company
operates. The deterioration of any of these conditions can
adversely affect the Company’s consumer and commercial
businesses and securities portfolios, its level of charge-offs and
provision for credit losses, its capital levels and liquidity, and
its results of operations.
Although the domestic economy continued its modest
recovery in 2012, elevated unemployment, under-employment
and household debt, along with continued stress in the
consumer real estate market and certain commercial real
estate markets, pose challenges to domestic economic
performance and the financial services industry. The sustained
high unemployment rate and the lengthy duration of
unemployment have directly impaired consumer finances and
pose risks to the financial services industry. The housing
market remains weak and elevated levels of distressed and
delinquent mortgages pose further risks to the housing
market. The declines in the housing and commercial real
estate markets, with falling real estate prices, increasing
foreclosures and high unemployment, continue to negatively
impact the credit performance of real estate related loans and
U.S. BANCORP 145