US Bank 2013 Annual Report Download - page 158

toxic substances or chemical releases at a property. The
costs associated with investigation or remediation activities
could be substantial. In addition, if the Company is the owner
or former owner of a contaminated site, it may be subject to
common law claims by third parties based on damages and
costs resulting from environmental contamination emanating
from the property. If the Company becomes subject to
significant environmental liabilities, its financial condition and
results of operations could be adversely affected.
The Company’s business and financial performance
could be adversely affected, directly or indirectly, by
disasters, by terrorist activities or by international
hostilities Neither the occurrence nor the potential impact
of disasters, terrorist activities or international hostilities can
be predicted. However, these occurrences could impact the
Company directly (for example, by interrupting the
Company’s systems, which could prevent the Company from
obtaining deposits, originating loans and processing and
controlling its flow of business, causing significant damage
to the Company’s facilities or otherwise preventing the
Company from conducting business in the ordinary course),
or indirectly as a result of their impact on the Company’s
borrowers, depositors, other customers, suppliers or other
counterparties (for example, by damaging properties
pledged as collateral for the Company’s loans or impairing
the ability of certain borrowers to repay their loans). The
Company could also suffer adverse consequences to the
extent that disasters, terrorist activities or international
hostilities affect the financial markets or the economy in
general or in any particular region. These types of impacts
could lead, for example, to an increase in delinquencies,
bankruptcies or defaults that could result in the Company
experiencing higher levels of nonperforming assets, net
charge-offs and provisions for credit losses.
The Company’s ability to mitigate the adverse
consequences of these occurrences is in part dependent on
the quality of the Company’s resiliency planning, and the
Company’s ability, if any, to anticipate the nature of any such
event that occurs. The adverse impact of disasters, terrorist
activities or international hostilities also could be increased to
the extent that there is a lack of preparedness on the part of
national or regional emergency responders or on the part of
other organizations and businesses that the Company
transacts with, particularly those that it depends upon, but
has no control over. Additionally, the nature and level of
natural disasters may be exacerbated by global climate
change.
The Company relies on dividends from its
subsidiaries for its liquidity needs The Company is a
separate and distinct legal entity from its bank and non-bank
subsidiaries. The Company receives a significant portion of
its cash from dividends paid by its subsidiaries. These
dividends are the principal source of funds to pay dividends
on the Company’s stock and interest and principal on its
debt. Various federal and state laws and regulations limit the
amount of dividends that its bank and certain of its non-bank
subsidiaries may pay to the Company without regulatory
approval. Also, the Company’s right to participate in a
distribution of assets upon a subsidiary’s liquidation or
reorganization is subject to prior claims of the subsidiary’s
creditors, except to the extent that any of the Company’s
claims as a creditor of that subsidiary may be recognized.
The Company has non-banking businesses that are
subject to various risks and uncertainties The
Company is a diversified financial services company, and
the Company’s business model is based on a mix of
businesses that provide a broad range of products and
services delivered through multiple distribution channels. In
addition to banking, the Company provides payment
services, investments, mortgages and corporate and
personal trust services. Although the Company believes its
diversity helps lessen the effect of downturns in any one
segment of its industry, it also means the Company’s
earnings could be subject to various specific risks and
uncertainties related to these non-banking businesses.
The Company’s stock price can be volatile The
Company’s stock price can fluctuate widely in response to a
variety of factors, including:
• actual or anticipated variations in the Company’s quarterly
operating results;
• recommendations by securities analysts;
• significant acquisitions or business combinations;
• strategic partnerships, joint ventures or capital
commitments by, or involving, the Company or the
Company’s competitors;
• operating and stock price performance of other
companies that investors deem comparable to the
Company;
• new technology used or services offered by the
Company’s competitors;
• news reports relating to trends, concerns and other issues
in the financial services industry; and
• changes in government regulations.
General market fluctuations, industry factors and general
economic and political conditions and events, as well as
interest rate changes, currency fluctuations, or unforeseen
events such as terrorist attacks could cause the Company’s
stock price to decrease regardless of the Company’s
operating results.
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