US Bank 2015 Annual Report Download - page 167

which the Company and financial services industry are highly
dependent, could present operational issues and require
capital spending. The Company’s ability to compete
successfully depends on a number of factors, including,
among others, its ability to develop and execute strategic
plans and initiatives; developing, maintaining and building
long-term customer relationships based on quality service,
competitive prices, high ethical standards and safe, sound
assets; and industry and general economic trends. A failure to
compete effectively could contribute to downward price
pressure on the Company’s products or services or a loss of
market share.
The Company may need to lower prices on existing
products and services and develop and introduce new
products and services to maintain market share The
Company’s success depends, in part, on its ability to adapt
its products and services to evolving industry standards.
There is increasing pressure to provide products and services
at lower prices. Lower prices can reduce the Company’s net
interest margin and revenues from its fee-based products and
services. In addition, the widespread adoption of new
technologies, including internet services and mobile devices,
such as mobile phones and tablet computers, could require
the Company to make substantial expenditures to modify or
adapt its existing products and services. Also, these and
other capital investments in the Company’s businesses may
not produce expected growth in earnings anticipated at the
time of the expenditure. The Company might not be
successful in developing or introducing new products and
services, adapting to changing customer preferences and
spending and saving habits, achieving market acceptance of
its products and services, or sufficiently developing and
maintaining loyal customer relationships.
The Company’s business could suffer if it fails to attract
and retain skilled employees The Company’s success
depends, in large part, on its ability to attract and retain key
employees. 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. Recent
strong scrutiny of compensation practices has resulted in,
and may continue to result in, additional regulation and
legislation in this area, as well as additional legislative and
regulatory initiatives. There is no assurance that this will not
cause increased turnover or impede the Company’s ability to
retain and attract the highest caliber employees.
The Company may not be able to complete future
acquisitions, and completed acquisitions may not
produce revenue enhancements or cost savings at
levels or within timeframes originally anticipated, may
result in unforeseen integration difficulties, and may
dilute existing shareholders’ interests 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 it
might pursue.
The Company must generally receive federal regulatory
approval before it can acquire a bank or bank holding
company. The Company’s ability to pursue or complete an
attractive acquisition could be negatively impacted by
regulatory delay or other regulatory issues. The Company
cannot be certain when or if, or on what terms and
conditions, any required regulatory approvals will be granted.
For example, the Company may be required to sell branches
as a condition to receiving regulatory approval. If the
Company commits certain regulatory violations, including
those that result in a downgrade in certain of the Company’s
bank regulatory ratings, governmental authorities could, as a
consequence, preclude it from pursuing future acquisitions for
a period of time.
There can be no assurance that acquisitions the Company
completes will have the anticipated positive results, including
results related to expected revenue increases, cost savings,
increases in geographic or product presence, and/or other
projected benefits. Integration efforts could divert
management’s attention and resources, which could
adversely affect the Company’s operations or results. The
integration could result in higher than expected customer
loss, deposit attrition, loss of key employees, disruption of the
Company’s businesses or the businesses 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. In addition, future acquisitions may
also expose the Company to increased legal or regulatory
risks. Finally, future acquisitions could be material to the
Company, and it may issue additional shares of stock to pay
for those acquisitions, which would dilute current
shareholders’ ownership interests.
ACCOUNTING AND TAX RISK
The Company’s reported financial results depend on
management’s selection of accounting methods and
certain assumptions and estimates, which, if incorrect,
could cause unexpected losses in the future The
Company’s accounting policies and methods are fundamental
to how the Company records and reports its financial
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