Regions Bank 2011 Annual Report Download - page 57

exposure to these matters remains heightened because of, among other things, the evolving nature of these threats
and the prevalence of Internet and mobile banking. As cyber threats continue to evolve, we may be required to
expend significant additional resources to continue to modify or enhance our protective measures or to
investigate and remediate any information security vulnerabilities. Disruptions or failures in the physical
infrastructure or operating systems that support our businesses and customers, or cyber attacks or security
breaches of the networks, systems or devices that our customers use to access our products and services could
result in customer attrition, regulatory fines, penalties or intervention, reputational damage, reimbursement or
other compensation costs, and/or additional compliance costs, any of which could materially adversely affect our
business, results of operations or financial condition.
We rely on other companies to provide key components of our business infrastructure.
Third parties provide key components of our business operations such as data processing, recording and
monitoring transactions, online banking interfaces and services, Internet connections and network access. While
we have selected these third party vendors carefully, we do not control their actions. Any problems caused by
these third parties, including those resulting from disruptions in communication services provided by a vendor,
failure of a vendor to handle current or higher volumes, or failure of a vendor to provide services for any reason
or poor performance of services, could adversely affect our ability to deliver products and services to our
customers and otherwise conduct our business. Financial or operational difficulties of a third party vendor could
also hurt our operations if those difficulties interfere with the vendor’s ability to serve us. Replacing these third
party vendors could also create significant delay and expense. Accordingly, use of such third parties creates an
unavoidable inherent risk to our business operations.
We depend on the accuracy and completeness of information about clients and counterparties.
In deciding whether to extend credit or enter into other transactions with clients and counterparties, we may
rely on information furnished by or on behalf of clients and counterparties, including financial statements and
other financial information. We also may rely on representations of clients and counterparties as to the accuracy
and completeness of that information and, with respect to financial statements, on reports of independent auditors
if made available. If this information is inaccurate, we may be subject to regulatory action, reputational harm or
other adverse effects with respect to the operation of our business, our financial condition and our results of
operations.
We are exposed to risk of environmental liability when we take title to property.
In the course of our business, we may foreclose on and take title to real estate. As a result, we could be
subject to environmental liabilities with respect to these properties. We 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 hazardous
or toxic substances or chemical releases at a property. The costs associated with investigation or remediation
activities could be substantial. In addition, if we are the owner or former owner of a contaminated site, we may
be subject to common law claims by third parties based on damages and costs resulting from environmental
contamination emanating from the property. If we become subject to significant environmental liabilities, our
business, financial condition or results of operations could be adversely affected.
Our reported financial results depend on management’s selection of accounting methods and certain
assumptions and estimates.
Our accounting policies and assumptions are fundamental to our reported financial condition and results of
operations. Our management must exercise judgment in selecting and applying many of these accounting policies
and methods so they comply with generally accepted accounting principles and reflect management’s judgment
of the most appropriate manner to report our financial condition and results. In some cases, management must
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