BB&T 2008 Annual Report Download - page 8

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competitors, including certain national banks that have a significant presence in BB&T’s market area, may have
greater resources than BB&T, may have higher lending limits and may offer products and services not offered by
BB&T.
BB&T also experiences competition from a variety of institutions outside of the Company’s market area.
Some of these institutions conduct business primarily over the Internet and may thus be able to realize certain
cost savings and offer products and services at more favorable rates and with greater convenience to the
customer who can pay bills and transfer funds directly without going through a bank. This “disintermediation”
could result in the loss of fee income, as well as the loss of customer deposits and income generated from those
deposits. In addition, changes in consumer spending and saving habits could adversely affect BB&T’s operations,
and the Company may be unable to timely develop competitive new products and services in response to these
changes.
Maintaining or increasing BB&T’s market share may depend on lowering prices and market acceptance of new
products and services.
BB&T’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
BB&T’s net interest margin and revenues from its fee-based products and services. In addition, the widespread
adoption of new technologies, including internet services, could require the Company to make substantial
expenditures to modify or adapt its existing products and services. Also, these and other capital investments in
BB&T’s business may not produce expected growth in earnings anticipated at the time of the expenditure. The
Company may not be successful in introducing new products and services, achieving market acceptance of its
products and services, or developing and maintaining loyal customers.
Acts or threats of terrorism and political or military actions taken by the United States or other governments
could adversely affect general economic or industry conditions.
Geopolitical conditions may affect BB&T’s earnings. Acts or threats of terrorism and political or military
actions taken by the United States or other governments in response to terrorism, or similar activity, could
adversely affect general economic or industry conditions.
Unpredictable catastrophic events could have a material adverse effect on BB&T.
The occurrence of catastrophic events such as hurricanes, tropical storms, earthquakes, pandemic disease,
windstorms, floods, severe winter weather (including snow, freezing water, ice storms and blizzards), fires and
other catastrophes could adversely affect BB&T’s consolidated financial condition or results of operations.
Unpredictable natural and other disasters could have an adverse effect on the Company in that such events could
materially disrupt its operations or the ability or willingness of its customers to access the financial services
offered by BB&T. The Company’s property and casualty insurance operations also expose it to claims arising out
of catastrophes. The incidence and severity of catastrophes are inherently unpredictable. Although the Company
carries insurance to mitigate its exposure to certain catastrophic events, catastrophic events could nevertheless
reduce BB&T’s earnings and cause volatility in its financial results for any fiscal quarter or year and have a
material adverse effect on BB&T’s financial condition or results of operations.
BB&T faces significant operational risk.
BB&T is exposed to many types of operational risks, including reputational risk, legal and compliance risk,
the risk of fraud or theft by employees or outsiders, unauthorized transactions by employees or operational
errors, including clerical or record-keeping errors or those resulting from faulty or disabled computer or
telecommunications systems. Negative public opinion can result from BB&T’s actual or alleged conduct in any
number of activities, including lending practices, corporate governance and acquisitions and from actions taken by
government regulators and community organizations in response to those activities. Negative public opinion can
adversely affect BB&T’s ability to attract and keep customers and can expose it to litigation and regulatory
action.
Because the nature of the financial services business involves a high volume of transactions, certain errors
may be repeated or compounded before they are discovered and successfully rectified. BB&T’s necessary
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