BB&T 2010 Annual Report Download - page 10

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 banking services, mobile phone applications and advanced ATM
functionality could require BB&T 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. BB&T may not be successful in introducing new products and
services, achieving market acceptance of its products and services, anticipating or reacting to consumers’
changing technological preferences or developing and maintaining loyal customers.
BB&T has expanded operations into new geographic areas as a result of the Colonial acquisition, and the
inability to continue to effectively compete in these new markets could adversely affect BB&T’s business.
Portions of the market areas served by Colonial, including market areas in Alabama, Florida and Texas, are
areas in which BB&T historically conducted limited or no banking activities. Although BB&T has completed the
operational and systems integration associated with the assets acquired in the Colonial transaction, BB&T must
continue to effectively integrate these new markets to retain and expand the business previously conducted by
Colonial. While BB&T management believes it has to date competed effectively in these new markets, the ability
to strengthen and further enhance market presence will remain dependent upon BB&T’s ability to understand
the local market and competitive dynamics and identify and retain certain employees from Colonial who know
their markets better than BB&T.
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, these 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 and/or results of operations.
BB&T faces significant operational risks related to activities, which could expose it to negative publicity,
litigation and/or regulatory action.
BB&T is exposed to many types of risks, including operational, reputational, 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, activities related to asset
sales and balance sheet management 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.
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