BB&T 2011 Annual Report Download - page 25

power loss or telecommunication failure. Any damage or failure that causes an interruption in BB&T’s operations could
adversely affect its business and financial results. In addition, BB&T’s computer systems and network infrastructure
present security risks, and could be susceptible to hacking or identity theft. Hacking and identity theft risks, in particular,
could cause serious reputational harm.
Differences in interpretation of tax laws and regulations may adversely impact BB&T’s financial statements.
Local, state or federal tax authorities may interpret tax laws and regulations differently than BB&T and challenge tax
positions that BB&T has taken on its tax returns. This may result in differences in the treatment of revenues, deductions or
credits, and/or differences in the timing of these items. The differences in treatment may result in the payment of
additional taxes, interest or penalties that could have a material adverse effect on BB&T’s performance. For example, as
discussed in Note 13 “ Income Taxes” in the “Notes to Consolidated Financial Statements,” in February 2010, BB&T
received an IRS statutory notice of deficiency for tax years 2002-2007 asserting a liability for taxes, penalties and interest
of approximately $892 million. As a procedural matter, and to limit further exposure to penalties and interest, BB&T paid
the disputed tax, penalties and interest in March 2010 and filed a lawsuit seeking a refund in the U.S. Court of Federal
Claims. Final resolution of this matter is not expected within the next 12 months.
BB&T may not be able to complete acquisitions, including the acquisition of BankAtlantic.
BB&T must generally satisfy a number of meaningful conditions before it can complete an acquisition of another bank or
bank holding company, including federal and/or state regulatory approvals. For example, BB&T is currently seeking
approval for its proposed acquisition of BankAtlantic, a wholly owned subsidiary of BankAtlantic Bancorp, Inc. pursuant
to a definitive agreement executed in November 2011. In determining whether to approve a proposed bank acquisition,
bank regulators will consider, among other factors, the effect of the acquisition on competition, financial condition and
future prospects, including current and projected capital ratios and levels, the competence, experience and integrity of
management and record of compliance with laws and regulations, the convenience and needs of the communities to be
served, including the acquiring institution’s record of compliance under the Community Reinvestment Act, the
effectiveness of the acquiring institution in combating money laundering activities and protests from various stakeholders
of both BB&T and its acquisition partner. Also, under the Dodd-Frank Act, U.S. regulators must now take systemic risk
into account when evaluating whether to approve a potential acquisition transaction involving a large financial institution
like BB&T. BB&T cannot be certain when or if, or on what terms and conditions, any required regulatory approvals will
be granted. In specific cases, BB&T may be required to sell banks or branches, or take other actions as a condition to
receiving regulatory approval. An inability to satisfy other material conditions necessary to consummate an acquisition
transaction, such as third-party litigation, a judicial order blocking the transaction or lack of shareholder approval, could
also prevent BB&T from completing an announced acquisition.
BB&T may not be able to successfully integrate bank or nonbank mergers and acquisitions.
Difficulties may arise in the integration of the business and operations of bank holding companies, banks and other
nonbank entities BB&T acquires and, as a result, BB&T may not be able to achieve the cost savings and synergies that it
expects will result from such transactions. Achieving cost savings is dependent on consolidating certain operational and
functional areas, eliminating duplicative positions and terminating certain agreements for outside services. Additional
operational savings are dependent upon the integration of the acquired or merged entity’s businesses with BB&T or one of
BB&T’s subsidiaries, the conversion of core operating systems, data systems and products and the standardization of
business practices. Complications or difficulties in the conversion of the core operating systems, data systems and
products may result in the loss of customers, damage to BB&T’s reputation within the financial services industry,
operational problems, one-time costs currently not anticipated or reduced cost savings resulting from such mergers or
acquisitions. Annual cost savings in each such transaction may be materially less than anticipated if the holding company,
bank merger or nonbank merger or acquisition is delayed unexpectedly, the integration of operations is delayed beyond
what is anticipated or the conversion to a single data system is not accomplished on a timely basis.
Difficulty in integrating an acquired company may cause BB&T not to realize expected revenue increases, cost savings,
increases in geographic or product presence and/or other projected benefits from the acquisition. The integration could
result in higher than expected deposit attrition, loss of key employees, disruption of BB&T’s businesses or the businesses
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