BB&T 2015 Annual Report Download - page 10

TableofContents
Competition
The financial services industry is highly competitive and constantly evolving. BB&T’s subsidiaries compete actively with national, regional and local
financial services providers, including banks, thrifts, securities dealers, mortgage bankers, finance companies and insurance companies. In recent years,
competition has increased from institutions not subject to the same regulatory restrictions as domestic banks and BHCs. Consumers have the opportunity to
select from a variety of traditional and nontraditional alternatives. The industry frequently sees merger activity, which affects competition by eliminating
some regional and local institutions, while strengthening the franchises of acquirers. For additional information concerning markets, BB&T’s competitive
position and business strategies and recent government interventions, see “Market Area” above and “General Business Development” below.
General Business Development
BB&T is a regional FHC and has maintained a long-term focus on a strategy that includes expansion of asset size and diversification in terms of revenues and
sources of profitability. This strategy encompasses both organic growth and acquisitions of complementary banks and financial businesses.
Merger and Acquisition Strategy
BB&T’s growth in business, profitability and market share has historically been enhanced by strategic mergers and acquisitions. Management intends to
remain disciplined and focused with regard to future merger and acquisition opportunities. BB&T will continue to assess bank and thrift acquisitions subject
to market conditions, primarily within or contiguous to BB&T’s existing footprint, and will pursue economically advantageous acquisitions of insurance
agencies, specialized lending businesses, and fee income generating financial services businesses. BB&T’s strategy is currently focused on meeting the
following acquisition criteria:
·the organization must be a good fit with BB&T’s culture;
·the acquisition must be strategically attractive – meaning that any bank acquisition should be in BB&T’s existing footprint to allow for cost savings
and economies of scale or in contiguous states to provide market diversification, or the transaction must be otherwise strategically compelling;
·any risk-related issues would need to be quantified and addressed; and
·the transaction must meet BB&T’s financial criteria.
During 2015, BB&T completed the purchases of Susquehanna Bancshares, Inc. and The Bank of Kentucky Financial Corporation. BB&T also acquired 41
retail branches in Texas from Citigroup. During 2014, BB&T purchased 21 retail branches in Texas from Citigroup. See Note 2 “Acquisitions and
Divestitures” in the “Notes to the Consolidated Financial Statements” for further information about these transactions.
BB&T has reached an agreement and received approval from applicable banking regulators to acquire National Penn Bancshares, Inc., which had $9.6 billion
in assets and $6.7 billion in deposits as of December 31, 2015. This transaction is currently expected to close on April 1, 2016.
Regulatory Considerations
The extensive regulatory framework applicable to banks, BHCs and FHCs is intended primarily for the protection of depositors, the DIF and the stability of
the financial system, rather than for the protection of shareholders and creditors. Comprehensive reform of the legislative and regulatory landscape occurred
with the passage of the Dodd-Frank Act during 2010. Implementation of the Dodd-Frank Act and related rulemaking activities continues to occur. In addition
to banking laws, regulations and regulatory agencies, BB&T is subject to various other laws, regulations, supervision and examination by other regulatory
agencies, all of which directly or indirectly affect the operations and management of BB&T and its ability to make distributions to shareholders.
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Source: BB&T CORP, 10-K, February 25, 2016 Powered by Morningstar® Document Research℠
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