BB&T 2015 Annual Report Download - page 27

TableofContents
Difficulty in integrating an acquired company may prevent BB&T from realizing 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 of the acquired company, or otherwise adversely affect BB&T’s ability to maintain
relationships with customers and employees or achieve the anticipated benefits of the acquisition. Also, the negative effect of any divestitures required by
regulatory authorities in acquisitions or business combinations may be greater than expected. As a result of these and other factors, BB&T could incur losses
on acquired assets and increased expenses resulting from the failure to successfully integrate an acquired company, which could adversely impact its
financial condition or results of operations.
BB&T may not be able to successfully implement future information technology system enhancements, which could adversely affect BB&T’s business
operations and profitability.
BB&T invests significant resources in information technology system enhancements in order to provide functionality and security at an appropriate level.
BB&T may not be able to successfully implement and integrate future system enhancements, which could adversely impact the ability to provide timely and
accurate financial information in compliance with legal and regulatory requirements, which could result in sanctions from regulatory authorities. Such
sanctions could include fines and suspension of trading in BB&T stock, among others. In addition, future system enhancements could have higher than
expected costs and/or result in operating inefficiencies, which could increase the costs associated with the implementation as well as ongoing operations.
Failure to properly utilize system enhancements that are implemented in the future could result in impairment charges that adversely impact BB&T’s
financial condition and results of operations and could result in significant costs to remediate or replace the defective components. In addition, BB&T may
incur significant training, licensing, maintenance, consulting and amortization expenses during and after systems implementations, and any such costs may
continue for an extended period of time.
Strategic and Other Risk
BB&T may experience significant competition from new or existing competitors, which may reduce its customer base or cause it to lower prices for its
products and services in order to maintain market share.
There is intense competition among commercial banks in BB&T’s market area. In addition, BB&T competes with other providers of financial services, such
as savings and loan associations, credit unions, consumer finance companies, securities firms, insurance companies, commercial finance and leasing
companies, the mutual funds industry, full-service brokerage firms and discount brokerage firms, some of which are subject to less extensive regulations than
BB&T is with respect to the products and services they provide. BB&T’s success depends, in part, on its ability to adapt its products and services to evolving
industry standards and customer expectations. There is increasing pressure to provide products and services at lower prices. Lower prices can reduce BB&T’s
NIM and revenues from its fee-based products and services.
In addition, the adoption of new technologies by competitors, 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. In addition, BB&T could lose market share to the shadow banking system or other
non-traditional banking organizations.
Some of BB&T’s larger competitors, including certain national banks that have a significant presence in BB&T’s market area, may have greater capital and
resources than BB&T, may have higher lending limits and may offer products and services not offered by BB&T. Any potential adverse reactions to BB&T’s
financial condition or status in the marketplace, as compared to its competitors, could limit BB&T’s ability to attract and retain customers and to compete for
new business opportunities. The inability to attract and retain customers or to effectively compete for new business may have a material and adverse effect on
BB&T’s financial condition and results of operations.
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Source: BB&T CORP, 10-K, February 25, 2016 Powered by Morningstar® Document Research℠
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