BB&T 2007 Annual Report Download - page 22

following goals: (i) to provide a sufficient margin of liquid assets to meet unanticipated deposit and loan
fluctuations and overall funds management objectives; (ii) to provide eligible securities to secure public funds,
trust deposits as prescribed by law and other borrowings; and (iii) to earn the maximum return on funds invested
that is commensurate with meeting the requirements of (i) and (ii).
Funding Activities
Deposits are the primary source of funds for lending and investing activities, and their cost is the largest
category of interest expense. Scheduled payments, as well as prepayments, and maturities from portfolios of
loans and investment securities also provide a stable source of funds. Federal Home Loan Bank (“FHLB”)
advances, other secured borrowings, Federal funds purchased and other short-term borrowed funds, as well as
longer-term debt issued through the capital markets, all provide supplemental liquidity sources. BB&T’s funding
activities are monitored and governed through BB&T’s overall asset/liability management process, which is
further discussed in the “Market Risk Management” section in “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” herein. BB&T conducts its funding activities in compliance with
all applicable laws and regulations. Following is a brief description of the various sources of funds used by BB&T.
For further discussion relating to outstanding balances and balance fluctuations, refer to the “Deposits and Other
Borrowings” section in “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” herein.
Deposits
Deposits are attracted principally from clients within BB&T’s branch network through the offering of a
broad selection of deposit instruments to individuals and businesses, including noninterest-bearing checking
accounts, interest-bearing checking accounts, savings accounts, money rate savings accounts, investor deposit
accounts, certificates of deposit and individual retirement accounts. Deposit account terms vary with respect to
the minimum balance required, the time period the funds must remain on deposit and service charge schedules.
Interest rates paid on specific deposit types are determined based on (i) the interest rates offered by competitors,
(ii) the anticipated amount and timing of funding needs, (iii) the availability and cost of alternative sources of
funding, and (iv) the anticipated future economic conditions and interest rates. Client deposits are attractive
sources of funding because of their stability and relative cost. Deposits are regarded as an important part of the
overall client relationship and provide opportunities to cross-sell other BB&T services. In addition, BB&T
gathers a portion of its deposit base through wholesale funding products, which include negotiable certificates of
deposit and Eurodollar deposits through the use of a Cayman branch facility. At December 31, 2007, these
sources of deposits represented approximately 12% of BB&T’s total deposits.
The following table provides information regarding the scheduled maturities of time deposits that are
$100,000 and greater at December 31, 2007:
Table 7
Scheduled Maturities of Time Deposits $100,000 and Greater
December 31, 2007
(Dollars in millions)
Maturity Schedule
Three months or less $ 6,641
Over three through six months 3,729
Over six through twelve months 2,806
Over twelve months 1,157
Total $14,333
Borrowed Funds
BB&T’s ability to borrow funds from nondeposit sources provides additional flexibility in meeting the
liquidity needs of the Company. Short-term borrowings include Federal funds purchased, securities sold under
repurchase agreements, master notes, short-term FHLB advances, U.S. Treasury tax and loan depository note
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