BB&T 2007 Annual Report Download - page 78

BB&T CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
NOTE 1. Summary of Significant Accounting Policies
General
BB&T Corporation (“BB&T”, the “Company” or “Parent Company”) is a financial holding company organized
under the laws of North Carolina. BB&T conducts operations through its principal bank subsidiary, Branch
Banking and Trust Company (“Branch Bank”) and its nonbank subsidiaries.
The accounting and reporting policies of BB&T Corporation and its subsidiaries are in accordance with
accounting principles generally accepted in the United States of America. Additionally, where applicable, the
policies conform to the accounting and reporting guidelines prescribed by bank regulatory authorities. The
following is a summary of BB&T’s more significant accounting policies.
Nature of Operations
BB&T is a financial holding company headquartered in Winston-Salem, North Carolina. BB&T conducts its
operations primarily through Branch Bank, which has branches in North Carolina, South Carolina, Virginia,
Maryland, Georgia, West Virginia, Tennessee, Kentucky, Florida, Alabama, Indiana and Washington, D.C.
Branch Bank provides a wide range of banking services to individuals and businesses, and offers a variety of loans
to businesses and consumers. Such loans are made primarily to individuals residing in the market areas described
above or to businesses located within BB&T’s geographic footprint. Branch Bank also markets a wide range of
deposit services to individuals and businesses. Branch Bank offers, either directly, or through its subsidiaries,
lease financing to businesses and municipal governments; factoring; discount brokerage services, annuities and
mutual funds; life insurance, property and casualty insurance, health insurance and commercial general liability
insurance on an agency basis and through a wholesale insurance brokerage operation; insurance premium
financing; permanent financing arrangements for commercial real estate; loan servicing for third-party investors;
direct consumer finance loans to individuals; and trust services. The direct nonbank subsidiaries of BB&T provide
a variety of financial services including automobile lending, equipment financing, full-service securities
brokerage, payroll processing, asset management and capital markets services.
Principles of Consolidation
The consolidated financial statements of BB&T include the accounts of BB&T Corporation and those
subsidiaries that are majority owned by BB&T and over which BB&T exercises control. In consolidation, all
significant intercompany accounts and transactions are eliminated. The results of operations of companies
acquired are included only from the dates of acquisition. All material wholly owned and majority owned
subsidiaries are consolidated unless accounting principles generally accepted in the United States of America
require otherwise.
BB&T evaluates variable interests in entities for which voting interests are not an effective means of
identifying controlling financial interests. Variable interests are those in which the value of the interest changes
with the fair value of the net assets of the entity exclusive of variable interests. If the results of the evaluation
indicate the existence of a primary beneficiary and the entity does not effectively disperse risks among the
parties involved, that primary beneficiary is required to consolidate the entity. Likewise, if the evaluation
indicates that the requirements for consolidation are not met and the entity has previously been consolidated,
then the entity would be deconsolidated.
BB&T has variable interests in certain entities that were not required to be consolidated, including
affordable housing partnership interests, historic tax credit partnerships, other partnership interests and trusts
that have issued capital securities.
BB&T accounts for unconsolidated partnership investments using the equity method of accounting. In
addition to affordable housing partnerships, which represent the majority of unconsolidated investments in
variable interest entities, BB&T also has investments and future funding commitments to venture capital and
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