BB&T 2008 Annual Report Download - page 104

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BB&T CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents the gross carrying amounts and accumulated amortization for BB&T’s
identifiable intangible assets subject to amortization at the dates presented:
Identifiable Intangible Assets
As of December 31, 2008 As of December 31, 2007
Gross
Carrying
Amount Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount Accumulated
Amortization
Net
Carrying
Amount
(Dollars in millions)
Identifiable intangible assets
Core deposit intangibles $ 457 $(325) $132 $ 457 $(284) $173
Other (1) 719 (309) 410 566 (250) 316
Totals $1,176 $(634) $542 $1,023 $(534) $489
(1) Other identifiable intangibles are primarily customer relationship intangibles.
During the years ended December 31, 2008, 2007 and 2006, BB&T incurred $100 million, $104 million and
$104 million, respectively, in pretax amortization expenses associated with core deposit intangibles and other
intangible assets. At December 31, 2008, the weighted-average remaining life of core deposit intangibles and
other identifiable intangibles was 10.7 years and 12.6 years, respectively.
Estimated amortization expense of identifiable intangible assets for each of the next five years total $95
million, $82 million, $70 million, $58 million and $47 million.
NOTE 8. Loan Servicing
BB&T has two classes of mortgage servicing rights for which it separately manages the economic risks:
residential and commercial. Commercial mortgage servicing rights are recorded as other assets on the
Consolidated Balance Sheets at lower of cost or market and amortized in proportion to and over the estimated
period that net servicing income is expected to be received based on projections of the amount and timing of
estimated future net cash flows. Residential mortgage servicing rights are recorded on the Consolidated Balance
Sheets at fair value with changes in fair value recorded as a component of mortgage banking income in the
Consolidated Statements of Income for each period. BB&T uses various derivative instruments to mitigate the
income statement effect of changes in fair value, due to changes in valuation inputs and assumptions, of its
residential mortgage servicing rights. The following is an analysis of the activity in BB&T’s residential mortgage
servicing rights for the years ended December 31, 2008, 2007 and 2006:
Residential
Mortgage Servicing Rights
For the Years Ended
December 31,
2008 2007 2006
(Dollars in millions)
Carrying value, January 1, $ 472 $484 $431
Additions 212 134 94
Purchases —418
Increase (decrease) in fair value:
Due to changes in valuation inputs or assumptions (220) (60) 21
Other changes (1) (94) (90) (80)
Carrying value, December 31, $ 370 $472 $484
(1) Represents the realization of expected net servicing cash flows, expected borrower payments and the
passage of time.
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