BB&T 2008 Annual Report Download - page 133

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BB&T CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Cash and cash equivalents and segregated cash due from banks: For these short-term instruments, the
carrying amounts are a reasonable estimate of fair values.
Loans receivable and loans held for sale: The fair values for loans are estimated using discounted cash flow
analyses, using interest rates currently being offered for loans with similar terms and credit quality. The carrying
amounts of accrued interest approximate fair values. The fair values of loans held for sale for which BB&T did not
elect the Fair Value Option are based on quoted market prices and the projected value of the net servicing fees.
Deposit liabilities: The fair values for demand deposits, interest-checking accounts, savings accounts and
certain money market accounts are, by definition, equal to the amount payable on demand at the reporting date,
i.e., their carrying amounts. Fair values for certificates of deposit are estimated using a discounted cash flow
calculation that applies current interest rates to aggregate expected maturities.
Federal funds purchased, securities sold under repurchase agreements and short-term borrowed funds: The
carrying amounts of Federal funds purchased, borrowings under repurchase agreements and short-term
borrowed funds approximate their fair values.
Long-term debt: The fair values of long-term debt are estimated based on quoted market prices for the
instrument if available, or for similar instruments if not available, or by using discounted cash flow analyses,
based on BB&T’s current incremental borrowing rates for similar types of instruments.
Contractual commitments: The fair values of commitments are estimated using the fees charged to enter
into similar agreements, taking into account the remaining terms of the agreements and the present
creditworthiness of the counterparties. For fixed-rate loan commitments, fair values also consider the difference
between current levels of interest rates and the committed rates. The fair values of guarantees and letters of
credit are estimated based on the counterparties’ creditworthiness and average default rates for loan products
with similar risks. The fair values of commitments to fund affordable housing investments are estimated using
the net present value of future commitments.
NOTE 19. Derivative Financial Instruments
The following tables set forth certain information concerning BB&T’s derivative financial instruments at
December 31, 2008 and 2007:
Derivative Financial Instruments
December 31, 2008 December 31, 2007
Notional
Amount
Estimated
Fair
Value Notional
Amount
Estimated
Fair
Value
(Dollars in millions)
Receive fixed swaps (includes forward starting) $18,302 $1,284 $14,890 $ 336
Pay fixed swaps (includes forward starting) 18,387 (857) 7,492 (171)
Other swaps 6,803 7 5,457 (10)
Caps, floors and collars 1,187 — 3,650 16
Foreign exchange contracts 684 1 227 —
Futures contracts 7,154 (7) 8,690 (3)
Treasury forwards — — 10 —
Interest rate lock commitments 4,239 33 1,203 2
Forward commitments 4,820 (44) 2,028 (10)
Swaptions 5,163 115 1,741 21
When-issued securities and forward rate agreements 6,883 87 1,703 —
Options on contracts purchased and sold 555 7 106 —
Total $74,177 $ 626 $47,197 $ 181
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