BB&T 2008 Annual Report Download - page 52

Download and view the complete annual report

Please find page 52 of the 2008 BB&T annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 152

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152

.25%. The following table summarizes certain pertinent information for the past three years with respect to
BB&T’s short-term borrowings:
Table 14
Federal Funds Purchased, Securities Sold Under
Agreements to Repurchase and Short-Term Borrowed Funds
As of /For the Year Ended
December 31,
2008 2007 2006
(Dollars in millions)
Securities Sold Under Agreements to Repurchase
Maximum outstanding at any month-end during the year $ 2,929 $2,776 $3,080
Balance outstanding at end of year 2,929 2,530 2,090
Average outstanding during the year 2,314 2,160 2,608
Average interest rate during the year 2.40% 4.39% 4.35%
Average interest rate at end of year 1.41 3.18 4.24
Federal Funds Purchased and Short-term Borrowed Funds
Maximum outstanding at any month-end during the year $13,346 $9,148 $6,036
Balance outstanding at end of year 7,859 8,104 5,997
Average outstanding during the year 8,266 7,165 4,398
Average interest rate during the year 2.17% 4.39% 4.27%
Average interest rate at end of year .67 3.79 4.83
BB&T also uses long-term debt to provide both funding and, to a lesser extent, regulatory capital. Long-term
debt comprised 14.5% of total funding needs on average during 2008 and 14.3% in 2007. See Note 10 “Long-Term
Debt” in the “Notes to Consolidated Financial Statements” herein for further disclosure. Long-term debt at
December 31, 2008, totaled $18.0 billion, a decrease of $661 million, or 3.5%, from year-end 2007. For the year
ended December 31, 2008, average long-term debt increased $1.8 billion, or 9.9%, compared to the average for
2007. BB&T’s long-term debt consists primarily of FHLB advances, which composed 54.6% of total outstanding
long-term debt at December 31, 2008, subordinated notes of BB&T Corporation, which composed 17.2% of the
year-end balance, and junior subordinated debt to unconsolidated trusts issued by the Corporation, which
composed 13.0% of total outstanding long-term debt at December 31, 2008. The remaining long-term debt
primarily consists of both unsecured senior and subordinated borrowings by Branch Bank. FHLB advances are
cost-effective long-term funding sources that provide BB&T with the flexibility to structure the debt in a manner
that aids in the management of interest rate risk and liquidity. The average rate paid on long-term debt
decreased from 5.46% during 2007 to 4.25% during 2008 primarily because BB&T has issued floating rate
instruments or elected to swap a portion of its fixed-rate long-term debt to floating rates.
During the fourth quarter of 2008, BB&T received notice that its $4 billion privately financed debt scheduled
to mature in 2010 would be called effective October 14, 2008. The financing was called by BB&T’s counterparty
because it was no longer profitable to the counterparty due to changes in interest rates. This decline was partially
offset by increases in FHLB advances, which were used due to the more competitive rates obtained compared to
other financing options. In addition, BB&T and Branch Bank issued new long-term debt during the third quarter
of 2008 that provides additional regulatory capital. In September 2008, BB&T Capital Trust V (“BBTCT V”)
issued $450 million of Capital Securities, with a fixed interest rate of 8.95% through September 15, 2063 and a
floating rate, if extended, through September 15, 2068. BBTCT V, a statutory business trust created under the
laws of the State of Delaware, was formed by BB&T for the sole purpose of issuing the Capital Securities and
investing the proceeds thereof in Junior Subordinated Debentures issued by BB&T. BB&T has made guarantees
which, taken collectively, fully, irrevocably, and unconditionally guarantee, on a subordinated basis, all of BBTCT
V’s obligations under the Trust and Capital Securities. BBTCT V’s sole asset is the Junior Subordinated
Debentures issued by BB&T which have an initial maturity on September 15, 2063 and a final maturity date on
September 15, 2068. The Junior Subordinated Debentures are subject to early redemption (i) in whole, but not in
part, at any time under certain prescribed limited circumstances or (ii) in whole, or in part, pursuant to the call
provisions after September 15, 2013. The Capital Securities of BBTCT V are subject to mandatory redemption in
whole, or in part, upon repayment of the Junior Subordinated Debentures at maturity or their earlier redemption.
52