BB&T 2009 Annual Report Download - page 105

BB&T CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Branch Bank determined that the acquisition of certain net assets of Colonial constituted a business
acquisition. Accordingly, the assets acquired and liabilities assumed as of August 14, 2009 are presented at their
fair values in the table below. In many cases the determination of these fair values required management to make
estimates about discount rates, future expected cash flows, market conditions and other future events that are
highly subjective in nature and subject to change. These fair value estimates are considered preliminary, and are
subject to change for up to one year after the closing date of the acquisition as additional information relative to
closing date fair values becomes available. Branch Bank and the FDIC are engaged in ongoing discussions that
may impact which assets and liabilities are ultimately acquired or assumed by Branch Bank and/or the purchase
price. In addition, the tax treatment of FDIC-assisted acquisitions is complex and subject to interpretations that
may result in future adjustments of deferred taxes as of the acquisition date.
The operating results of BB&T for the year ended December 31, 2009 include the operating results produced
by the acquired assets and assumed liabilities for the period of August 15, 2009 to December 31, 2009 and were
not material to the year ended December 31, 2009. Due primarily to BB&T acquiring only certain assets and
liabilities of Colonial, the significant amount of fair value adjustments, and the FDIC loss sharing agreements
now in place, historical results of Colonial are not meaningful to BB&T’s results, and thus no pro forma
information is presented.
On January 15, 2010, BB&T sold certain Nevada branch locations and approximately $850 million in deposits
that were acquired from Colonial.
Approximately $533 million of goodwill and a $176 million core deposit intangible were recorded in
connection with this transaction. The amount of goodwill recorded reflects the increased market share and
related synergies that are expected to result from the acquisition, and represents the residual difference in the
fair value of the net liability assumed by BB&T along with the payment from the FDIC for assuming this liability.
The goodwill was assigned to BB&T’s banking network segment. All of the goodwill and core deposit intangible
assets recognized are deductible for income tax purposes.
As Recorded
by Colonial
Bank Fair Value
Adjustments As Recorded by BB&T
(Dollars in millions)
Assets:
Cash, due from banks and federal funds sold $ 185 $ — $ 185
Interest-bearing deposits in banks and the Federal Reserve 876 — 876
Investment securities (including $1,142 of covered securities) 3,723 (4) 3,719
Covered loans held for sale 1,071 — 1,071
Covered loans 13,039 (4,484) 8,555
Non-covered loans 218 (68) 150
Total loans 14,328 (4,552) 9,776
Goodwill — 533 533
Core deposit intangible — 176 176
Covered other real estate owned 165 (21) 144
FDIC loss share receivable — 3,083 3,083
Other assets (including $60 of covered assets) 360 282 642
Total assets acquired $19,637 $ (503) $19,134
Liabilities:
Deposits $19,205 $ 131 $19,336
Repurchase agreements 74 — 74
Advances from Federal Home Loan Bank of Atlanta 3,341 313 3,654
Accrued expenses and other liabilities 90 101 191
Total liabilities assumed $22,710 $ 545 $23,255
Due from FDIC for net liabilities assumed $ 3,073 $ 1,048 $ 4,121
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