BB&T 2009 Annual Report Download - page 107

BB&T CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Deposits
The fair values used for the demand and savings deposits that comprise the transaction accounts acquired by
definition equal the amount payable on demand at the acquisition date. The fair values for time deposits are
estimated using a discounted cash flow calculation that applies interest rates currently being offered to the
interest rates embedded on such time deposits.
Advances from Federal Home Loan Bank of Atlanta
The fair values of Federal Home Loan Bank (FHLB) advances were based on pricing supplied by the FHLB.
Other Financial Institution Acquisitions
On December 12, 2008, BB&T acquired all the deposits and $61 million in assets of Haven Trust Bank of
Duluth, Georgia through an agreement with the FDIC. Haven Trust Bank operated four branches with
approximately $506 million in deposits.
On May 1, 2007, BB&T completed the acquisition of Coastal Financial Corporation (“Coastal”), a $1.7 billion
bank holding company headquartered in Myrtle Beach, South Carolina. In conjunction with this transaction,
BB&T issued approximately 8.8 million shares of common stock and 574 thousand stock options valued in the
aggregate at $400 million. Including subsequent adjustments, BB&T recorded $246 million in goodwill and $47
million in amortizing intangibles, which are primarily core deposit intangibles.
Insurance and Other Non-bank Acquisitions
During 2009, BB&T acquired certain assets of an insurance premium finance business, one insurance agency
and two commercial real estate servicing businesses. Including subsequent adjustments, approximately $39
million of goodwill and $29 million of identifiable intangibles were recorded in connection with these acquisitions.
During 2008, BB&T acquired eleven insurance businesses and one nonbank financial services company. Including
subsequent adjustments, approximately $246 million in goodwill and $156 million of identifiable intangible assets
were recorded in connection with these transactions. During 2007, BB&T acquired four insurance agencies and
two nonbank financial services companies. Including subsequent adjustments, BB&T recorded approximately $82
million in goodwill and $93 million of identifiable intangibles in connection with these transactions. BB&T also
divested one insurance agency during 2007.
Merger and acquisition agreements of businesses other than financial institutions occasionally include
additional incentives to the acquired entities to offset the loss of future cash flows previously received through
ownership positions. Typically, these incentives are based on the acquired entity’s contribution to BB&T’s
earnings compared to agreed-upon amounts. These amounts will be charged to goodwill based on the terms of the
agreement. When offered, these incentives are typically issued for terms of three to five years. As certain
provisions of these agreements do not specify dollar limitations, it is not possible to quantify the maximum
exposure resulting from these agreements.
Merger-Related and Restructuring Activities
BB&T has incurred certain merger-related and restructuring expenses. Merger-related and restructuring
expenses or credits include: severance and personnel-related costs or credits, which typically occur in corporate
support and data processing functions; occupancy and equipment charges or credits, which relate to costs or gains
associated with lease terminations, obsolete equipment write-offs, and the sale of duplicate facilities and
equipment; and other merger-related and restructuring charges or credits, which include expenses necessary to
convert and combine the acquired branches and operations of merged companies, direct media advertising related
to the acquisitions, asset and supply inventory write-offs, investment banking advisory fees, and other similar
charges. Merger-related and restructuring charges during 2009, 2008 and 2007 were $38 million, $15 million and
$21 million, respectively.
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