BB&T 2009 Annual Report Download - page 113

BB&T CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(1) Unearned income totaled $580 million and $748 million at December 31, 2009 and 2008, respectively.
Covered loans represent loans acquired from the FDIC subject to one of the loss sharing agreements. Other
acquired loans represent consumer loans acquired from the FDIC that are not subject to one of the loss sharing
agreements.
BB&T evaluated purchased loans for impairment. Purchased loans with evidence of credit deterioration since
origination and for which it is probable that all contractually required payments will not be collected are
considered impaired. The following table reflects the carrying value of all purchased impaired and nonimpaired
loans as of December 31, 2009:
Purchased
Impaired
Loans
Purchased
Nonimpaired
Loans Total
(Dollars in millions)
Residential mortgage loans $ 826 $ 806 $1,632
Commercial real estate loans 2,732 2,574 5,306
Commercial loans 94 987 1,081
Total covered loans 3,652 4,367 8,019
Other acquired loans 14 109 123
Total $3,666 $4,476 $8,142
Changes in the carrying amount and accretable yield for purchased impaired and nonimpaired loans,
excluding loans held for sale, were as follows for the year ended December 31, 2009:
Purchased Impaired Purchased Nonimpaired
Accretable
Yield
Carrying
Amount
of Loans Accretable Yield
Carrying
Amount
of Loans
(Dollars in millions)
Balance at beginning of period $ — $ — $ — $ —
Additions (1) 997 3,820 1,427 4,885
Accretion (108) 108 (126) 126
Payments received, net — (262) — (535)
Balance at end of period $ 889 $3,666 $1,301 $4,476
(1) Represents the fair value of the loans at the date of acquisition.
As of August 14, 2009, the preliminary estimate of the contractually required payments receivable for all
purchased impaired loans acquired in the Colonial transaction, including those covered and not covered under loss
sharing agreements with the FDIC, were $8.3 billion, the cash flows expected to be collected were $4.8 billion
including interest, and the estimated fair value of the loans was $3.8 billion. These amounts were determined
based upon the estimated remaining life of the underlying loans, which includes the effects of estimated
prepayments. The outstanding balance for all purchased impaired loans as of the acquisition date and
December 31, 2009 was $6.3 billion and $5.7 billion, respectively.
For the purchased nonimpaired loans, excluding loans held for sale, the preliminary estimate as of the
acquisition date of the contractually required payments receivable were $9.1 billion, the contractual cash flows
not expected to be collected were $2.8 billion, and the estimated fair value of the loans was $4.9 billion. The
difference between the carrying value of the purchased nonimpaired loans and the expected cash flows is being
accreted to interest income over the remaining life of the loans. The outstanding balance for all purchased
nonimpaired loans as of the acquisition date and December 31, 2009 was $7.0 billion and $6.6 billion, respectively.
113