BB&T 2009 Annual Report Download - page 114

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BB&T CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
At December 31, 2009, none of the purchased impaired or purchased nonimpaired loans were classified as
nonperforming assets. Therefore, interest income, through accretion of the difference between the carrying
amount of the loans and the expected cash flows, is being recognized on all purchased loans. There was no
allowance for credit losses related to the purchased loans at December 31, 2009.
The following table provides details regarding BB&T’s investment in leveraged leases.
December 31,
2009 2008
(Dollars in millions)
Rentals receivable (net of principal and interest on nonrecourse debt and head lease
obligation) $ 750 $1,367
Unearned income (375) (614)
Investment in leveraged leases, net of unearned income 375 753
Deferred taxes arising from leveraged leases 12 (70)
Net investment in leveraged leases $ 387 $ 683
BB&T entered into a settlement agreement in 2008 with the Internal Revenue Service (“IRS”) regarding its
leveraged lease transactions. For tax purposes, the leveraged leases were deemed terminated as of December 31,
2008. Please refer to Note 13 for additional details regarding BB&T’s leveraged lease settlement.
BB&T had $73.6 billion in loans secured by real estate at December 31, 2009. However, these loans were not
concentrated in any specific market or geographic area other than Branch Bank’s primary markets. Certain loans
have been pledged as collateral for all outstanding Federal Home Loan Bank advances and certain other
corporate purposes at December 31, 2009 and 2008.
The following table sets forth certain information regarding BB&T’s impaired loans, excluding acquired
impaired loans, that were evaluated for specific reserves:
December 31,
2009 2008
(Dollars in millions)
Total recorded investment—impaired loans $1,598 $ 740
Total recorded investment with no related valuation allowance 611 145
Total recorded investment with related valuation allowance 987 595
Allowance for loan and lease losses assigned to impaired loans (176) (102)
Net carrying value—impaired loans $1,422 $ 638
Average impaired loans for the years ended December 31, 2009, 2008, and 2007 were $1.1 billion, $512 million
and $137 million, respectively. The amount of interest that has been recognized as income on impaired loans for
any of the last three years was not material.
At December 31, 2009, BB&T had $471 million in loans that were accruing interest under the terms of
troubled debt restructurings. This amount consists of $103 million in residential mortgage loans, $54 million in
revolving credit loans, $308 million in commercial loans and $6 million in direct retail loans. Loan restructurings
generally occur when a borrower is experiencing, or is expected to experience, financial difficulties in the near-
term. Consequently, a modification that would otherwise not be considered is granted to the borrower. These
loans may continue to accrue interest as long as the borrower complies with the revised terms and conditions and
has demonstrated repayment performance with the modified terms.
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