BB&T 2009 Annual Report Download - page 120
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BB&T CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Commercial mortgage servicing rights are recorded as other assets on the Consolidated Balance Sheets at
lower of cost or market and amortized in proportion to and over the estimated period that net servicing income is
expected to be received based on projections of the amount and timing of estimated future net cash flows. The
following is an analysis of the activity in BB&T’s commercial mortgage servicing rights for the years ended
December 31, 2009, 2008 and 2007:
Commercial Mortgage
Servicing Rights For
the Years Ended
December 31,
2009 2008 2007
(Dollars in millions)
Carrying value, January 1, $98 $ 88 $28
Additions 21 23 13
Purchases —153
Amortization expense (18) (14) (6)
Carrying value, December 31, $101 $ 98 $88
At December 31, 2009, the sensitivity of the current fair value of the capitalized commercial mortgage
servicing rights to adverse changes in key economic assumptions are included in the accompanying table.
Commercial
Mortgage Servicing Rights
December 31, 2009
(Dollars in millions)
Fair Value of Commercial Mortgage Servicing Rights $ 113
Weighted Average Life 8.0 yrs
Prepayment Speed 0.4%
Effect on fair value of a 10% increase $ (1)
Effect on fair value of a 15% increase (2)
Weighted Average Discount Rate 12.5%
Effect on fair value of a 25% increase $ (10)
Effect on fair value of a 50% increase (18)
The sensitivity calculations above are hypothetical and should not be considered to be predictive of future
performance. As indicated, changes in fair value based on adverse changes in assumptions generally cannot be
extrapolated because the relationship of the change in assumption to the change in fair value may not be linear.
Also, in this table, the effect of an adverse variation in a particular assumption on the fair value of the mortgage
servicing rights is calculated without changing any other assumption; while in reality, changes in one factor may
result in changes in another (for example, increases in market interest rates may result in increased value of
escrow deposits), which may magnify or counteract the effect of the change.
NOTE 9. Federal Funds Purchased, Securities Sold Under Agreements to Repurchase
and Short-Term Borrowed Funds
Federal funds purchased, securities sold under agreements to repurchase and short-term borrowed funds are
summarized as follows:
December 31,
2009 2008
(Dollars in millions)
Federal funds purchased $1,421 $ 584
Securities sold under agreements to repurchase 2,197 2,929
Master notes 1,004 1,708
Other short-term borrowed funds 3,484 5,567
Total $8,106 $10,788
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