BB&T 2009 Annual Report Download - page 138

BB&T CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
ownership positions. Typically, these incentives are based on the acquired entity’s contribution to BB&T’s
earnings compared to agreed-upon amounts. 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.
BB&T invests in certain affordable housing and historic building rehabilitation projects throughout its
market area as a means of supporting local communities, and receives tax credits related to these investments.
BB&T typically acts as a limited partner in these investments and does not exert control over the operating or
financial policies of the partnerships. Branch Bank typically provides financing during the construction and
development of the properties; however, permanent financing is generally obtained from independent third
parties upon completion of a project. As of December 31, 2009 and 2008, BB&T had investments of $1.1 billion and
$891 million, respectively, related to these projects, which are included as other assets on the Consolidated
Balance Sheets. BB&T’s outstanding commitments to fund affordable housing investments totaled $371 million
and $412 million at December 31, 2009 and 2008, respectively, which are included as other liabilities on the
Consolidated Balance Sheets. As of December 31, 2009 and 2008, BB&T had outstanding loan commitments to
these funds of $165 million and $161 million, respectively. Of these amounts, $73 million and $81 million had been
funded and at December 31, 2009 and 2008, respectively, and were included in loans and leases on the
Consolidated Balance Sheets. BB&T’s maximum risk exposure related to these investments totaled $1.2 billion
and $1.1 billion at December 31, 2009 and 2008, respectively.
BB&T has sold certain mortgage-related loans that contain recourse provisions. These provisions generally
require BB&T to reimburse the investor for a share of any loss that is incurred after the disposal of the property.
At December 31, 2009 and 2008, BB&T had $2.0 billion and $2.5 billion, respectively, of residential mortgage loans
sold with recourse. In the event of nonperformance by the borrower, BB&T has maximum recourse exposure of
approximately $667 million and $745 million as of December 31, 2009 and 2008, respectively. In addition, BB&T
has $4.0 billion and $3.3 billion in loans serviced for others that were covered by loss sharing agreements at
December 31, 2009 and 2008, respectively. As of December 31, 2009 and 2008, BB&T’s maximum exposure to loss
for these loans is approximately $1.1 billion and $818 million, respectively. At December 31, 2009, BB&T has
recorded $18 million of reserves related to these recourse exposures.
BB&T has investments and future funding commitments to certain venture capital funds. As of December 31,
2009, BB&T had investments of $281 million related to these ventures and future funding commitments of $183
million. As of December 31, 2008, BB&T had investments of $183 million related to these ventures and future
funding commitments of $222 million. BB&T’s risk exposure relating to such commitments is generally limited to
the amount of investments and future funding commitments made.
BB&T has made loan commitments as a nontransferor lender. As of December 31, 2009 and 2008, BB&T had
loan commitments to these entities totaling $211 million and $405 million, respectively. Of these amounts, $160
million and $290 million, respectively, had been funded and were included in loans and leases on the Consolidated
Balance Sheets.
Legal Proceedings
The nature of the business of BB&T’s banking and other subsidiaries ordinarily results in a certain amount of
litigation. The subsidiaries of BB&T are involved in various legal proceedings, all of which are considered
incidental to the normal conduct of business. Based on information currently available, advice of counsel, available
insurance coverage and established reserves, BB&T’s management believes that the liabilities, if any, arising
from these proceedings will not have a materially adverse effect on the consolidated financial position,
consolidated results of operations or consolidated cash flows of BB&T. However, in the event of unexpected
future developments, it is possible that the ultimate resolution of these matters, if unfavorable, may be material
to BB&T’s consolidated financial position, consolidated results of operations or consolidated cash flows.
138