BB&T 2009 Annual Report Download - page 18

conditions and suitable candidates, primarily within BB&T’s existing footprint, and will pursue economically
advantageous acquisitions of insurance agencies, specialized lending businesses, and fee income generating
financial services businesses. BB&T’s acquisition strategy is focused on three primary objectives:
Što pursue assisted and unassisted acquisitions of banks and thrifts with compatible cultures that will
enhance BB&T’s banking network and customer delivery system;
Što acquire companies in niche markets that provide products or services that can be offered through the
existing distribution system to BB&T’s current customer base; and
Što consider strategic nonbank acquisitions in markets that are economically feasible and provide positive
long-term benefits.
BB&T completed acquisitions of 35 community banks and thrifts, 85 insurance agencies and 30 nonbank
financial services providers over the last fifteen years. In the long-term, BB&T expects to continue to take
advantage of the consolidation in the financial services industry and expand and enhance its franchise through
mergers and acquisitions. The consideration paid for these acquisitions may be in the form of cash, debt or BB&T
common stock. The amount of consideration paid to complete these transactions may be in excess of the book
value of the underlying net assets acquired, which could have a dilutive effect on BB&T’s earnings. In addition,
acquisitions often result in significant front-end charges against earnings; however, cost savings and revenue
enhancements, especially incident to in-market bank and thrift acquisitions, are typically anticipated.
Lending Activities
The primary goal of the BB&T lending function is to help clients achieve their financial goals by providing
quality loan products that are fair to the client and profitable to the Corporation. Management believes that this
purpose can best be accomplished by building strong, profitable client relationships over time, with BB&T
becoming an important contributor to the prosperity and well-being of its clients. In addition to the importance
placed on client knowledge and continuous involvement with clients, BB&T’s lending process incorporates the
standards of a consistent company-wide credit culture and an in-depth local market knowledge. Furthermore, the
Corporation employs strict underwriting criteria governing the degree of assumed risk and the diversity of the
loan portfolio in terms of type, industry and geographical concentration. In this context, BB&T strives to meet
the credit needs of businesses and consumers in its markets while pursuing a balanced strategy of loan
profitability, loan growth and loan quality.
BB&T conducts the majority of its lending activities within the framework of the Corporation’s community
bank operating model, with lending decisions made as close to the client as practicable.
The following table summarizes BB&T’s loan portfolio based on the regulatory classification of the portfolio,
which focuses on the underlying loan collateral, and differs from internal classifications presented herein that
focus on the primary purpose of the loan.
Table 2
Composition of Loan and Lease Portfolio
December 31,
2009 2008 2007 2006 2005
(Dollars in millions)
Commercial, financial and agricultural loans $ 17,768 $17,131 $14,037 $10,848 $ 9,532
Lease receivables 1,558 2,007 3,899 4,358 4,250
Real estate—construction and land development loans 15,353 20,065 19,474 17,553 11,942
Real estate—mortgage loans 55,647 46,772 44,687 42,219 41,539
Consumer loans 13,910 12,018 11,107 10,389 9,604
Total loans and leases held for investment 104,236 97,993 93,204 85,367 76,867
Less: unearned income (580) (748) (2,297) (2,456) (2,473)
Net loans and leases held for investment 103,656 97,245 90,907 82,911 74,394
Loans held for sale 2,551 1,424 779 680 629
Total loans and leases $106,207 $98,669 $91,686 $83,591 $75,023
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