BB&T 2009 Annual Report Download - page 41

Short-term borrowings include Federal funds purchased, securities sold under repurchase agreements,
master notes, short-term bank notes, treasury tax and loan deposit notes payable and other short-term
borrowings. Average short-term borrowings totaled $12.5 billion for the year ended December 31, 2009, an
increase of $1.9 billion, or 18.1%, from 2008. BB&T also has used long-term debt for a significant portion of its
funding needs. Long-term debt includes Federal Home Loan Bank (“FHLB”) advances, other secured
borrowings by Branch Bank, capital securities issued by unconsolidated trusts and senior and subordinated debt
issued by the Corporation and Branch Bank. Average long-term debt totaled $19.1 billion for the year ended
December 31, 2009, a decrease of $754 million, or 3.8%, compared to 2008.
The compound annual rate of growth in average total assets for the five-year period ended December 31,
2009, was 10.0%. Over the same five-year period, average loans and leases increased at a compound annual rate of
9.1%, average securities increased at a compound annual rate of 12.1%, and average deposits grew at a compound
annual rate of 9.6%. These balance sheet growth rates include the effect of acquisitions, as well as internal
growth.
For more detailed discussions concerning the causes of these fluctuations, please refer to the sections that
follow.
Securities
The securities portfolio provides earnings and liquidity, and is managed as part of the overall asset and
liability management process to optimize net interest income and reduce exposure to interest rate risk.
Management has historically emphasized investments with duration of five years or less to provide flexibility in
managing the balance sheet in changing interest rate environments. Total securities increased 4.0% from
year-end 2008 to year-end 2009, to a total of $34.5 billion at December 31, 2009.
As of December 31, 2009, the total securities portfolio included $636 million in trading securities and $33.9
billion of available-for-sale securities. The available-for-sale portfolio comprised 98.2% of total securities at
December 31, 2009. Management believes that the high concentration of securities in the available-for-sale
portfolio allows flexibility in the management of the overall investment portfolio, consistent with the objectives of
optimizing profitability, mitigating interest rate risk, supporting capital and providing liquidity.
The following table provides information regarding the composition of BB&T’s securities portfolio for the
years presented:
Table 8
Composition of Securities Portfolio
December 31,
2009 2008 2007
(Dollars in millions)
Trading securities: $ 636 $ 376 $ 1,009
Securities available for sale:
U.S. government-sponsored entities (GSE) 2,035 1,333 9,807
Mortgage-backed securities issued by GSE 26,670 27,430 8,221
States and political subdivisions 2,107 2,077 1,392
Non-agency mortgage-backed securities 1,022 1,098 1,720
Equity and other securities 874 905 1,279
Covered securities 1,201 ——
Total securities available for sale 33,909 32,843 22,419
Total securities $34,545 $33,219 $23,428
Total securities available for sale increased $10.4 billion in 2008 compared to 2007, primarily as a result of
deploying the additional capital invested by the U.S Treasury in the fourth quarter of 2008 as part of the Capital
Purchase Program. While BB&T repaid the capital invested by the U.S. Treasury in the second quarter of 2009,
41