BB&T 2009 Annual Report Download - page 58

During the second quarter of 2009, BB&T issued $1.1 billion of senior unsecured notes. The notes were issued
in two tranches, $510 million 5.70% fixed-rate notes due in 2014 and $541 million 6.85% fixed-rate notes due in
2019. The proceeds from the offering, combined with the common stock offering completed during the second
quarter of 2009, and other funds, were used to fund the repurchase of the preferred stock issued to the U.S.
Treasury as part of the Capital Purchase Program. Also during the second quarter, BB&T recognized $36 million
in gains related to the repurchase of $218 million of subordinated debt.
During the third quarter of 2009, BB&T Capital Trust VI issued $575 million of capital securities. The
securities have a fixed interest rate of 9.60% and an initial maturity date of August 2064. These securities are
fully guaranteed by BB&T and qualify as Tier 1 capital, subject to certain limitations. In addition, BB&T
completed three separate issuances of senior debt during the third quarter for a total of $1.75 billion. BB&T
issued $1.0 billion of senior notes, with a fixed interest rate of 3.85% that mature in 2012, $500 million of senior
notes, with a fixed interest rate of 3.38%, that mature in 2013, and $250 million of senior notes, with a fixed
interest rate of 3.10%, that mature in 2011. The proceeds from all of these offerings are being used for general
corporate purposes. BB&T assumed $3.7 billion of FHLB advances in the Colonial acquisition, of which $2.8
billion were prepaid shortly after the acquisition.
During the fourth quarter of 2009, BB&T Capital Trust VII issued $350 million of capital securities. The
securities have a fixed interest rate of 8.10% and an initial maturity date of November 2064. These securities are
fully guaranteed by BB&T and qualify as Tier 1 capital, subject to certain limitations.
Liquidity needs are a primary consideration in evaluating funding sources. BB&T’s strategy is to maintain
funding flexibility in order that the Corporation may react rapidly to opportunities that may become available in
the marketplace. BB&T will continue to focus on traditional core funding strategies, supplemented as needed by
the types of borrowings discussed above. See “Liquidity” herein for additional discussion.
Shareholders’ Equity
Shareholders’ equity totaled $16.2 billion at December 31, 2009, an increase of $160 million, or 1.0%, from
year-end 2008. BB&T’s book value per common share at December 31, 2009 was $23.47, compared to $23.16 at
December 31, 2008.
On June 17, 2009, BB&T repurchased all 3,133.64 shares of its Fixed Rate Cumulative Perpetual Preferred
Stock, Series C, $1,000,000 liquidation preference per share (the “Series C Preferred Stock”) issued to the U.S.
Treasury on November 14, 2008, as part of the Capital Purchase Program. The aggregate purchase price paid to
the U.S. Treasury for the Series C Preferred Stock was approximately $3.1 billion, including approximately $14
million of accrued and unpaid dividends. On July 22, 2009, BB&T repurchased the warrant to purchase up to
13,902,573 shares of its common stock for $67 million, which was also issued to the U.S. Treasury on November 14,
2008, as part of the Capital Purchase Program.
On May 13, 2009, BB&T issued 86.25 million shares of common stock at $20 per share for net proceeds of $1.7
billion, and on August 21, 2009, BB&T issued 38.5 million shares of common stock at $26 per share, leading to net
proceeds of $963 million. The May issuance was primarily to fund a portion of the repurchase of the Series C
Preferred Stock. The August issuance was made in connection with the Colonial acquisition to further strengthen
BB&T’s capital levels.
In addition, growth of $159 million in shareholders’ equity resulted from BB&T’s earnings available to
common shareholders retained after dividends along with growth of $315 million from other comprehensive
income, which principally relates to increases in the fair values of available-for-sale securities and pension assets.
BB&T’s tangible shareholders’ equity available to common shareholders was $10.0 billion at December 31,
2009, an increase of $2.2 billion, or 28.4%, compared to December 31, 2008. BB&T’s tangible book value per
common share at December 31, 2009 was $14.44 compared to $13.87 at December 31, 2008. As of December 31,
2009, measures of tangible capital were not required by the regulators and, therefore, were considered
non-GAAP measures. Please refer to the section titled “Capital” herein for a discussion of how BB&T calculates
and uses these measures in the evaluation of the Company.
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