BB&T 2010 Annual Report Download - page 113

NOTE 2. Business Combinations
Financial Institution Acquisitions
Colonial Bank
On August 14, 2009, Branch Bank entered into a purchase and assumption agreement with the Federal
Deposit Insurance Corporation (“FDIC”) to acquire certain assets and assume substantially all of the deposits
and certain liabilities of Colonial Bank, an Alabama state-chartered bank headquartered in Montgomery,
Alabama (“Colonial”). Colonial operated 357 locations in Florida, Alabama, Georgia, Texas and Nevada.
Excluding the effects of purchase accounting adjustments, Branch Bank assumed approximately $19.2 billion of
the deposits of Colonial. Additionally, Branch Bank purchased approximately $14.3 billion in loans, $165 million of
other real estate owned (“OREO”) and $3.7 billion of investment securities. Including subsequent adjustments
and the sale of Nevada deposits, approximately $484 million of goodwill and $170 million of identifiable intangibles
were recorded in connection with the Colonial acquisition.
Branch Bank did not immediately acquire the real estate, banking facilities, furniture or equipment of
Colonial as part of the purchase and assumption agreement. However, under the terms of the agreement, Branch
Bank had the option through February 1, 2010 to acquire these assets from the FDIC at their fair market value
as of the acquisition date. Prior to the exercise of this option, these banking facilities and equipment were leased
from the FDIC on a month-to-month basis. During 2010, Branch Bank purchased real estate, banking facilities,
furniture and equipment from the FDIC at a cost of approximately $210 million.
Branch Bank also had an option through February 1, 2010 to assume or repudiate certain lease agreements of
Colonial. The repudiation or assumption of these lease agreements was finalized prior to the expiration of this
option. The process to determine the fair value of the assumed lease obligations continued into the second quarter
of 2010 during which BB&T recorded approximately $28 million of capital leases.
On January 15, 2010, BB&T sold certain Nevada branch locations and approximately $850 million in deposits
that were acquired from Colonial.
In connection with the Colonial acquisition, Branch Bank entered into loss sharing agreements with the
FDIC related to certain assets acquired. The terms of the loss sharing agreements are described in Note 16.
Haven Trust Bank
On December 12, 2008, BB&T acquired all the deposits and $61 million in assets of Haven Trust Bank of
Duluth, Georgia through an agreement with the FDIC. Haven Trust Bank operated four branches with
approximately $506 million in deposits.
Insurance and Other Non-bank Acquisitions
During 2009, BB&T acquired certain assets of an insurance premium finance business, one insurance agency
and two commercial real estate servicing businesses. Including subsequent adjustments, approximately $38
million of goodwill and $26 million of identifiable intangibles were recorded in connection with these acquisitions.
During 2008, BB&T acquired eleven insurance businesses and one nonbank financial services company. Including
subsequent adjustments, approximately $252 million in goodwill and $155 million of identifiable intangible assets
were recorded in connection with these transactions.
Merger and acquisition agreements of businesses other than financial institutions occasionally include
additional incentives to the acquired entities to offset the loss of future cash flows previously received through
ownership positions. Typically, these incentives are based on the acquired entity’s contribution to BB&T’s
earnings compared to agreed-upon amounts. For transactions that occurred prior to January 1, 2009, such
incentives will be charged to goodwill based on the terms of the agreement. 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.
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