BB&T 2010 Annual Report Download - page 149

NOTE 17. Regulatory Requirements and Other Restrictions
Branch Bank and BB&T FSB are required by the Board of Governors of the Federal Reserve System to
maintain reserve balances in the form of vault cash or deposits with the Federal Reserve Bank based on specified
percentages of certain deposit types, subject to various adjustments. At December 31, 2010, the net reserve
requirement amounted to $361 million.
Branch Bank is subject to laws and regulations that limit the amount of dividends it can pay. In addition,
both BB&T and Branch Bank are subject to various regulatory restrictions relating to the payment of dividends,
including requirements to maintain capital at or above regulatory minimums, and to remain “well-capitalized”
under the prompt corrective action regulations. BB&T does not expect that any of these laws, regulations or
policies will materially affect the ability of Branch Bank to pay dividends.
BB&T is subject to various regulatory capital requirements administered by the Federal banking agencies.
Failure to meet minimum capital requirements can initiate certain mandatory—and possibly additional
discretionary—actions by regulators that, if undertaken, could have a direct material effect on BB&T’s financial
statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the
Corporation must meet specific capital guidelines that involve quantitative measures of BB&T’s assets, liabilities
and certain off-balance-sheet items calculated pursuant to regulatory directives. BB&T’s capital amounts and
classification also are subject to qualitative judgments by the regulators about components, risk weightings and
other factors. BB&T is in full compliance with these requirements. Banking regulations also identify five capital
categories for insured depository institutions: well-capitalized, adequately capitalized, undercapitalized,
significantly undercapitalized and critically undercapitalized. At December 31, 2010 and 2009, BB&T and Branch
Bank were classified as “well capitalized”.
Quantitative measures established by regulation to ensure capital adequacy require BB&T to maintain
minimum amounts and ratios of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as
defined), and of Tier 1 capital to average tangible assets (leverage ratio).
The following table provides summary information regarding regulatory capital for BB&T and Branch Bank
as of December 31, 2010 and 2009:
December 31, 2010 December 31, 2009
Actual Capital Capital Requirements Actual Capital Capital Requirements
Ratio Amount Minimum Well-Capitalized Ratio Amount Minimum Well-Capitalized
(Dollars in millions)
Tier 1 Capital
BB&T 11.8% $13,959 $4,725 $ 7,088 11.5% $13,456 $4,687 $7,030
Branch Bank 13.0 14,650 4,499 6,749 12.1 13,544 4,480 6,720
Total Capital
BB&T 15.5 18,319 9,450 11,813 15.8 18,470 9,373 11,717
Branch Bank 15.5 17,417 8,998 11,248 14.6 16,404 8,960 11,200
Leverage Capital
BB&T 9.1 13,959 6,134 7,667 8.5 13,456 6,322 7,903
Branch Bank 9.9 14,650 4,425 7,375 8.9 13,544 4,566 7,610
As an approved seller/servicer, Branch Bank is required to maintain minimum levels of shareholders’ equity,
as specified by various agencies, including the United States Department of Housing and Urban Development,
Government National Mortgage Association, Federal Home Loan Mortgage Corporation and Federal National
Mortgage Association. At December 31, 2010 and 2009, Branch Bank’s equity was above all required levels.
At December 31, 2010 and 2009, BB&T had segregated cash deposits totaling $309 million and $270 million,
respectively. These deposits relate to monies held for the exclusive benefit of clients, primarily at BB&T’s broker/
dealer subsidiaries.
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