BB&T 2010 Annual Report Download - page 84

BB&T holds public funds in certain states that do not require 100% collateralization on public fund bank
deposits. In these states, should the failure of another public fund depository institution result in a loss for the
public entity, the resulting shortfall would have to be absorbed on a pro-rata basis by the remaining financial
institutions holding public funds in that state.
BB&T has investments and future funding commitments to certain venture capital funds. As of December 31,
2010, BB&T had investments of $266 million related to these ventures and future funding commitments of $185
million. BB&T’s risk exposure relating to such commitments is generally limited to the amount of investments
and future funding commitments made.
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. 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.
As a member of the Federal Home Loan Bank of Atlanta (“FHLB”), BB&T is required to maintain a
minimum investment in capital stock. The board of directors of the FHLB can increase the minimum investment
requirements in the event it has concluded that additional capital is required to allow it to meet its own
regulatory capital requirements. Any increase in the minimum investment requirements outside of specified
ranges requires the approval of the Federal Housing Finance Agency. Because the extent of any obligation to
increase BB&T’s investment in the FHLB depends entirely upon the occurrence of a future event, potential
future payments to the FHLB are not determinable.
In the normal course of business, BB&T is also a party to financial instruments to meet the financing needs of
clients and to mitigate exposure to interest rate risk. Such financial instruments include commitments to extend
credit and certain contractual agreements, including standby letters of credit and financial guarantee
arrangements. Further discussion of these commitments is included in Note 16 “Commitments and
Contingencies” in the “Notes to Consolidated Financial Statements.”
BB&T’s significant commitments and obligations are summarized in the accompanying table. Not all of the
commitments presented in the table will be used thus the actual cash requirements are likely to be significantly
less than the amounts reported.
Table 27
Summary of Significant Commitments
December 31, 2010
(Dollars in millions)
Lines of credit $14,486
Letters of credit and financial guarantees written 7,291
Other commitments (1) 22,431
Total significant commitments $44,208
(1) Other commitments include unfunded business loan commitments, unfunded overdraft protection on demand
deposit accounts and other unfunded commitments to lend.
Related Party Transactions
The Corporation may extend credit to certain officers and directors in the ordinary course of business. These
loans are made under substantially the same terms as comparable third-party lending arrangements and are in
compliance with applicable banking regulations.
Capital
The maintenance of appropriate levels of capital is a management priority and is monitored on a regular
basis. BB&T’s principal goals related to the maintenance of capital are to provide adequate capital to support
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