BB&T 2011 Annual Report Download - page 144

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Deposit liabilities: The fair values for demand deposits, interest-checking accounts, savings accounts and certain money
market accounts are, by definition, equal to the amount payable on demand at the reporting date. Fair values for
certificates of deposit are estimated using a discounted cash flow calculation that applies current interest rates to aggregate
expected maturities. In addition, nonfinancial instruments such as core deposit intangibles are not recorded at fair value.
BB&T has developed long-term relationships with its customers through its deposit base and in the opinion of
management, these items add significant value to BB&T.
Federal funds purchased, securities sold under repurchase agreements and short-term borrowed funds: The carrying
amounts of Federal funds purchased, borrowings under repurchase agreements and short-term borrowed funds
approximate their fair values.
Long-term debt: The fair values of long-term debt are estimated based on quoted market prices for the instrument if
available, or for similar instruments if not available, or by using discounted cash flow analyses, based on BB&T’s current
incremental borrowing rates for similar types of instruments.
Contractual commitments: The fair values of commitments are estimated using the fees charged to enter into similar
agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the
counterparties. For fixed-rate loan commitments, fair values also consider the difference between current levels of interest
rates and the committed rates. The fair values of guarantees and letters of credit are estimated based on the counterparties’
creditworthiness and average default rates for loan products with similar risks. The fair values of commitments to fund
affordable housing investments are estimated using the net present value of future commitments.
The following is a summary of the carrying amounts and fair values of those financial assets and liabilities that BB&T has
not recorded at fair value:
December 31,
2011 2010
Carrying
Amount Fair Value
Carrying
Amount Fair Value
(Dollars in millions)
Financial assets:
Securities held to maturity (1) $ 14,094 $ 14,098 $ — $ —
Loans and leases (2)(3) 105,213 104,855 101,380 100,360
Financial liabilities:
Deposits 124,939 124,853 107,213 104,091
Long-term debt 21,803 23,001 21,730 22,733
(1) The carrying value excludes amounts deferred in other comprehensive income resulting from the transfer of
securities available for sale to securities held to maturity.
(2) December 31, 2010 balance includes loans held for sale carried at the lower of cost or market.
(3) The carrying value is net of the allowance for loan and lease losses.
The following is a summary of the notional or contractual amounts and fair values of BB&T’s off-balance sheet financial
instruments as of the periods indicated:
December 31,
2011 2010
Notional/
Contract
Amount Fair Value
Notional/
Contract
Amount Fair Value
(Dollars in millions)
Contractual commitments:
Commitments to extend, originate or purchase
credit $ 40,249 $ 71 $ 36,917 $ 65
Residential mortgage loans sold with recourse 1,316 6 1,624 6
Other loans sold with recourse 4,520 15 4,352 19
Letters of credit and financial guarantees written 6,095 27 7,291 41
Commitments to fund affordable housing
investments 394 386 334 316
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