BB&T 2011 Annual Report Download - page 51

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In 2010, management executed two major strategies to strengthen the balance sheet. In the second quarter of 2010,
management executed a deleveraging strategy to better position BB&T’s balance sheet for a rising rate environment and
achieve a better mix of earning assets. In connection with this strategy, management reduced the balance sheet by
approximately $8 billion through the sale of securities. During the third and fourth quarters of 2010, management
executed a strategy to further de-risk the available-for-sale securities portfolio. The de-risking strategy was aimed at
further reducing the duration of the securities portfolio and reducing the risk of charges to other comprehensive income in
a rising rate environment. Also to further protect against the risk of a rising rate environment, management replaced a
portion of the securities sold with floating-rate securities. As of December 31, 2010, approximately 28% of the
available-for-sale securities portfolio was floating rate. In addition, management sold approximately $400 million of
non-agency mortgage-backed securities to reduce the potential for future credit losses. These strategies were the primary
driver in generating net securities gains during 2010. Primarily in connection with these strategies, BB&T sold a total of
$31.3 billion in available-for-sale securities during 2010, which produced net securities gains of $585 million. In addition,
BB&T recognized $31 million in charges for other-than-temporary impairment related to BB&T’s portfolio of non-agency
mortgage-backed securities.
Refer to Note 2 “Securities” in the “Notes to Consolidated Financial Statements” herein for additional disclosures related
to BB&T’s evaluation of securities for other-than-temporary impairment.
51