BB&T 2011 Annual Report Download - page 81

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, 2011,
BB&T had investments of $261 million related to these ventures and future funding commitments of $129 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. However, based on recent payouts and current projections, any payments made in relation to these
agreements are not expected to be material to BB&T’s results of operations, financial position or cash flows.
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 15 “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 34
Summary of Significant Commitments
December 31, 2011
(Dollars in millions)
Lines of credit $ 14,991
Letters of credit and financial guarantees written 6,095
Other commitments (1) 25,258
Total significant commitments $ 46,344
(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.
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