BB&T 2011 Annual Report Download - page 92

NOTE 1. Summary of Significant Accounting Policies
General
BB&T Corporation (“BB&T”, the “Company” or “Parent Company”) is a financial holding company organized under the laws
of North Carolina. BB&T conducts operations through its principal bank subsidiary, Branch Banking and Trust Company
(“Branch Bank”), a federally chartered thrift institution, BB&T Financial, FSB (“BB&T FSB”) and its nonbank subsidiaries.
The accounting and reporting policies of BB&T and its subsidiaries are in accordance with accounting principles
generally accepted in the United States of America (“GAAP”). Additionally, where applicable, the policies conform to the
accounting and reporting guidelines prescribed by bank regulatory authorities. The following is a summary of BB&T’s
more significant accounting policies.
Nature of Operations
Branch Bank has offices in North Carolina, South Carolina, Virginia, Maryland, Georgia, West Virginia, Tennessee,
Kentucky, Florida, Alabama, Indiana, Texas and Washington, D.C. Branch Bank provides a wide range of banking
services to individuals and businesses, and offers a variety of loans to businesses and consumers. Such loans are made
primarily to individuals residing in the market areas described above or to businesses located within BB&T’s geographic
footprint. Branch Bank also markets a wide range of deposit services to individuals, businesses and public entities. Branch
Bank offers, either directly, or through its subsidiaries, lease financing to businesses and municipal governments;
factoring; discount brokerage services, annuities and mutual funds; life insurance, property and casualty insurance, health
insurance and commercial general liability insurance on an agency basis and through a wholesale insurance brokerage
operation; insurance premium financing; permanent financing arrangements for commercial real estate; loan servicing for
third-party investors; direct consumer finance loans to individuals; trust and retirement services, comprehensive wealth
advisory services and association services. BB&T FSB and the direct nonbank subsidiaries of BB&T provide a variety of
financial services including credit card lending, automobile lending, equipment financing, full-service securities
brokerage, asset management and capital markets services.
Principles of Consolidation
The consolidated financial statements of BB&T include the accounts of BB&T Corporation and those subsidiaries that are
majority owned by BB&T and over which BB&T exercises control. In consolidation, all significant intercompany accounts
and transactions are eliminated. The results of operations of companies or assets acquired are included only from the dates of
acquisition. All material wholly-owned and majority-owned subsidiaries are consolidated unless GAAP requires otherwise.
BB&T holds investments in certain legal entities that are considered variable interest entities (“VIE’s”). VIE’s are legal
entities in which equity investors do not have sufficient equity at risk for the entity to independently finance its activities,
or as a group, the holders of the equity investment at risk lack the power through voting or similar rights to direct the
activities of the entity that most significantly impact its economic performance, or do not have the obligation to absorb the
expected losses of the entity or the right to receive expected residual returns of the entity. Consolidation of a VIE is
considered appropriate if a reporting entity holds a controlling financial interest in the VIE.
BB&T evaluates its investments in VIE’s to determine if a controlling financial interest is held. This evaluation gives
appropriate consideration to the design of the entity and the variability that the entity was designed to pass along, the
relative power of each of the parties to the VIE, and to BB&T’s relative obligation to absorb losses or receive residual
returns of the entity, in relation to such obligations and rights held by other parties to the VIE. BB&T has variable
interests in certain entities that were not required to be consolidated, including affordable housing partnership interests,
historic tax credit partnerships, and other partnership interests. Refer to Note 15 for additional disclosures regarding
BB&T’s significant variable interest entities.
BB&T accounts for unconsolidated partnership and similar investments using the equity method of accounting. In
addition to affordable housing partnerships, which represent the majority of unconsolidated investments in variable
interest entities, BB&T also has investments and future funding commitments to venture capital and other entities. The
maximum potential exposure to losses relative to investments in variable interest entities is generally limited to the sum of
the outstanding balance, future funding commitments and any related loans to the entity. Loans to these entities are
underwritten in substantially the same manner as are other loans and are generally secured.
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