BB&T 2012 Annual Report Download - page 107

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NOTE 1. Summary of Significant Accounting Policies
General
See the Glossary of Defined Terms at the beginning of this Report for terms used throughout the consolidated financial
statements and related notes of this Form 10-K.
BB&T is a financial holding company organized under the laws of North Carolina. BB&T conducts operations through its
principal bank subsidiary, Branch Bank and its nonbank subsidiaries.
The accounting and reporting policies of BB&T and its subsidiaries are in accordance with 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, Virginia, Florida, Georgia, Maryland, South Carolina, West Virginia, Kentucky,
Alabama, Tennessee, Texas, Washington D.C and Indiana. 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 CRE; 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 financing, 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 VIEs. VIEs 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 required if a reporting entity is the primary
beneficiary of the VIE.
BB&T evaluates its investments in VIEs to determine if BB&T is the primary beneficiary of the VIE. 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 VIEs.
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 VIEs, BB&T also has
investments in, and future funding commitments to, private equity investments.
BB&T has investments in certain entities for which BB&T does not have a controlling interest. For these investments, the
Company records its portion of income or loss in other noninterest income in the Consolidated Statements of Income. BB&T
periodically evaluates these investments for impairment.