BB&T 2012 Annual Report Download - page 69

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Insurance Services
Insurance Services net income was $144 million in 2012, an increase of $43 million, or 42.6%, compared to 2011. The
increase in net income was driven by acquisitions and improving premium pricing in the property and casualty insurance
business.
Noninterest income increased $325 million, or 31.3%, to $1.4 billion. The increase in noninterest income was primarily
driven by higher life insurance, property and casualty insurance and employee benefits commissions. The life insurance and
property and casualty operations of Crump Insurance, which was acquired on April 2, 2012, contributed $234 million of
insurance income. Property and casualty insurance commission growth was partially attributable to improvement in premium
pricing compared to the prior year. Employee benefits commission growth was primarily due to the acquisitions of Precept, a
full-service employee benefits consulting and administrative solutions firm with offices in Irvine and San Ramon, California
and Liberty Benefit Insurance Services, a full-service employee benefits broker located in San Jose, California, in the fourth
quarter of 2011.
Noninterest expenses incurred within the Insurance Services segment increased $229 million, or 29.1%, in 2012. The
increase in noninterest expenses was primarily due to the Crump Insurance acquisition and related personnel expense,
occupancy expense and amortization of intangibles.
Financial Services
Financial Services net income was $286 million in 2012, up $13 million, or 4.8%, compared to 2011.
Segment net interest income for Financial Services increased $77 million, or 20.6%, to $451 million in 2012. The increase in
segment net interest income during 2012 was primarily attributable to strong organic loan and deposit growth by Corporate
Banking and BB&T Wealth, partially offset by a lower NIM for both businesses.
The allocated provision for loan and lease losses increased $11 million to $10 million in 2012 as the result of reserve rate
adjustments related to the commercial and industrial loan portfolio, combined with overall growth in the loan portfolio.
Noninterest income for Financial Services increased $31 million, or 4.5%, to $725 million in 2012. The increase in
noninterest income was primarily due to higher investment banking and brokerage fees and commissions, trust and
investment advisory revenues and commercial loan fees.
Noninterest expense incurred by Financial Services increased $67 million, or 11.7%, to $641 million in 2012, primarily due
to higher personnel expense and intercompany expense. The increase in noninterest expense in 2012 was driven by
continued efforts to expand the national lending teams in Corporate Banking and by the associated increases in incentive
expenses tied to the strong income growth in the LOBs.
Other, Treasury & Corporate
Net income in Other, Treasury & Corporate can vary due to changing needs of the Company, including the size of the
investment portfolio, the need for wholesale funding, income received from derivatives used to hedge the balance sheet and,
in certain cases, income associated with acquisition activities. Other, Treasury & Corporate’ s 2012 results reflect the income
from BankAtlantic from the acquisition date to the systems conversion date in October 2012. Other, Treasury & Corporate
generated net income of $37 million in 2012 compared to a net loss of $7 million in the prior year.
The increase in segment net interest income was primarily due to a decrease in FTP funding credits on deposits allocated to
the Community Banking segment. The decrease in the allocated provision for loan losses was primarily the result of a
decline in the provision for covered loans. The decrease in noninterest income was primarily due to higher securities gains in
the prior year, increased write-downs on affordable housing investments and lower FDIC loss share income. The decrease in
allocated corporate expenses was primarily due to changes in intersegment service center allocations.
2011 compared to 2010
Community Banking
Community Banking had a network of 1,779 banking offices at the end of 2011, a decrease of 3 offices compared to 1,782
banking offices at December 31, 2010. The decrease in offices was the result of closing low volume branches partially offset
by de novo branch openings. Net income attributable to Community Banking increased $460 million to $536 million in
2011.