BB&T 2013 Annual Report Download - page 128

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NOTE 15. Regulatory Requirements and Other Restrictions
Branch Bank is required by the FRB to maintain reserve balances in the form of vault cash or deposits with the FRB based on
specified percentages of certain deposit types, subject to various adjustments. At December 31, 2013, the net reserve
requirement amounted to $303 million.
Branch Bank is subject to laws and regulations that limit the amount of dividends it can pay. In addition, both BB&T and
Branch Bank are subject to various regulatory restrictions relating to the payment of dividends, including requirements to
maintain capital at or above regulatory minimums, and to remain “well-capitalized” under the prompt corrective action
regulations. BB&T does not expect that any of these laws, regulations or policies will materially affect the ability of Branch
Bank to pay dividends.
BB&T is subject to various regulatory capital requirements administered by the Federal banking agencies. Failure to meet
minimum capital requirements can initiate certain mandatory—and possibly additional discretionary—actions by regulators
that, if undertaken, could have a direct material effect on the financial statements. Under capital adequacy guidelines and the
regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve
quantitative measures of assets, liabilities and certain off-balance-sheet items calculated pursuant to regulatory directives.
BB&T’s capital amounts and classification also are subject to qualitative judgments by the regulators about components, risk
weightings and other factors. BB&T is in full compliance with these requirements. Banking regulations also identify five
capital categories for insured depository institutions: well-capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized and critically undercapitalized. At December 31, 2013 and 2012, BB&T and Branch Bank were classified as
“well-capitalized.”
Quantitative measures established by regulation to ensure capital adequacy require BB&T to maintain minimum amounts and
ratios of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital to
average tangible assets (leverage ratio).
Risk-based capital ratios, which include Tier 1 Capital, Total Capital and Tier 1 Common Equity, are calculated based on
regulatory guidance related to the measurement of capital and risk-weighted assets. During the second quarter of 2013,
BB&T completed its reevaluation process related to calculating risk-weighted assets and determined that certain additional
adjustments were required in order to conform to regulatory guidance. These adjustments resulted in an increase to risk-
weighted assets and a decrease in BB&T’s risk-based capital ratios.
December 31, 2013 December 31, 2012
Actual Capital Capital Requirements Actual Capital Capital Requirements
Ratio Amount Minimum Well-Capitalized Ratio Amount Minimum Well-Capitalized
(Dollars in millions)
Tier 1 Capital:
BB&T 11.8 % $ 16,074 $ 5,460 $ 8,189 10.5 % $ 14,373 $ 5,455 $ 8,182
Branch Bank 11.9 15,785 5,315 7,973 11.2 14,587 5,202 7,803
Total Capital:
BB&T 14.3 19,514 10,919 13,649 13.4 18,267 10,909 13,637
Branch Bank 13.4 17,872 10,631 13,288 13.0 16,866 10,404 13,005
Leverage Capital:
BB&T 9.3 16,074 6,897 8,621 8.2 14,373 7,001 8,751
Branch Bank 9.4 15,785 5,058 8,429 8.6 14,587 5,099 8,498
As an approved seller/servicer, Branch Bank is required to maintain minimum levels of shareholders’ equity, as specified by
various agencies, including the United States Department of Housing and Urban Development, GNMA, FHLMC and FNMA.
At December 31, 2013 and 2012, Branch Bank’s equity was above all required levels.