BB&T 2013 Annual Report Download - page 13

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In addition to the CCAR process, the Dodd-Frank Act requires the FRB to conduct an annual supervisory stress test for
BHCs such as BB&T with $50 billion or more of total consolidated assets and to conduct semi-annual company-run stress
tests. In October 2012, the FRB adopted final stress testing rules for covered BHCs that describe the types of supervisory
scenarios that may be provided in connection with the annual CCAR process and require that BB&T (as well as other
covered BHCs) conduct a separate mid-year stress test, file the results of such test with the FRB in early July and publicly
disclose details of the scenario and the impact on BHC capital by the end of September of each year. On September 20, 2013,
BB&T released the results of its company-run midcycle stress test, which are available in the Additional Disclosures section
of the Investor Relations site on www.bbt.com/about.
The Dodd-Frank Act also requires the FDIC to conduct an annual supervisory stress test for FDIC-insured state nonmember
banks such as Branch Bank with $50 billion or more of total consolidated assets and requires such institutions to conduct
annual company-run stress tests. The FDIC adopted final annual stress testing rules in October 2012. The results of the
annual supervisory stress test are included in the annual capital plan submitted to the FDIC.
Acquisitions
BB&T complies with numerous laws related to its acquisition activity. Under the BHCA, a BHC may not directly or
indirectly acquire ownership or control of more than 5% of the voting shares or substantially all of the assets of any BHC or
bank or merge or consolidate with another BHC without the prior approval of the FRB. Current federal law authorizes
interstate acquisitions of banks and BHCs without geographic limitation. Furthermore, a bank headquartered in one state is
authorized to merge with a bank headquartered in another state, subject to any state requirement that the target bank shall
have been in existence and operating for a minimum period of time, not to exceed five years; and subject to certain deposit
market-share limitations. After a bank has established branches in a state through an interstate merger transaction, the bank
may establish and acquire additional branches at any location in the state where a bank headquartered in that state could have
established or acquired branches under applicable federal or state law. These regulatory considerations are applicable to
privately negotiated acquisition transactions.
Other Safety and Soundness Regulations
The FRB has enforcement powers over BHCs and their nonbanking subsidiaries. The FRB has authority to prohibit activities
that represent unsafe or unsound practices or constitute violations of law, rule, regulation, administrative order or written
agreement with a federal regulator. These powers may be exercised through the issuance of cease and desist orders, civil
money penalties or other actions.
There also are a number of obligations and restrictions imposed on BHCs and their depository institution subsidiaries by
federal law and regulatory policy that are designed to reduce potential loss exposure to the depositors of such depository
institutions and to the FDIC insurance fund in the event the depository institution is insolvent or is in danger of becoming
insolvent. For example, under requirements of the FRB with respect to BHC operations, a BHC is required to serve as a
source of financial strength to its subsidiary depository institutions and to commit financial resources to support such
institutions in circumstances where it might not do so otherwise. In addition, the “cross-guarantee” provisions of federal law
require insured depository institutions under common control to reimburse the FDIC for any loss suffered or reasonably
anticipated by the DIF as a result of the insolvency of commonly controlled insured depository institutions or for any
assistance provided by the FDIC to commonly controlled insured depository institutions in danger of failure. The FDIC may
decline to enforce the cross-guarantee provision if it determines that a waiver is in the best interests of the DIF. The FDIC’s
claim for reimbursement under the cross-guarantee provisions is superior to claims of shareholders of the insured depository
institution or its holding company but is subordinate to claims of depositors, secured creditors and nonaffiliated holders of
subordinated debt of the commonly controlled insured depository institution.
Federal and state banking regulators also have broad enforcement powers over Branch Bank, including the power to impose
fines and other civil and criminal penalties, and to appoint a receiver in order to conserve the assets of any such institution for
the benefit of depositors and other creditors. The North Carolina Commissioner of Banks also has the authority to take
possession of a North Carolina state bank in certain circumstances, including, among other things, when it appears that such
bank has violated its charter or any applicable laws, is conducting its business in an unauthorized or unsafe manner, is in an
unsafe or unsound condition to transact its business or has an impairment of its capital stock.