BB&T 2013 Annual Report Download - page 54

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54
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 $50 million in 2012 compared to net income of $40 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.
Analysis of Financial Condition
A review of the Company’s major balance sheet categories is presented below.
Investment Activities
BB&T’s investment activities are governed internally by a written, board-approved policy. The investment policy is carried
out by the MRLCC, which meets regularly to review the economic environment and establish investment strategies. The
MRLCC also has much broader responsibilities, which are discussed in the “Market Risk Management” section in
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” herein.
Investment strategies are reviewed by the MRLCC based on the interest rate environment, balance sheet mix, actual and
anticipated loan demand, funding opportunities and the overall interest rate sensitivity of the Company. In general, the
investment portfolio is managed in a manner appropriate to the attainment of the following goals: (i) to provide a sufficient
margin of liquid assets to meet unanticipated deposit and loan fluctuations and overall funds management objectives; (ii) to
provide eligible securities to secure public funds, trust deposits as prescribed by law and other borrowings; and (iii) to earn
the maximum return on funds invested that is commensurate with meeting the requirements of (i) and (ii).
Branch Bank invests in securities as allowable under bank regulations. These securities may include obligations of the U.S.
Treasury, U.S. government agencies, GSEs (including MBS), bank eligible obligations of any state or political subdivision,
non-agency MBS, structured notes, bank eligible corporate obligations (including corporate debentures), commercial paper,
negotiable CDs, bankers acceptances, mutual funds and limited types of equity securities. Branch Bank also may deal in
securities subject to the provisions of the Gramm-Leach-Bliley Act. BB&T’s full-service brokerage and investment banking
subsidiary engages in the underwriting, trading and sales of equity and debt securities subject to the risk management policies
of the Company.
The following table provides information regarding the composition of BB&T’s AFS and HTM securities portfolio for the
years presented: