BB&T 2013 Annual Report Download - page 57

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57
Lending Activities
The primary goal of the BB&T lending function is to help clients achieve their financial goals by providing quality loan
products that are fair to the client and profitable to the Company. Management believes that this purpose can best be
accomplished by building strong, profitable client relationships over time, with BB&T becoming an important contributor to
the prosperity and well-being of its clients. In addition to the importance placed on client knowledge and continuous
involvement with clients, BB&T’s lending process incorporates the standards of a consistent company-wide credit culture
and an in-depth local market knowledge. Furthermore, the Company employs strict underwriting criteria governing the
degree of assumed risk and the diversity of the loan portfolio in terms of type, industry and geographical concentration. In
this context, BB&T strives to meet the credit needs of businesses and consumers in its markets while pursuing a balanced
strategy of loan profitability, loan growth and loan quality.
Table 16
Quarterly Average Balances of Loans and Leases
For the Three Months Ended
12/31/13 9/30/13 6/30/13 3/31/13 12/31/12
(Dollars in millions)
Commercial:
Commercial and industrial $ 38,101 $ 38,446 $ 38,359 $ 37,916 $ 38,022
CRE - other 11,494 11,344 11,411 11,422 11,032
CRE - residential ADC 970 1,022 1,121 1,238 1,398
Direct retail lending 15,998 16,112 15,936 15,757 15,767
Sales finance 9,262 8,992 8,520 7,838 7,724
Revolving credit 2,357 2,308 2,268 2,279 2,280
Residential mortgage 23,979 23,403 23,391 23,618 23,820
Other lending subsidiaries 10,448 11,018 10,407 9,988 10,051
Total average loans and leases held for
investment (excluding covered loans) 112,609 112,645 111,413 110,056 110,094
Covered 2,186 2,502 2,858 3,133 3,477
Total average loans and leases held
for investment 114,795 115,147 114,271 113,189 113,571
LHFS 2,206 3,118 3,581 3,792 3,532
Total average loans and leases $ 117,001 $ 118,265 $ 117,852 $ 116,981 $ 117,103
Average loans held for investment for the fourth quarter of 2013 declined $352 million, or an annualized 1.2%, compared to
the third quarter. Loan growth for the fourth quarter was negatively impacted by the sale of a consumer lending subsidiary
with loans totaling approximately $500 million early in the fourth quarter. In connection with this transaction, approximately
$230 million of loans that were previously reported within the other lending subsidiaries portfolio were transferred to the
residential mortgage loan portfolio. Excluding the impact of the loan sale described above, average loans held for investment
were up 0.3% annualized compared to the prior quarter.
Average residential mortgage loans increased $576 million, or 9.8% annualized, compared to the prior quarter. Excluding the
estimated impact of the loan transfer described above, average residential mortgage loans increased approximately 6.0%
annualized, which primarily reflects the decision in the fourth quarter to retain 10 to 15 year mortgage loan production in the
held for investment portfolio. The average sales finance portfolio increased $270 million, or 11.9% annualized, based on
continued strength in the prime automobile lending market as dealer floor plan financing has been a strategic focus. Average
CRE – other loan balances were $150 million higher than the prior quarter, which reflects growth in lending related to multi-
family residential construction, office, retail and industrial clients.
Average other lending subsidiaries loans decreased $570 million compared to the prior quarter. Excluding the estimated
impact of the subsidiary sale and related loan transfer described above, average other lending subsidiaries loans increased by
approximately 3.5% on an annualized basis. This increase was primarily driven by growth in the equipment finance and small
ticket consumer finance portfolios, which totaled $70 million and $84 million, respectively. Average commercial and
industrial loans decreased $345 million compared to the prior quarter due to lower mortgage warehouse lending average
balances. Loan growth continued to be negatively impacted by expected declines in the covered and CRE – residential ADC
loan portfolios, which decreased $316 million and $52 million, respectively.