BB&T 2013 Annual Report Download - page 69

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Short-term Borrowings
BB&T also uses various types of short-term borrowings in meeting funding needs. While deposits remain the primary source
for funding loan originations, management uses short-term borrowings as a supplementary funding source for loan growth
and other balance sheet management purposes. Short-term borrowings were 2.5% of total funding on average in 2013 as
compared to 1.9% in 2012. See Note 7 “Short-Term Borrowings” in the “Notes to Consolidated Financial Statements” herein
for further disclosure. The types of short-term borrowings that have been, or may be, used by the Company include Federal
funds purchased, securities sold under repurchase agreements, master notes, commercial paper and short-term bank notes. All
securities sold under repurchase agreements are reflected as collateralized borrowings on the balance sheet. Short-term
borrowings at the end of 2013 were $4.1 billion, an increase of $1.3 billion, or 44.5%, compared to year-end 2012. Average
short-term borrowings totaled $4.5 billion during 2013 compared to $3.4 billion last year, an increase of 30.8%. The increase
in the average balance during 2013 primarily reflects the managed reduction in non-client certificates of deposit.
The following table summarizes certain information for the past three years with respect to short-term borrowings:
Table 30
Short-Term Borrowings
As Of / For The Years Ended December 31,
2013 2012 2011
(Dollars in millions)
Securities Sold Under Agreements to Repurchase:
Maximum outstanding at any month-end during the year $ 1,537 $ 813 $ 1,176
Balance outstanding at end of year 463 514 619
Average outstanding during the year 662 651 956
Average interest rate during the year 0.25 % 0.30 % 0.73 %
Average interest rate at end of year 0.28 0.33 0.31
Federal Funds Purchased and Short-Term Borrowed Funds:
Maximum outstanding at any month-end during the year $ 4,722 $ 3,627 $ 9,350
Balance outstanding at end of year 3,675 2,350 2,947
Average outstanding during the year 3,797 2,757 4,233
Average interest rate during the year 0.13 % 0.20 % 0.10 %
Average interest rate at end of year 0.09 0.19 0.17
Long-term Debt
Long-term debt provides funding and, to a lesser extent, regulatory capital. During 2013, long-term debt represented 10.6%
of average total funding compared to 11.6% during 2012. At December 31, 2013, long-term debt totaled $21.5 billion, an
increase of $2.4 billion compared to year-end 2012. The increase in long-term debt is primarily due to Branch Bank senior
note issuances to obtain liquidity at attractive rates. The average cost of long-term debt was 3.03% in 2013, compared to
3.02% in 2012. See Note 9 “Long-Term Debt” in the “Notes to Consolidated Financial Statements” herein for further
disclosure.
Exclusive of hedge basis adjustments, FHLB advances represented 37.7% of total outstanding long-term debt at
December 31, 2013; senior notes of BB&T represented 30.5% of the year-end balance; subordinated notes of BB&T
represented 10.1% of the year-end balance; senior notes of Branch Bank represented 14.7% of the year-end balance; and
subordinated notes of Branch Bank represented 4.6% of the year-end balance. FHLB advances are cost-effective long-term
funding sources that provide flexibility to structure the debt in a manner that aids in the management of interest rate risk and
liquidity.
Effective January 28, 2014, BB&T issued $1.1 billion of senior notes with a combination of fixed and floating interest rates.
These notes mature in 2019.