BB&T 2013 Annual Report Download - page 78

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BB&T also monitors the ability to meet customer demand for funds under both normal and stressed market conditions. In
considering its liquidity position, management evaluates BB&T’s funding mix based on client core funding, client rate-
sensitive funding and non-client rate-sensitive funding. In addition, management also evaluates exposure to rate-sensitive
funding sources that mature in one year or less. Management also measures liquidity needs against 30 days of stressed cash
outflows for Branch Bank. To ensure a strong liquidity position, management maintains a liquid asset buffer of cash on hand
and highly liquid unpledged securities. The Company has established a policy that the liquid asset buffer would be a
minimum of 5% of total assets, but intends to maintain the ratio well in excess of this level. As of December 31, 2013 and
December 31, 2012, BB&T’s liquid asset buffer was 14.6% and 11.1%, respectively, of total assets.
The ability to raise funding at competitive prices is affected by the rating agencies’ views of the Parent Company’s and
Branch Bank’s credit quality, liquidity, capital and earnings. Management meets with the rating agencies on a regular basis to
discuss current outlooks. The ratings for BB&T and Branch Bank by the four major rating agencies are detailed in the table
below:
Table 34
Credit Ratings of BB&T Corporation and Branch Bank
December 31, 2013
S&P Moody's Fitch DBRS
BB&T Corporation:
Commercial Paper A-2 P-1 F1 R-1(low)
Issuer A- A2 A+ A(high)
LT/Senior debt A- A2 A+ A(high)
Subordinated debt BBB+ A3 A A
Branch Bank:
Bank financial strength N/A B- a+ N/A
Long term deposits N/A A1 AA- AA(low)
LT/Senior unsecured bank notes A A1 A+ AA(low)
Other long term senior obligations A A1 A+ AA(low)
Other short term senior obligations A-1 P-1 F1 R-1(middle)
Short term bank notes A-1 P-1 F1 R-1(middle)
Short term deposits N/A P-1 F1+ R-1(middle)
Subordinated bank notes A- A2 A A(high)
Ratings Outlook:
Credit Trend Negative Negative Stable Stable
BB&T and Branch Bank have Contingency Funding Plans designed to ensure that liquidity sources are sufficient to meet
their ongoing obligations and commitments, particularly in the event of a liquidity contraction. These plans are designed to
examine and quantify the organization’s liquidity under various “stress” scenarios. Additionally, the plans provide a
framework for management and other critical personnel to follow in the event of a liquidity contraction or in anticipation of
such an event. The plans address authority for activation and decision making, liquidity options and the responsibilities of
key departments in the event of a liquidity contraction. The liquidity options available to management could include seeking
secured funding, asset sales, and under the most extreme scenarios, curtailing new loan originations.
Management believes current sources of liquidity are adequate to meet BB&T’s current requirements and plans for continued
growth. See Note 4 “Premises and Equipment,” Note 9 “Long-Term Debt” and Note 14 “Commitments and Contingencies”
in the “Notes to Consolidated Financial Statements” for additional information regarding outstanding balances of sources of
liquidity and contractual commitments and obligations.
Contractual Obligations, Commitments, Contingent Liabilities, Off-Balance Sheet Arrangements, And Related Party
Transactions
The following table presents, as of December 31, 2013, BB&T’s contractual obligations by payment date. The payment
amounts represent those amounts contractually due to the recipient. The table excludes liabilities recorded where
management cannot reasonably estimate the timing of any payments that may be required in connection with these liabilities.
Further discussion of the nature of each obligation is included in Note 14 “Commitments and Contingencies” in the “Notes to
Consolidated Financial Statements.”