BB&T 2014 Annual Report Download - page 51

Table of Contents
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 generated a net loss of $509 million in 2013, compared to net income of $45 million in the prior year. The net loss was primarily
the result of $516 million in adjustments for uncertain income tax positions as previously described.
Segment net interest income decreased $153 million to $298 million, primarily attributable to runoff of loans acquired from the FDIC.
The $136 million increase in noninterest income primarily reflects the gain on the sale of a consumer lending subsidiary totaling $31 million, higher income
from assets related to certain post-employment benefits, higher securities gains in the investment portfolio and higher FDIC loss share income.
The $84 million increase in noninterest expense was primarily attributable to personnel expense related to certain post-employment benefits mentioned
above, as well as higher professional services, data processing software, and IT professional services expense related to corporate project initiatives.
Analysis of Financial Condition
Investment Activities
BB&T’s board-approved 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 goals of the investment portfolio are: (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 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.
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Source: BB&T CORP, 10-K, February 25, 2015 Powered by Morningstar® Document Research℠
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