BB&T 2015 Annual Report Download - page 140

TableofContents
A derivative is a financial instrument that derives its cash flows, and therefore its value, by reference to an underlying instrument, index or interest rate. For
additional disclosures related to BB&T’s derivatives refer to Note 18 “Derivative Financial Instruments.”
BB&T has sold certain mortgage-related loans that contain recourse provisions. These provisions generally require BB&T to reimburse the investor for a
share of any loss that is incurred after the disposal of the property. BB&T also issues standard representations and warranties related to mortgage loan sales to
GSEs. Refer to Note 7 “Loan Servicing” for additional disclosures related to these exposures.
In the ordinary course of business, BB&T indemnifies its officers and directors to the fullest extent permitted by law against liabilities arising from pending
litigation. BB&T also issues standard representations and warranties in underwriting agreements, merger and acquisition agreements, loan sales, brokerage
activities and other similar arrangements. Counterparties in many of these indemnification arrangements provide similar indemnifications to BB&T.
Although these agreements often do not specify limitations, BB&T does not believe that any payments related to these guarantees would materially change
the financial position or results of operations of BB&T.
Legal Proceedings
The nature of BB&T’s business ordinarily results in a certain amount of claims, litigation, investigations and legal and administrative cases and proceedings,
all of which are considered incidental to the normal conduct of business. BB&T believes it has meritorious defenses to the claims asserted against it in its
currently outstanding legal proceedings and, with respect to such legal proceedings, intends to continue to defend itself vigorously, litigating or settling
cases according to management’s judgment as to what is in the best interests of BB&T and its shareholders.
On at least a quarterly basis, liabilities and contingencies in connection with outstanding legal proceedings are assessed utilizing the latest information
available. For those matters where it is probable that BB&T will incur a loss and the amount of the loss can be reasonably estimated, a liability is recorded in
the consolidated financial statements. These legal reserves may be increased or decreased to reflect any relevant developments on at least a quarterly basis.
For other matters, where a loss is not probable or the amount of the loss is not estimable, legal reserves are not accrued. While the outcome of legal
proceedings is inherently uncertain, based on information currently available, advice of counsel and available insurance coverage, management believes that
the established legal reserves are adequate and the liabilities arising from legal proceedings will not have a material adverse effect on the consolidated
financial position, consolidated results of operations or consolidated cash flows. However, in the event of unexpected future developments, it is possible that
the ultimate resolution of these matters, if unfavorable, may be material to the consolidated financial position, consolidated results of operations or
consolidated cash flows of BB&T.
Pledged Assets
Certain assets were pledged to secure municipal deposits, securities sold under agreements to repurchase, borrowings and borrowing capacity, subject to any
applicable asset discount, at the FHLB and FRB as well as for other purposes as required or permitted by law. The following table provides the total carrying
amount of pledged assets by asset type, of which the majority are pursuant to agreements that do not permit the other party to sell or repledge the collateral.
Assets related to employee benefit plans have been excluded from the following table.

 

Pledged securities $ 14,063 $ 14,636
Pledged loans 69,070 67,248
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Source: BB&T CORP, 10-K, February 25, 2016 Powered by Morningstar® Document Research℠
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