BB&T 2015 Annual Report Download - page 78

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Branch Bank has several major sources of funding to meet its liquidity requirements, including access to capital markets through issuance of senior or
subordinated bank notes and institutional CDs, access to the FHLB system, dealer repurchase agreements and repurchase agreements with commercial clients,
access to the overnight and term Federal funds markets, use of a Cayman branch facility, access to retail brokered CDs and a borrower in custody program
with the FRB for the discount window. As of December 31, 2015, BB&T has approximately $70.6 billion of secured borrowing capacity, which represents
approximately 6.3 times the amount of one year wholesale funding maturities.
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 major rating agencies are detailed in the table below:



   
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+ A2 A A
Branch Bank:
Bank financial strength N/A N/A a+ N/A
Long term deposits N/A Aa1 AA- AA(low)
LT/Senior unsecured bank notes A A1 A+ AA(low)
Long term issuer A A1 A+ A(high)
Other long term senior obligations A N/A A+ AA(low)
Other short term senior obligations A-1 N/A 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 Stable Stable 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 5 “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, 2015, 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.”
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Source: BB&T CORP, 10-K, February 25, 2016 Powered by Morningstar® Document Research℠
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