BB&T 2015 Annual Report Download - page 98

TableofContents
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General
See the Glossary of Defined Terms at the beginning of this Report for terms used throughout the consolidated financial statements and related notes of this
Form 10-K.
The accounting and reporting policies are in accordance with GAAP. Additionally, where applicable, the policies conform to the accounting and reporting
guidelines prescribed by bank regulatory authorities. The following is a summary of the more significant accounting policies.
Nature of Operations
BB&T is a FHC organized under the laws of North Carolina. BB&T conducts operations through a bank subsidiary, Branch Bank, and nonbank subsidiaries.
Branch Bank’s offices are concentrated primarily in the southeastern and mid-Atlantic United States. BB&T provides a wide range of banking services to
individuals, businesses and municipalities. BB&T offers a variety of loans and lease financing to individuals and entities primarily within BB&T’s
geographic footprint, including insurance premium financing; permanent CRE financing arrangements; loan servicing for third-party investors; direct
consumer finance loans to individuals; credit card lending; automobile financing; factoring and equipment financing. BB&T also markets a wide range of
other services, including deposits; discount and full service brokerage, annuities and mutual funds; life insurance, property and casualty insurance, health
insurance and commercial general liability insurance on an agency basis and through a wholesale insurance brokerage operation; trust and retirement
services; comprehensive wealth advisory services; asset management and capital markets services.
Principles of Consolidation
The consolidated financial statements include the accounts of BB&T Corporation and those subsidiaries that are majority owned by BB&T or over which
BB&T exercises control. Intercompany accounts and transactions are eliminated in consolidation. The results of operations of companies or assets acquired
are included from the dates of acquisition. All material wholly-owned and majority-owned subsidiaries are consolidated unless GAAP requires otherwise.
BB&T holds investments in certain legal entities that are considered VIEs. VIEs are legal entities in which equity investors do not have sufficient equity at
risk for the entity to independently finance its activities, or as a group, the holders of the equity investment at risk lack the power through voting or similar
rights to direct the activities of the entity that most significantly impact its economic performance, or do not have the obligation to absorb the expected
losses of the entity or the right to receive expected residual returns of the entity. Consolidation of a VIE is required if a reporting entity is the primary
beneficiary of the VIE.
Investments in VIEs are evaluated to determine if BB&T is the primary beneficiary. This evaluation gives appropriate consideration to the design of the
entity and the variability that the entity was designed to pass along, the relative power of each party, and to BB&T’s relative obligation to absorb losses or
receive residual returns of the entity, in relation to such obligations and rights held by each party. During 2015, BB&T disposed of its variable interests in its
Tender Option Bond program trusts, which allowed for tax-advantaged financing of certain debt instruments issued by tax-exempt entities. BB&T was
considered the primary beneficiary of the Tender Option Bond program trusts, resulting in the consolidation of their assets and liabilities in prior years.
BB&T also has variable interests in certain entities that were not required to be consolidated, including affordable housing partnership interests, historic tax
credit partnerships and other partnership interests. Refer to Note 14 “Commitments and Contingencies” for additional disclosures regarding BB&T’s
significant VIEs.
BB&T accounts for unconsolidated partnerships and similar investments using the equity method of accounting. BB&T records its portion of income or loss
in other noninterest income in the Consolidated Statements of Income. These investments are periodically evaluated for impairment. BB&T also has
investments in, and future funding commitments to, private equity investments, which are accounted for based on BB&T’s ownership and control rights
specific to each investment.
Reclassifications
Certain amounts reported in prior periods’ consolidated financial statements have been reclassified to conform to the current presentation. Such
reclassifications had no effect on previously reported cash flows, shareholders’ equity or net income.
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Source: BB&T CORP, 10-K, February 25, 2016 Powered by Morningstar® Document Research℠
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