38

Depreciation and Amortization. Depreciation and amortization expense increased $20.5 million, or 67.0%, to $51.2 million in 2013 compared with 2012, primarily due to renovations at existing hotel properties and depreciation associated with the 2013/2012 Acquired Hotels. The 2013 depreciation and amortization expense includes $48.9 million of fixed asset depreciation, $1.9 million of financing costs amortization, and $0.4 million of franchise fees amortization. The 2012 depreciation and amortization expense includes $28.0 million of fixed asset depreciation, $2.3 million of financing costs amortization, and $0.4 million of franchise fees amortization.Corporate General and Administrative. Corporate general and administrative expenses increased by $3.4 million, or 35.1%, to $12.9 million in 2013 compared with 2012. The increase is primarily due to an increase in equity-based compensation of $0.9 million, costs related to the development of corporate functions that did not exist prior to our IPO of $0.9 million, and costs related to the move of our corporate headquarters from Sioux Falls, SD, to Austin, TX of $0.6 million.Other Income/Expense. Our other income/expense increased $6.7 million, or 44.8%, in 2013 compared with 2012.  The major component of other income/expense is interest expense, and the increase is primarily due to interest expense on new debt related to our 2013/2012 Acquisition Hotels.Income Tax Expense/Benefit. Our total income tax expense (in continuing operations and discontinued operations) in 2013 of $4.4 million is primarily due to our establishment of a valuation allowance related to net operating losses (NOLs) incurred at our TRS in 2011, 2012 and 2013. As a result of consecutive loss years we determined that it is more likely than not that we will not be able to recognize our NOLs before they expire. Our total income tax benefit (in continuing operations and discontinued operations) in 2012 of $1.3 million was the result of NOLs at our TRS.  The net operating losses were primarily the result of the disruption at the several hotel properties rebranded in 2011.


40

(1)    The interest rates at December 31, 2014 above give effect to our use of interest rate derivatives, where applicable.(2)    We entered into an interest rate derivative to effectively produce a fixed interest rate, however, the interest rate spread  over LIBOR may change based upon our Leverage Ratio, as defined in the credit facility documents.(3)    An interest rate derivative instrument effectively converts 85% of this loan to a fixed rate.


Contractual Obligations

(1)         Amounts shown include amortization of principal, maturities, and estimated interest payments. Interest payments on our variable rate debt have been estimated using the interest rates in effect at December 31, 2014, after giving effect to our interest rate swaps.(2)         Primarily ground leases and corporate office leases.(3)         This amount represents purchase orders and executed contracts for renovation projects at our hotel properties.(4)         This represents the remaining amounts to be advanced under a note funding obligation carrying an interest rate of 10.0% per annum paid monthly, an initial maturity date of May 13, 2017 with an option to extend the maturity date until May 13, 2018.We have entered into a purchase agreement with a hotel property developer to acquire a Hampton Inn & Suites in downtown Minneapolis, MN for $38.7 million, which price includes change orders to date. The purchase is subject to certain conditions, including the completion of construction of the hotel in accordance with agreed upon architectural and engineering designs, receipt of a Hampton Inn & Suites franchise, and receipt of a certificate of occupancy. Therefore, there is no assurance that the acquisition will be completed. In January 2014, we issued a standby letter of credit for $13.1 million in support of this purchase agreement. This letter of credit was issued under our senior unsecured credit facility.  We anticipate acquiring this hotel property in the first half of 2015.


LHFS

The decrease in the carrying amount attributable to covered
loans was due to the receipt of cash from the FDIC and the negative accretion due to the credit loss improvement partially reduced
by the offset to the provision for covered loans. The change in the carrying amount attributable to covered securities was due
to the offsets to the accretion of the discount and the amount of the increase in fair value of covered securities. The change
in the carrying amount attributable to the aggregate loss calculation is primarily due to accretion of the expected payment, which
is included in the “Accretion due to credit loss improvement” below. The fair values were based upon a discounted cash
flow methodology that was consistent with the acquisition date methodology. The fair value attributable to covered loans and the
aggregate loss calculation changes over time due to the receipt of cash from the FDIC, updated credit loss assumptions and the
passage of time. The fair value attributable to covered securities was based upon the timing and amount that would be payable to
the FDIC should they settle at the current fair value at the conclusion of the loss share agreement.The following table provides information related to the income
statement impact of covered loans and securities and the FDIC loss sharing asset recognized in the Colonial acquisition. The table
excludes all amounts related to other assets acquired and liabilities assumed in the acquisition.


LHFS

Interest income for 2012 on covered loans and securities
acquired in the Colonial acquisition decreased $284 million compared to 2011, primarily due to lower average covered loan balances.
The yield on covered loans for 2012 was 18.91% compared to 19.15% in 2011. At December 31, 2012, the accretable yield balance on
covered loans was $881 million. Accretable yield represents the excess of expected future cash flows above the current net carrying
amount of loans and will be recognized in income over the remaining life of the covered loans. Field: Page; Sequence: 37; Value: 2 During 2012, BB&T reduced the accretable yield balance
on covered loans by $72 million primarily due to changes in the expected lives of the underlying loans. During 2011, BB&T reclassified
$379 million from the nonaccretable balance to accretable yield on covered loans. This reclassification was primarily the result
of increased cash flow estimates resulting from improved loss expectations. These adjustments are recognized on a prospective basis
over the remaining lives of the loan pools.The provision for covered loans was $13 million in 2012,
a decrease of $58 million compared to 2011. This decrease resulted from the quarterly reassessment process.FDIC loss share income, net was $29 million worse than 2011
primarily due to a lower offset to the provision for covered loans.Interest income for 2011 on covered loans and securities
acquired in the Colonial acquisition increased $146 million compared to 2010, which was offset by a decrease in FDIC loss share
income. The majority of the increase is related to loans and reflects higher expected cash flows based on the quarterly cash flow
reassessment process. The yield on covered loans for 2011 was 19.15% compared to 13.22% in 2010. At December 31, 2011, the accretable
yield balance on these loans was $1.7 billion. Accretable yield represents the excess of future cash flows above the current net
carrying amount of loans and will be recognized into income over the remaining life of the covered and acquired loans. The increase
in interest income on securities compared to the prior year was primarily a result of security duration adjustments in the prior
year, which is offset in FDIC loss share income.During 2011 and 2010, BB&T reclassified $379 million
and $1.2 billion, respectively, from the nonaccretable balance to accretable yield on covered loans. These reclassifications were
primarily the result of increased cash flow estimates resulting from improved loss expectations. These amounts are recognized as
prospective yield adjustments and result in increased interest income over the remaining lives of the loan pools.The provision for covered loans was $71 million in 2011,
a decrease of $73 million compared to 2010. The provision expenses recorded during 2011 and 2010 resulted from the quarterly reassessment
process, which showed decreases in expected cash flows in certain loan pools that were partially offset by recoveries in other
previously impaired loan pools.FDIC loss share income, net decreased $173 million compared
to 2010 primarily due to the impact of cash flow reassessments that generated additional interest income and a reduction of amounts
due from the FDIC as a result of decreased loss projections on covered loans.FTE Net Interest Income and Rate / Volume AnalysisThe following table sets forth the major components of net
interest income and the related yields and rates for 2012, 2011 and 2010, as well as the variances between the periods caused by
changes in interest rates versus changes in volumes. Changes attributable to the mix of assets and liabilities have been allocated
proportionally between the changes due to rate and the changes due to volume. Field: Page; Sequence: 38; Value: 2


LHFS

Field: Page; Sequence: 39; Value: 2 Provision for Credit LossesThe provision for credit losses recorded by BB&T in 2012
was $1.1 billion, a decrease of $133 million, or 11.2%, compared to the prior year. Included in the provision for credit losses
during 2012 was $13 million related to covered loans. The decrease in the provision for credit losses during 2012 compared to 2011
was primarily due to improving credit trends and outlook, as net charge-offs in 2012 decreased 22.0% compared to the prior year.
Improving credit conditions also resulted in an increase in the ratio of the ALLL to net charge-offs, which increased to 1.56 for
2012, compared to 1.36 for 2011.Net charge-offs were 1.14% of average loans and leases (or
1.15% excluding covered loans) for 2012 compared to 1.57% of average loans and leases (or 1.59% excluding covered loans) during
2011. Net charge-offs for 2011 included $87 million related to the transfer and sale of residential mortgage loans in the second
quarter. Excluding the charge-off related to this transfer, net charge-offs were 1.50% of average loans and leases for 2011. The
largest decreases in the provision for credit losses for 2012 were in the residential mortgage and CRE - ADC portfolios.The provision for credit losses recorded by BB&T in 2011
was $1.2 billion compared with $2.6 billion in 2010, which represents a decrease of 54.9% during 2011. Included in the provision
for credit losses during 2011 was $71 million related to covered loans. The provision for credit losses recorded for covered loans
reflects lower expected cash flows on certain loan pools compared to the original estimates. Approximately 80% of this provision
for credit losses is offset through a credit to noninterest income based on the provisions of the FDIC loss sharing agreements.
The decrease in the provision for credit losses during 2011 compared to 2010 was primarily due to improving credit trends and outlook,
as net charge-offs in 2011 decreased 34.3% compared to 2010.Net charge-offs were 1.57% of average loans and leases (or
1.59% excluding covered loans) for 2011 compared to 2.41% of average loans and leases (or 2.59% excluding covered loans) during
2010. Net charge-offs for 2011 included $87 million related to the transfer and sale of residential mortgage loans in the second
quarter. This compares to $605 million of net charge-offs recorded in 2010 related to commercial and residential mortgage loans
that were transferred to the held for sale portfolio. Excluding these items, net charge-offs were 1.50% and 1.97% of average loans
and leases for 2011 and 2010, respectively. The largest decreases in the provision for credit losses for 2011 were in the commercial
and residential mortgage portfolios.Noninterest Income Noninterest income is a significant contributor to BB&T’s
financial results. Noninterest income includes insurance income, service charges on deposit accounts, mortgage banking income,
investment banking and brokerage fees and commissions, trust and investment advisory revenues, gains and losses on securities transactions,
and commissions and fees derived from other activities. Management continues to focus on diversifying its sources of revenue to
further reduce BB&T’s reliance on traditional spread-based interest income, as fee-based activities are a relatively
stable revenue source during periods of changing interest rates. Field: Page; Sequence: 40; Value: 2


LHFS

Noninterest income was $3.8 billion for 2012, up 22.7% compared
to 2011. This increase was driven by record income generated by BB&T’s insurance, mortgage banking and investment banking
and brokerage lines of business. In addition, bankcard fees and merchant discounts and other income increased compared to the prior
year. These increases were partially offset by lower checkcard fees, a decrease in income related to the FDIC loss share receivable
and a reduction in net securities income. The major categories of noninterest income and fluctuations in these amounts are discussed
in the following paragraphs. These fluctuations include the impact of acquisitions.Income from BB&T’s insurance agency/brokerage operations
was the largest source of noninterest income in 2012. Insurance income was up 30.2% compared to 2011, primarily due to the acquisition
of Crump Insurance on April 2, 2012, which added approximately $234 million in revenues during 2012. The remainder of the increase
in insurance income is attributable to the impact of other acquisitions that closed during the fourth quarter of 2011 and firming
market conditions.Mortgage banking income
totaled $840 million in 2012 compared to $436 million in 2011. The increase in mortgage banking income was primarily due to an
increase in residential mortgage production revenues totaling $378 million, which was driven by higher gains on residential mortgage
production and sales. Included in mortgage banking income for 2012 is a negative valuation adjustment of $32 million related to
changes in assumptions for residential MSRs that are carried at fair value. Approximately $22 million of the decline in the valuation
of the residential MSRs was due to a revision in the servicing cost assumption based on an expectation of higher costs that continue
to impact the industry. The remainder of the net decrease is primarily due to the impact of an increase in OAS assumption changes
partially offset by prepayment speed changes, which are reflective of the current MSR market. This decrease was more than offset
by gains of $128 million from derivative financial instruments used to manage the economic risk. Service charges on deposit accounts, which totaled $566 million
in 2012, represent BB&T’s third largest category of noninterest revenue. Service charge revenues were essentially flat
compared to the prior year, reflecting the impact of pricing changes for routine services related to retail and commercial transaction
deposit products, such as monthly maintenance fees and commercial transaction deposit products, implemented in 2011 that were designed
to offset a reduction in service charges that occurred in 2010 as a result of a change in overdraft policies.Investment banking and brokerage fees and commissions increased
$32 million, or 9.6%, compared to 2011. This increase was largely driven by a higher level of investment banking activities and
higher brokerage fees and commissions. Checkcard fees decreased $86 million, or 31.7%, due to the Durbin Amendment to the Dodd-Frank
Act, which was implemented on October 1, 2011 and limited the rate banks could assess for debit card transactions. Bankcard fees
and merchant discounts increased $32 million in 2012, primarily the result of higher volumes for both retail and commercial bankcard
activities.FDIC loss share income reflects accretion of the FDIC receivable
due to credit loss improvement (including expense associated with the aggregate loss calculation) and accretion related to covered
securities, partially reduced by the offset to Field: Page; Sequence: 41; Value: 2 the provision for covered loans. Covered loans have experienced better performance
than originally anticipated, which has resulted in the recognition of additional interest income on a level yield basis over the
expected life of the corresponding loans. A significant portion of this increase in interest income is offset by a reduction in
noninterest income recorded in FDIC loss share income. For 2012, noninterest income was reduced by $271 million related to improvement
in loan performance, compared to a reduction of $297 million in 2011. These decreases in income were partially offset by increases
of $11 million and $57 million, respectively, which reflected 80% of the provision for credit losses recorded on covered loans
for 2012 and 2011.BB&T recognized $12 million in net securities losses
during 2012, compared to $62 million of net securities gains in 2011. The net securities losses during 2012 included $9 million
of OTTI charges and $3 million of net losses realized from securities sales. The net securities gains during 2011 included $174
million of net gains realized from securities sales and $112 million of OTTI charges. The OTTI charges recognized during 2011 were
due to weaker actual and forecasted collateral performance for non-agency RMBS. Refer to the “Analysis of Financial Condition
– Investment Activities” section for a detailed discussion of strategies executed during the years presented.Other income increased $105 million in 2012 compared to 2011,
primarily due to $149 million of losses and write-downs recorded in 2011 related to the sale of commercial NPLs. This increase
was partially offset by $42 million of increased write-downs on affordable housing investments in 2012 due to revised estimates
and processes used to value these investments.Noninterest income was $3.1 billion for 2011, down 21.3%
compared to 2010. The decline in noninterest revenue was due to fewer securities gains, lower income related to the FDIC loss share
receivable, lower service charges on deposit accounts and lower mortgage banking revenues, while bankcard fees and merchant discounts
and trust and investment advisory revenues grew compared to the prior year. The major categories of noninterest income and fluctuations
in these amounts are discussed in the following paragraphs. These fluctuations include the impact of acquisitions.Insurance income was up slightly in 2011 compared to 2010,
as pricing for premiums remained soft throughout the year.Service charges on deposit accounts totaled $563 million
in 2011, a decline of $55 million, or 8.9%, compared to 2010. The decrease in 2011 was largely a result of a decline in overdraft
fees as a result of mid-2010 changes to BB&T’s overdraft policies that were partially in response to new regulation.
In 2011, management implemented pricing changes for routine services related to retail and commercial transaction deposit products,
such as monthly maintenance fees and check enclosure fees, which partially offset the reduction in overdraft fees.Mortgage banking income
totaled $436 million in 2011 compared to $521 million in 2010, a decrease of $85 million. This decrease was primarily due to a
decline of $97 million in residential mortgage production revenues due to lower volumes and pricing in 2011 and the decision in
the third quarter of 2010 to retain a portion of 10 to 15 year mortgage production. This decline was partially offset by higher
servicing revenues as a result of growth in the servicing portfolio and higher revenues from commercial mortgage banking revenues.
Included in mortgage banking income for 2011 is a negative valuation adjustment of $341 million related to changes in assumptions
for residential MSRs that are carried at fair value. This was more than offset by gains of $394 million from derivative financial
instruments used to manage the economic risk. Approximately $284 million of the decline in the valuation of the residential MSRs
was due to increases in the prepayment speed assumption as a result of a decrease in interest rates. During 2011, management also
revised its servicing cost assumption based on changes to regulations and industry standards that impact the mortgage servicing
industry. The change in the servicing cost assumption resulted in a decline of approximately $30 million in the valuation of the
mortgage servicing asset.Investment banking and brokerage fees and commissions decreased
$19 million, or 5.4%, compared to 2010. This decrease was largely due to weaker market conditions during the year and a record
fourth quarter in 2010.Checkcard fees decreased slightly in 2011 compared to 2010,
due to the Durbin Amendment to the Dodd-Frank Act. The decrease resulting from the implementation was more than offset by higher
volumes during the year.Bankcard fees and merchant discounts increased $27 million
in 2011. The increased bankcard fees were the result of higher volumes for both retail and commercial bankcard activities.Trust and investment advisory revenues are based on the types
of services provided as well as the overall value of the assets managed, which is affected by stock market conditions. In 2011,
trust and investment advisory revenues increased $14 million, or 8.8%, due to improved market conditions. Field: Page; Sequence: 42; Value: 2 FDIC loss share income reflects the offset to the provision
for covered loans, accretion of the FDIC receivable due to credit loss improvement and accretion related to covered securities.
During 2011 and 2010, covered loans experienced better performance than originally anticipated resulting in additional interest
income. A significant portion of the increases in interest income for 2011 and 2010 was offset by reductions in noninterest income.
For 2011 and 2010, noninterest income was reduced by $297 million and $203 million, respectively, related to improvement in loan
performance. These decreases in income were partially offset by increases of $57 million and $115 million, respectively, which
reflected 80% of the provision for credit losses recorded on covered loans for 2011 and 2010.BB&T recognized $62 million in net securities gains during
2011. The net securities gains during 2011 included $174 million of net gains realized from securities sales and $112 million of
OTTI charges. The OTTI charges recognized during 2011 are due to weaker actual and forecasted collateral performance for non-agency
RMBS. BB&T recognized $554 million in net securities gains during 2010. The net securities gains recognized in 2010 included
$585 million of net gains realized from securities sales and $31 million of losses as a result of OTTI charges. The large decrease
in securities gains during 2011 compared to 2010 reflects the results of the balance sheet deleveraging strategy that was executed
during the second quarter of 2010 and the de-risking of the investment portfolio that began during the third quarter of 2010 and
was completed in the fourth quarter. Refer to the “Analysis of Financial Condition – Investment Activities” section
for a detailed discussion of strategies executed during the years presented.Other income decreased $60 million in 2011 compared to 2010,
primarily due to losses and write-downs on commercial loans that were transferred to the LHFS portfolio in 2010 in connection with
management’s NPL disposition strategy. There was a total of $149 million of losses and write-downs recorded in 2011 compared
to $90 million in 2010.Noninterest Expense The following table provides a breakdown of BB&T’s
noninterest expense:


LHFS

Personnel expense is the largest component of noninterest
expense and includes salaries, wages and incentives, as well as pension and other employee benefit costs. Total personnel expense
increased 14.6% during 2012, primarily the result of the Crump Insurance and BankAtlantic acquisitions during 2012. Other factors
contributing to this increase include normal salary increases, higher production-related incentives and commissions and other performance
incentives, and higher pension expense related to certain changes in actuarial assumptions. Additional disclosures relating to
BB&T’s benefit plans can be found in Note 14 “Benefit Plans” in the “Notes to Consolidated Financial
Statements.”Occupancy and equipment expense increased $34 million, or
5.5%, compared to 2011 primarily due to the acquisitions of Crump Insurance and BankAtlantic.Loan-related expense totaled $283 million, an increase of
$56 million compared to the prior year. This increase was primarily the result of higher investor-owned loan expense and provisions
for higher mortgage repurchase reserves. Field: Page; Sequence: 43; Value: 2 Foreclosed property expenses include the gain or loss on
sale of foreclosed property, valuation adjustments resulting from updated appraisals, and the ongoing expense of maintaining foreclosed
properties. Foreclosed property expense decreased $536 million, or 66.8% in 2012, primarily reflecting the impact of a more aggressive
approach to reducing the inventory of foreclosed property that was undertaken in the fourth quarter of 2011.Regulatory charges decreased $53 million in 2012 due to improved
credit quality, which led to lower deposit insurance premiums.Merger-related and restructuring charges increased $52 million
compared to the prior year as a result of the Crump Insurance and BankAtlantic acquisitions.Other expense increased $62 million compared to 2011, primarily
the result of higher advertising expenses, an increase in depreciation expense related to assets under operating leases to customers
driven by growth in BB&T’s equipment financing business, higher operating charge-offs in 2012 and increased referral
fee expense. The remaining noninterest expenses increased a net $13 million, or 3.3%, compared to 2011. Refer to Table 10 for additional
detail on fluctuations in other categories of noninterest expense.Management currently expects that total noninterest expense
should decline in the range of 1% to 2% in 2013 compared with 2012, largely driven by lower credit-related expenses.Personnel expense increased $111 million, or 4.2%, during
2011 compared to 2010. This increase included an additional $90 million for salaries and wages due to customary salary increases
and higher incentive expense resulting from improved performance and production-related businesses. The increase also included
higher pension and employee benefits expense of $21 million.Foreclosed property expense totaled $802 million in 2011,
an increase of $55 million compared to 2010. This increase was largely due to an increase of $78 million for losses and write-downs,
partially offset by a decrease of $23 million for maintenance and repair costs. Included in the losses and write-downs for 2011
was a $220 million liquidity valuation adjustment in the fourth quarter related to management’s decision to implement a more
aggressive shorter period disposition strategy for foreclosed properties. The carrying value of BB&T’s inventory of foreclosed
property decreased $723 million, or 57.4%, during 2011. This decline reflects management’s more aggressive efforts to liquidate
properties and fewer inflows.Loan-related expense totaled $227 million, an increase of
$26 million compared to 2010. This increase includes a $12 million increase for losses related to repurchase reserves on BB&T’s
investor owned servicing portfolio.The remaining noninterest expenses decreased a net $60 million,
or 2.8%, compared to 2010. This decrease includes lower merger-related and restructuring charges, as 2010 included charges related
to the Colonial acquisition and systems conversion. In addition, amortization of intangibles declined by $23 million, as intangibles
are amortized on an accelerated basis. Noninterest expense for 2011 also includes a $16 million loss from the sale of leveraged
leases and an $11 million charge for an increase to the indemnification reserve related to the 2008 sale of Visa stock. These increases
were partially offset by $19 million in lower advertising and other marketing expenses.Merger-Related and Restructuring Charges BB&T recorded certain merger-related and restructuring
charges during the years 2012, 2011 and 2010. These charges are reflected in BB&T’s Consolidated Statements of Income
as a category of noninterest expense.Merger-related and restructuring expenses or credits include:
severance and personnel-related costs or credits, which typically occur in corporate support and data processing functions; occupancy
and equipment charges or credits, which relate to costs or gains associated with lease terminations, obsolete equipment write-offs,
and the sale of duplicate facilities and equipment; and other merger-related and restructuring charges or credits, which include
expenses necessary to convert and combine the acquired branches and operations of merged companies, direct media advertising related
to the acquisitions, asset and supply inventory write-offs, investment banking advisory fees and other similar charges.At December 31, 2012 and 2011, there were $11 million and
$20 million, respectively, of merger-related and restructuring accruals. Merger-related and restructuring accruals are established
when the costs are incurred or once all requirements for a plan to dispose of certain business functions have been approved by
management. In general, a major portion of accrued costs are utilized in conjunction with or immediately following the systems
conversion, when most of the duplicate positions are eliminated and the terminated employees begin to receive severance. Other
accruals are utilized over time based on the sale, closing or disposal of duplicate facilities or equipment or the expiration of
lease contracts. Merger and restructuring Field: Page; Sequence: 44; Value: 2 accruals are re-evaluated periodically and adjusted
as necessary. The remaining accruals at December 31, 2012 are generally expected to be utilized during 2013, unless they relate
to specific contracts that expire in later years.Provision for Income Taxes BB&T’s provision for income taxes totaled $764
million, $296 million and $115 million for 2012, 2011 and 2010, respectively. BB&T’s effective tax rates for the years
ended 2012, 2011 and 2010 were 27.4%, 18.2% and 11.9%, respectively. The increases in the effective tax rate for 2012 compared
to 2011, and 2011 compared to 2010, reflect higher levels of pre-tax earnings relative to permanent income tax differences.BB&T has extended credit to and invested in the obligations
of states and municipalities and their agencies, and has made other investments and loans that produce tax-exempt income. The income
generated from these investments, together with certain other transactions that have favorable tax treatment, have reduced BB&T’s
overall effective tax rate from the statutory rate in all periods presented.Management currently expects the effective tax rate in the
first quarter of 2013 to be similar to the effective tax rate in the fourth quarter of 2012.


LHFS

The total securities portfolio increased $2.3 billion, or
6.4%, in 2012. This growth was primarily driven by purchases of investment securities in the fourth quarter of 2012 that were made
in response to slowing loan growth forecasts.As of December 31, 2012, approximately 18.3% of the securities
portfolio was variable rate. The effective duration of the securities portfolio was 2.8 years at December 31, 2012 compared to
3.3 years at the end of 2011. The duration of the securities portfolio excludes equity securities, auction rate securities, and
certain covered non-agency RMBS. During the first quarter of 2011, BB&T reclassified approximately $8.3 billion from securities
available for sale to securities held to maturity. Management determined that it has both the positive intent and ability to hold
these securities to maturity. The reclassification of these securities was accounted for at fair value. Management transferred
these securities to mitigate  Field: Page; Sequence: 50; Value: 2 possible negative impacts on its regulatory capital under the proposed Basel III capital guidelines.
In addition, management purchased additional securities into the held-to-maturity portfolio based on its intent at the date of
purchase.RMBS issued by GSEs were 78.0% of the total securities portfolio
at year-end 2012. As of December 31, 2012, the available-for-sale securities portfolio also includes $1.6 billion of securities
that were acquired from the FDIC as part of the Colonial acquisition. These securities are covered by FDIC loss sharing agreements
and include $1.3 billion of non-agency RMBS and $326 million of municipal securities.During 2012, management sold $306 million of securities that
produced a realized loss of $3 million. In addition, BB&T recognized $9 million in charges for OTTI related to certain non-agency
RMBS and covered securities. In 2011, primarily in connection with strengthening its liquidity under the proposed Basel III liquidity
guidelines, management purchased a total of $13.4 billion of GNMA RMBS. Management also sold approximately $4.0 billion of securities
during 2011, which produced net securities gains of $174 million. In addition, BB&T recognized $112 million in charges for
OTTI during 2011 related to BB&T’s portfolio of non-agency RMBS. The OTTI charges were the result of weaker actual and
forecasted collateral performance for non-agency RMBS.In 2010, management executed two major strategies to strengthen
the balance sheet. In the second quarter of 2010, management executed a deleveraging strategy to better position BB&T’s
balance sheet for a rising rate environment and achieve a better mix of earning assets. In connection with this strategy, management
reduced the balance sheet by approximately $8 billion through the sale of securities. During the third and fourth quarters of 2010,
management executed a strategy to further de-risk the available-for-sale securities portfolio. The de-risking strategy was aimed
at further reducing the duration of the securities portfolio and reducing the risk of charges to OCI in a rising rate environment.
Also to further protect against the risk of a rising rate environment, management replaced a portion of the securities sold with
floating-rate securities. In addition, management sold approximately $400 million of non-agency RMBS to reduce the potential for
future credit losses. These strategies were the primary driver in generating net securities gains during 2010. Primarily in connection
with these strategies, BB&T sold a total of $31.3 billion in available-for-sale securities during 2010, which produced net
securities gains of $585 million. In addition, BB&T recognized $31 million in charges for OTTI related to BB&T’s
portfolio of non-agency RMBS.


LHFS

Lending Activities The primary goal of the BB&T lending function is to help
clients achieve their financial goals by providing quality loan products that are fair to the client and profitable to the Company.
Management believes that this purpose can best be accomplished by building strong, profitable client relationships over time, with
BB&T becoming an important contributor to the prosperity and well-being of its clients. In addition to the importance placed
on client knowledge and continuous involvement with clients, BB&T’s lending process incorporates the standards of a consistent
company-wide credit culture and an in-depth local market knowledge. Furthermore, the Company employs strict underwriting criteria
governing the degree of assumed risk and the diversity of the loan portfolio in terms of type, industry and geographical concentration.
In  Field: Page; Sequence: 52; Value: 2 this context, BB&T strives to meet the credit needs of businesses and consumers in its markets while pursuing a balanced
strategy of loan profitability, loan growth and loan quality.The following table summarizes BB&T’s loan portfolio
based on the regulatory classification of the portfolio, which focuses on the underlying loan collateral, and differs from internal
classifications presented herein that focus on the primary purpose of the loan. Covered loans are included in their respective
categories.


LHFS

The following table is based upon the regulatory classification
of loans and reflects the scheduled maturities of commercial, financial and agricultural loans, as well as real estate construction
loans:


LHFS

Scheduled repayments are reported in the maturity category
in which the payment is due. Determinations of maturities are based upon contract terms. BB&T’s credit policy typically
does not permit automatic renewal of loans. At the scheduled maturity date (including balloon payment date), the customer generally
must request a new loan to replace the matured loan and execute either a new note or note modification with rate, terms and conditions
negotiated at that time. Field: Page; Sequence: 53; Value: 2 BB&T’s loan portfolio is approximately 50% commercial
and 50% retail by design, and is divided into six major categories—commercial, direct retail, sales finance, revolving credit,
residential mortgage and other lending subsidiaries. In addition, BB&T has a portfolio of loans that were acquired in the
Colonial acquisition that are covered by FDIC loss sharing agreements. BB&T lends to a diverse customer base that is substantially
located within the Company’s primary market area. At the same time, the loan portfolio is geographically dispersed throughout
BB&T’s branch network to mitigate concentration risk arising from local and regional economic downturns. Refer to the
“Risk Management” section herein for a discussion of each of the loan portfolios and the credit risk management policies
used to manage the portfolios.The following table presents BB&T’s total loan
portfolio based upon BB&T’s lines of business, as discussed herein, rather than upon regulatory reporting classifications:


LHFS

BB&T’s lending portfolio reflected broad-based
growth throughout 2012 with notable increases in the commercial and industrial, direct retail and residential mortgage lending
portfolios. Total loans were $118.4 billion at year-end 2012, up $7.2 billion, or 6.4%, compared to the balance at year-end 2011.
Covered loans decreased $1.6 billion, or 32.3%, during 2012.The following table presents BB&T’s average loans
for the years ended December 31, 2012 and 2011, segregated by major category: Field: Page; Sequence: 54; Value: 2


LHFS

Average total loans were $113.7 billion for 2012, up $7.8
billion compared to the prior year. Average commercial and industrial loans increased $2.8 billion, or 8.2%, in 2012 as compared
to 2011. The increase in the commercial and industrial portfolio was driven by investments in corporate banking in key national
markets and the expansion of vertical lending teams focused on targeted industries. Average CRE – other loans for 2012 decreased
$360 million, or 3.2%, compared to 2011. The average CRE – residential ADC portfolio declined $1.1 billion, or 39.9%, compared
to the average balance for 2011, as management continued to reduce exposure to higher risk real estate lending.Average direct retail loans increased 10.3% during 2012,
primarily due to increased demand for home equity loans and an increase in non-real estate loans generated through the wealth and
small business lending channels. This growth was partially offset by continued runoff of the residential lot/land component of
this portfolio as management has continued to reduce exposures to these types of loans. Average sales finance loans and average
revolving credit reflected 2012 growth rates of 6.6% and 5.3%, respectively. BB&T concentrates its efforts on the highest quality
borrowers in both of these product markets. The growth in average sales finance loans was primarily driven by an increase in prime
automobile lending, which reflects increased momentum in the new and used automobile markets during 2012.Average residential mortgage loans increased $3.8 billion,
or 20.5%, compared to 2011. The increase in residential mortgage loans was driven by a previous strategy that resulted in a higher
portion of 10 to 15 year mortgage production being retained in the held for investment loan portfolio. During the second quarter
of 2012, this strategy was modified such that the majority of future loan production is directed to the held for sale portfolio.
As a result, management expects slower growth in the residential mortgage loan portfolio during 2013.Average loans held by BB&T’s other lending subsidiaries
increased $1.2 billion, or 15.0%, compared to 2011. The growth in this portfolio was primarily in small ticket finance, equipment
leasing and nonprime automobile financing.Asset QualityThe following discussion excludes assets covered by FDIC
loss sharing agreements that provide for reimbursement to BB&T for the majority of losses incurred on those assets. Covered
loans, which are considered performing due to the application of the accretion method of accounting, were $3.3 billion at December
31, 2012 and $4.9 billion in the prior year. Covered foreclosed property totaled $254 million and $378 million at December 31,
2012 and 2011, respectively.NPAs, which include foreclosed real estate, repossessions
and nonaccrual loans, totaled $1.5 billion at December 31, 2012, compared to $2.5 billion at December 31, 2011. The decline in
NPAs of $914 million was driven by a decrease of $492 million in NPLs and $422 million in foreclosed property. The decline in NPLs
was broad-based, reflecting decreases in most loan portfolios, including a 34.5% decrease in commercial NPLs. The decline in foreclosed
property reflects a more  Field: Page; Sequence: 55; Value: 2 aggressive approach to reducing the inventory of foreclosed property that was implemented during the fourth
quarter of 2011. The current inventory of foreclosed real estate as of December 31, 2012 includes land and lots, totaling $35 million
that have been held for approximately 15 months on average. The remaining foreclosed real estate of $72 million, which is primarily
single family residential and commercial real estate, had an average holding period of seven months. NPAs as a percentage of loans
and leases plus foreclosed property were 1.33% at December 31, 2012 compared with 2.29% at December 31, 2011.Management expects NPAs to improve at a modest pace during
the first quarter of 2013, assuming no significant economic deterioration during the quarter.The following table presents the changes in NPAs during 2012
and 2011.


LHFS

Tables 18 and 19 summarize asset quality information for
the past five years. As more fully described below, this information has been adjusted to exclude past due loans that are subject
to FDIC loss sharing agreements and certain mortgage loans guaranteed by the government:
·In accordance with regulatory reporting standards, covered loans that are contractually past due
are reported as past due and still accruing based on the number of days past due. However, given the significant amount of acquired
loans that are past due but still accruing due to the application of the accretion method, BB&T has concluded that it is appropriate
to adjust Table 18 to exclude covered loans in summarizing total loans 90 days or more past due and still accruing and total loans
30-89 days past due and still accruing.
·BB&T has also concluded that the inclusion of covered loans in certain asset quality ratios
summarized in Table 19 including “Loans 30-89 days past due and still accruing as a percentage of total loans and leases,”
“Loans 90 days or more past due and still accruing as a percentage of total loans and leases,” “Nonperforming
loans and leases as a percentage of total loans and leases” and certain other asset quality ratios that reflect NPAs in the
numerator or denominator (or both) results in significant distortion to these ratios. In addition, because loan level charge-offs
related to the acquired loans are not recognized in the financial statements until the cumulative amounts exceed the original loss
projections on a pool basis, the net charge-off ratio for the acquired loans is not consistent with the net charge-off ratio for
other loan portfolios. The inclusion of these loans in the asset quality ratios described above could result in a lack of comparability
across quarters or years, and could negatively impact comparability with other portfolios that were not impacted by acquisition
accounting. BB&T believes that the presentation of asset quality measures excluding covered loans and related amounts from
both the numerator and denominator provides better perspective into underlying trends related to the quality of its loan portfolio.
Accordingly, the asset quality measures in Table 19 present asset quality information both on a consolidated basis as well as excluding
the covered assets and related amounts.
·In addition, BB&T has excluded mortgage loans that are guaranteed by the government, primarily
FHA/VA loans, from the asset quality metrics and ratios reflected on Tables 18 and 19, as these loans are recoverable through various
government guarantees. In addition, BB&T has recorded on the balance sheet  Field: Page; Sequence: 56; Value: 2

certain amounts related to delinquent GNMA loans
serviced for others that BB&T has the option, but not the obligation, to repurchase and has effectively regained control. These
amounts are also excluded from asset quality metrics as reimbursement of insured amounts is proceeding in accordance with investor
guidelines. The amount of government guaranteed mortgage loans and GNMA loans serviced for others that have been excluded are noted
in the footnotes to Table 18.

Table 18

Asset Quality

(Excluding Covered Assets)

December 31,

2012

2011

2010

2009

2008

(Dollars in millions)

Nonaccrual loans and leases:

Commercial
$
886

$
1,352

$
1,426

$
1,651

$
845

Direct retail lending

132

142

191

197

89

Sales finance loans

7

7

6

7

7

Residential mortgage loans (1)

269

308

466

707

358

Other lending subsidiaries

86

63

60

96

97

Total nonaccrual loans and leases held for investment

1,380

1,872

2,149

2,658

1,396

Nonaccrual LHFS

 ―

 ―

521

5

 ―

Total nonaccrual loans and leases

1,380

1,872

2,670

2,663

1,396

Foreclosed real estate (2)

107

536

1,259

1,451

538

Other foreclosed property

49

42

42

58

79

Total NPAs (1)(2)
$
1,536

$
2,450

$
3,971

$
4,172

$
2,013

Loans 90 days or more past due and still accruing:

Commercial
$
1

$
2

$
20

$
7

$
86

Direct retail lending

38

56

79

87

117

Sales finance loans

10

18

27

30

26

Revolving credit loans

16

17

20

25

23

Residential mortgage loans (3)(4)

92

104

143

150

158

Other lending subsidiaries

10

5

6

12

14

Total loans 90 days or more past due and still

accruing (3)(4)(5)
$
167

$
202

$
295

$
311

$
424

Loans 30-89 days past due:

Commercial
$
56

$
121

$
315

$
377

$
594

Direct retail lending

145

162

190

222

270

Sales finance loans

56

75

95

126

146

Revolving credit loans

23

22

28

32

34

Residential mortgage loans (6)(7)

498

479

532

600

665

Other lending subsidiaries

290

273

248

306

313

Total loans 30 - 89 days past due (6)(7)(8)
$
1,068

$
1,132

$
1,408

$
1,663

$
2,022

(1)Excludes nonaccrual mortgage loans that are government guaranteed totaling $55 million and $17 million as of 2009 and 2008,
respectively. BB&T revised its nonaccrual policy related to FHA/VA guaranteed loans during 2010. The change in policy resulted
in a decrease in nonaccrual mortgage loans and an increase in mortgage loans 90 days past due and still accruing of approximately
$79 million.
(2)Excludes covered foreclosed real estate totaling $254 million, $378 million, $313 million and $160 million at December 31,
2012, 2011, 2010 and 2009, respectively.
(3)Excludes mortgage loans guaranteed by GNMA that are 90 days or more past due totaling $517 million, $426 million, $425 million,
$337 million and $74 million at December 31, 2012, 2011, 2010, 2009 and 2008, respectively.
(4)Excludes mortgage loans past due 90 days or more that are government guaranteed totaling $254 million, $206 million, $153 million,
$8 million and $7 million at December 31, 2012, 2011, 2010, 2009 and 2008, respectively. Includes past due mortgage LHFS.
(5)Excludes covered loans past due 90 days or more totaling $442 million, $736 million, $1.1 billion and $1.4 billion at December
31, 2012, 2011, 2010 and 2009, respectively.
(6)Excludes mortgage loans guaranteed by GNMA that are past due 30-89 days totaling $5 million, $7 million, $7 million, $10 million
and $12 million at December 31, 2012, 2011, 2010, 2009 and 2008, respectively. Field: Page; Sequence: 57; Value: 2 (7)Excludes mortgage loans past due 30-89 days that are government guaranteed totaling $96 million, $91 million, $83 million,
$23 million and $25 million at December 31, 2012, 2011, 2010, 2009 and 2008, respectively. Includes past due mortgage LHFS.
(8)Excludes covered loans past due 30-89 days totaling $135 million, $222 million, $363 million and $391 million at December 31,
2012, 2011, 2010 and 2009, respectively.Loans 90 days or more past due and still accruing
interest, excluding government guaranteed loans and covered loans, totaled $167 million at December 31, 2012, compared with $202
million at year-end 2011, a decline of 17.3%. Loans 30-89 days past due, excluding government guaranteed loans and covered loans,
totaled $1.1 billion at December 31, 2012, which was a decline of $64 million, or 5.7% compared to year-end 2011. Excluding government
guaranteed loans and covered loans, BB&T’s past due asset quality metrics are essentially at normalized levels.


LHFS

(1)Excludes mortgage loans guaranteed by GNMA. Refer to the footnotes of preceding table for related amounts.
(2)Excludes mortgage loans guaranteed by the government. Refer to the footnotes of preceding table for related amounts.
(3)Net charge-offs for 2011 and 2010 include $695 million and $236 million, respectively, related to BB&T’s NPA disposition
strategy. In connection with this strategy, approximately $271 million and $1.9 billion of problem loans  Field: Page; Sequence: 58; Value: 2

 were transferred from
loans held for investment to LHFS in 2011 and 2010, respectively. The disposition of all such loans was complete as of December
31, 2011.
(4)These asset quality ratios have been adjusted to remove the impact of covered loans and covered foreclosed property. Appropriate
adjustments to the numerator and denominator have been reflected in the calculation of these ratios.BB&T’s potential problem loans include loans on nonaccrual
status or past due as disclosed in Table 18. In addition, for its commercial portfolio segment, loans that are rated special mention
or substandard performing are closely monitored by management as potential problem loans. Refer to Note 4 “Allowance for
Credit Losses” in the “Notes to Consolidated Financial Statements” herein for additional disclosures related
to these potential problem loans.TDRs generally occur when a borrower is experiencing, or
is expected to experience, financial difficulties in the near-term. As a result, BB&T will work with the borrower to prevent
further difficulties, and ultimately to improve the likelihood of recovery on the loan. To facilitate this process, a concessionary
modification that would not otherwise be considered may be granted resulting in classification of the loan as a TDR. Refer to Note
1 “Summary of Significant Accounting Policies” in the “Notes to Consolidated Financial Statements” for
additional policy information regarding TDRs.BB&T’s performing TDRs, excluding government guaranteed
mortgage loans, totaled $1.3 billion at December 31, 2012, an increase of $218 million, or 19.7%, compared with December 31, 2011.
This increase was attributable to guidance issued by a national bank regulatory agency during 2012 that requires certain loans,
which have been discharged in bankruptcy and not reaffirmed by the borrower, to be accounted for as a TDR and possibly as nonperforming,
regardless of their actual payment history and expected performance. BB&T’s primary regulators have not formalized how
this guidance will be applied to the entities that it regulates. However, based on a preliminary interpretation of this guidance,
BB&T classified $226 million of performing loans across all loan portfolios as TDRs during the fourth quarter of 2012. Approximately
77% of these loans have been current for two years or more and approximately 92% are less than 60 days past due. As a result, BB&T
concluded that it has a reasonable expectation of collection of principal and interest and therefore has classified these TDRs
as performing. BB&T’s exposure to the expected collateral shortfall has been considered in the ALLL recorded at December
31, 2012.In addition, BB&T classified approximately $44 million
of loans already on nonaccrual status as TDRs as a result of regulatory guidance described above. The classification of these loans
as TDRs had an insignificant impact on the allowance as these loans had been previously charged down to their estimated collateral
value less costs to sell.The following table provides a summary of performing TDR
activity during the years ended December 31, 2012 and 2011.


LHFS

Payments and payoffs represent cash received from borrowers
in connection with scheduled principal payments, prepayments and payoffs of amounts outstanding. Transfers to nonperforming TDRs
represent loans that no longer meet the requirements necessary to reflect the loan in accruing status and as a result are subsequently
classified as a nonperforming TDR.TDRs may be removed due to the passage of time if they: (1)
did not include a forgiveness of principal or interest, (2) have performed in accordance with the modified terms (generally a minimum
of six months), (3) were reported as a TDR over a year end reporting period, and (4) reflected an interest rate on the modified
loan that was no less than a market rate at the date of modification. These loans were previously considered TDRs as a result of
structural concessions such as extended interest-only terms or an amortization period that did not otherwise conform to normal
underwriting guidelines. Field: Page; Sequence: 59; Value: 2 In addition, certain transactions may be removed from classification
as a TDR as a result of a subsequent non-concessionary re-modification. Non-concessionary re-modifications represent TDRs that
did not contain concessionary terms at the date of a subsequent renewal/modification and there was a reasonable expectation that
the borrower would continue to comply with the terms of the loan subsequent to the date of the re-modification. A re-modification
may be considered for such a re-classification if the loan has not had a forgiveness of principal or interest and the modified
terms qualify as more than minor such that the re-modified loan is considered a new loan. Alternatively, such loans may be considered
for reclassification in years subsequent to the date of the re-modification based on the passage of time as described in the preceding
paragraph.In connection with consumer loan TDRs, a NPL will be returned
to accruing status when current as to principal and interest and upon a sustained historical repayment performance (generally a
minimum of six months).The following table provides further details regarding the
payment status of TDRs outstanding at December 31, 2012:

Table 21

Troubled Debt Restructurings

 December 31, 2012

Past Due

Past Due

Current Status

30-89 Days (1)

90 Days Or More (1)

Total

(Dollars in millions)

Performing TDRs:

Commercial loans:

Commercial and industrial
$
76

98.7
%

$
1

1.3
%

$
 ―

 ―
%

$
77

CRE - other

67

100.0

 ―

 ―

 ―

 ―

67

CRE - residential ADC

21

100.0

 ―

 ―

 ―

 ―

21

Direct retail lending

183

92.9

12

6.1

2

1.0

197

Sales finance

16

84.2

2

10.5

1

5.3

19

Revolving credit

45

80.4

5

8.9

6

10.7

56

Residential mortgage (2)

643

83.6

106

13.8

20

2.6

769

Other lending subsidiaries

104

86.0

17

14.0

 ―

 ―

121

Total performing TDRs (2)

1,155

87.0

143

10.8

29

2.2

1,327

Nonperforming TDRs (3)

60

25.0

24

10.0

156

65.0

240

Total TDRs (2)
$
1,215

77.5

$
167

10.7

$
185

11.8

$
1,567

(1)Past due performing TDRs are included in past due disclosures.
(2)Excludes mortgage TDRs that are government guaranteed totaling $315 million.
(3)Nonperforming TDRs are included in nonaccrual loan disclosures.


ACL

Information related to BB&T’s ALLL for the last
five years is presented in the following table. Field: Page; Sequence: 61; Value: 2


ACL

Funding Activities Deposits are the primary source of funds for lending and
investing activities. Scheduled payments, as well as prepayments, and maturities from portfolios of loans and investment securities
also provide a stable source of funds. FHLB advances, other secured borrowings, Federal funds purchased and other short-term borrowed
funds, as well as longer-term debt issued through the capital markets, all provide supplemental liquidity sources. BB&T’s
funding activities are monitored and governed through BB&T’s overall asset/liability management process, which is further
discussed in the “Market Risk Management” section in “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” herein. Following is a brief description of the various sources of funds used by BB&T.Deposits Deposits are attracted principally from clients within BB&T’s
branch network through the offering of a broad selection of deposit instruments to individuals and businesses, including noninterest-bearing
checking accounts, interest-bearing checking accounts, savings accounts, money market deposit accounts, CDs and individual retirement
accounts. Deposit account terms vary with respect to the minimum balance required, the time period the funds must remain on deposit
and service charge schedules. Interest rates paid on specific deposit types are determined based on (i) the interest rates
offered by competitors, (ii) the anticipated amount and timing of funding needs, (iii) the availability and cost of alternative
sources of funding, and (iv) anticipated future economic conditions and interest rates. Deposits are attractive sources of
funding because of their  Field: Page; Sequence: 62; Value: 2 stability and relative cost. Deposits are regarded as an important part of the overall client relationship
and provide opportunities to cross-sell other BB&T services.Total deposits at December 31, 2012, were $133.1 billion,
an increase of $8.1 billion, or 6.5%, compared to year-end 2011. Noninterest-bearing deposits totaled $32.5 billion at December
31, 2012, an increase of $6.8 billion, or 26.4%, from December 31, 2011. The increase in noninterest-bearing deposits was broad
based in nature, with increases in deposits from personal, business and public funds clients. Interest checking and money market
and savings accounts increased $3.7 billion, or 5.6% compared to the prior year, while certificates and other time deposits declined
$2.3 billion, or 6.7%, during that same time period. For the year ended December 31, 2012, total deposits averaged $127.6
billion, an increase of $15.3 billion, or 13.6%, compared to 2011. Management currently expects more modest deposit growth in the
first quarter of 2013.The following table presents BB&T’s average deposits
for the years ended December 31, 2012 and 2011, segregated by major category:


ACL

The overall mix of deposits improved during 2012, with average
noninterest-bearing deposits representing 22.7% of average total deposits during 2012, compared to 20.4% during 2011. Deposit mix
was also positively impacted by certificates and other time deposits, which represented 24.8% of average total deposits during
2012, down from 25.7% of average total deposits during 2011. The average cost of interest-bearing deposits was 0.43% for 2012,
compared to 0.68% in the prior year. Management expects that deposit costs will continue to trend downward in 2013.The following table provides information regarding the scheduled
maturities of time deposits that are $100,000 and greater at December 31, 2012:


ACL

Short-term Borrowings BB&T also uses
various types of short-term borrowings in meeting funding needs. While deposits remain the primary source for funding loan
originations, management uses short-term borrowings as a supplementary funding source for loan growth and other balance sheet
management purposes. Short-term borrowings were 1.9% of total funding on average in 2012 as compared to 3.2% in 2011. See
Note 8 “Federal Funds Purchased, Securities Sold Under Agreements to Repurchase and Short-Term Borrowed Funds” in
the “Notes to Consolidated Financial Statements” herein for further disclosure. The types of short-term
borrowings that have been, or may be, used by the Company include Federal funds purchased, securities sold under repurchase
agreements, master notes, commercial paper, U.S. Treasury tax and loan deposit notes and short-term bank notes. All of
BB&T’s securities sold under repurchase agreements are reflected as collateralized borrowings on the balance sheet.
Short-term borrowings at the end of 2012 were $2.9 billion, a decrease of $702 million, or 19.7%, compared to year-  Field: Page; Sequence: 63; Value: 2 end 2011.
Average short-term borrowings totaled $3.4 billion during 2012 compared to $5.2 billion last year, a decrease of 34.3%. The
decline in the balances during 2012 primarily reflects the strong deposit growth described previously.The following table summarizes certain pertinent information
for the past three years with respect to BB&T’s short-term borrowings:


ACL

Long-term Debt BB&T uses long-term debt to provide both funding and,
to a lesser extent, regulatory capital. During 2012, long-term debt represented 11.6% of average total funding, compared to 13.7%
during 2011. At December 31, 2012, long-term debt totaled $19.1 billion, a decrease of $2.7 billion compared to year-end 2011.
The average cost of long-term debt was 3.02% in 2012, compared to 3.40% in 2011. See Note 10 “Long-Term Debt” in the
“Notes to Consolidated Financial Statements” herein for further disclosure.BB&T’s long-term debt consists primarily of FHLB
advances, which represented 47.1% of total outstanding long-term debt at December 31, 2012; senior notes of BB&T, which
represented 31.6% of the year-end balance; subordinated notes of BB&T, which represented 11.3% of the year-end balance; and
subordinated notes of Branch Bank, which represented 6.4% of total outstanding long-term debt at December 31, 2012. FHLB advances
are cost-effective long-term funding sources that provide BB&T with the flexibility to structure the debt in a manner that
aids in the management of interest rate risk and liquidity.The decrease in long-term
debt reflects the redemption of $3.3 billion of junior subordinated debt and the maturity of $1.0 billion in senior debt. The redemption
of the junior subordinated debt was initiated based on the early redemption provisions of the related trust preferred securities
due to the fact that they will no longer qualify for Tier 1 capital treatment. These decreases in long-term
debt were partially offset by the issuance of $2.3 billion of senior and subordinated notes with interest rates ranging from 1.45%
to 3.95%. Shareholders’ Equity Shareholders’ equity totaled $21.2 billion at December 31,
2012, an increase of $3.7 billion, or 21.4%, from year-end 2011. BB&T’s book value per common share at December 31,
2012 was $27.21, compared to $24.98 at December 31, 2011.The increase in shareholders’ equity during 2012 includes
$2.1 billion in net proceeds from the issuance of Tier 1 qualifying non-cumulative perpetual preferred stock. See Note 11 “Shareholders’
Equity” in the “Notes to Consolidated Financial Statements” herein for further disclosure. In addition, shareholders’
equity increased $1.4 billion due to BB&T’s earnings available to common shareholders retained after dividends declared,
and $113 million as a result of the issuance of additional shares and other transactions in connection with BB&T’s equity-based
compensation plans, 401(k) plan and dividend reinvestment plan. Accumulated other comprehensive income increased $154 million.
The increase in accumulated other comprehensive income was primarily due to a $335 million after-tax increase in the value of the
available for sale securities Field: Page; Sequence: 64; Value: 2  portfolio, partially offset by declines of $111 million related to pensions and other post-retirement
benefit plans and $61 million related to an increase in amounts attributable to the FDIC under loss share agreements.BB&T’s tangible book value per common share at
December 31, 2012 was $17.52 compared to $16.73 at December 31, 2011. As of December 31, 2012, measures of tangible
capital were not required by the regulators and, therefore, were considered non-GAAP measures. Refer to the section titled “Capital”
herein for a discussion of how BB&T calculates and uses these measures in the evaluation of the Company.Risk Management In the normal course of business BB&T encounters inherent
risk in its business activities. Risk is managed on a decentralized basis with risk decisions made as closely as possible to where
the source of risk occurs. Centrally, risk oversight is managed at the corporate level through oversight, policies and reporting.
The principal types of inherent risk include regulatory, credit, liquidity, market, operational, reputation and strategic risks.Regulatory risk Regulatory risk is the risk to earnings, capital, or reputation
arising from violations of, or nonconformance with current and changing laws, regulations, supervisory guidance, regulatory expectations,
or the rules, standards, or codes of conduct of self regulatory organizations.Credit risk Credit risk is the risk to earnings or capital arising from
the default, inability or unwillingness of a borrower, obligor, or counterparty to meet the terms of any financial obligation with
BB&T or otherwise perform as agreed. Credit risk exists in all activities where success depends on the performance of a borrower,
obligor, or counterparty. Credit risk arises when BB&T funds are extended, committed, invested, or otherwise exposed through
actual or implied contractual agreements, whether on or off the balance sheet. Credit risk also occurs when the credit quality
of an issuer whose securities or other instruments the bank holds deteriorates.BB&T has established the following general practices
to manage credit risk:
·limiting the amount of credit that individual lenders may extend to a borrower;
·establishing a process for credit approval accountability;
·careful initial underwriting and analysis of borrower, transaction, market and collateral risks;
·ongoing servicing and monitoring of individual loans and lending relationships;
·continuous monitoring of the portfolio, market dynamics and the economy; and
·periodically reevaluating the bank’s strategy and overall exposure as economic, market and other relevant conditions
change.The following discussion presents the principal types of
lending conducted by BB&T and describes the underwriting procedures and overall risk management of BB&T’s lending
function.Underwriting Approach Recognizing that the loan portfolio is a primary source of
profitability and risk, proper loan underwriting is critical to BB&T’s long-term financial success. BB&T’s
underwriting approach is designed to define acceptable combinations of specific risk-mitigating features that ensure credit relationships
conform to BB&T’s risk philosophy. Provided below is a summary of the most significant underwriting criteria used to
evaluate new loans and loan renewals:
·Cash flow and debt service coverage—cash flow adequacy is a necessary condition of creditworthiness, meaning that
loans must either be clearly supported by a borrower’s cash flow or, if not, must be justified by secondary repayment sources.
·Secondary sources of repayment—alternative repayment funds are a significant risk-mitigating factor as long as
they are liquid, can be easily accessed and provide adequate resources to supplement the primary cash flow source. Field: Page; Sequence: 65; Value: 2 ·Value of any underlying collateral—loans are generally secured by the asset being financed. Because an analysis
of the primary and secondary sources of repayment is the most important factor, collateral, unless it is liquid, does not justify
loans that cannot be serviced by the borrower’s normal cash flows.
·Overall creditworthiness of the customer, taking into account the customer’s relationships, both past and current,
with BB&T and other lenders—BB&T’s success depends on building lasting and mutually beneficial relationships
with clients, which involves assessing their financial position and background.
·Level of equity invested in the transaction—in general, borrowers are required to contribute or invest a portion
of their own funds prior to any loan advances.Commercial Loan and Lease Portfolio The commercial loan and lease portfolio represents the largest
category of the Company’s total loan portfolio. BB&T’s commercial lending program is generally targeted to serve
small-to-middle market businesses with sales of $250 million or less. In addition, BB&T’s Corporate Banking Group provides
lending solutions to large corporate clients. Traditionally, lending to small and mid-sized businesses has been among BB&T’s
strongest market segments.Commercial and small business loans are primarily originated
through BB&T’s Community Bank. In accordance with the Company’s lending policy, each loan undergoes a detailed
underwriting process, which incorporates BB&T’s underwriting approach, procedures and evaluations described above. Commercial
loans are typically priced with an interest rate tied to market indices, such as the prime rate or LIBOR. Commercial loans are
individually monitored and reviewed for any possible deterioration in the ability of the client to repay the loan. Approximately
90% of BB&T’s commercial loans are secured by real estate, business equipment, inventories and other types of collateral.Direct Retail Loan Portfolio The direct retail loan portfolio primarily consists of a
wide variety of loan products offered through BB&T’s branch network. Various types of secured and unsecured loans are
marketed to qualifying existing clients and to other creditworthy candidates in BB&T’s market area. The vast majority
of direct retail loans are secured by first or second liens on residential real estate and include both closed-end home equity
loans and revolving home equity lines of credit. Direct retail loans are subject to the same rigorous lending policies and procedures
as described above for commercial loans and are underwritten with note amounts and credit limits that ensure consistency with the
Company’s risk philosophy.Sales Finance Loan Portfolio The sales finance category primarily includes secured indirect
installment loans to consumers for the purchase of new and used automobiles, boats and recreational vehicles. Such loans are originated
through approved franchised and independent dealers throughout the BB&T market area. These loans are relatively homogenous
and no single loan is individually significant in terms of its size and potential risk of loss. Sales finance loans are subject
to the same rigorous lending policies and procedures as described above for commercial loans and are underwritten with note amounts
and credit limits that ensure consistency with the Company’s risk philosophy. In addition to its normal underwriting due
diligence, BB&T uses application systems and “scoring systems” to help underwrite and manage the credit risk in
its sales finance portfolio. Also included in the sales finance category are commercial lines, serviced by the Dealer Finance Department,
to finance dealer wholesale inventory (“Floor Plan Lines”) for resale to consumers. Floor Plan Lines are underwritten
by commercial loan officers in compliance with the same rigorous lending policies described above for commercial loans. In addition,
Floor Plan Lines are subject to intensive monitoring and oversight to ensure quality and to mitigate risk, including from fraud.Revolving Credit Loan Portfolio The revolving credit portfolio comprises the outstanding
balances on credit cards and BB&T’s checking account overdraft protection product, Constant Credit. BB&T markets
credit cards to its existing banking client base and does not solicit cardholders through nationwide programs or other forms of
mass marketing. Such balances are generally unsecured and actively managed.Residential Mortgage Loan Portfolio Branch Bank offers various types of fixed- and
adjustable-rate loans for the purpose of constructing, purchasing or refinancing residential properties. BB&T primarily
originates conforming mortgage loans and higher quality jumbo and construction-to-permanent loans for owner-occupied
properties. Conforming loans are loans that are underwritten in accordance with the underwriting standards set forth by FNMA
and FHLMC. They are generally collateralized by one-to-  Field: Page; Sequence: 66; Value: 2 four-family residential real estate, typically have
loan-to-collateral value ratios of 80% or less, and are made to borrowers in good credit standing. Additionally,
BB&T’s Direct Retail Lending group provides home equity loans that can increase the loan-to-collateral value to 90%
or less for certain borrowers.Risks associated with the mortgage lending function include
interest rate risk, which is mitigated through the sale of a substantial portion of conforming fixed-rate loans in the secondary
mortgage market and an effective MSR hedging process. Borrower risk is lessened through rigorous underwriting procedures and mortgage
insurance. The right to service the loans and receive servicing income is generally retained when conforming loans are sold. Management
believes that the retention of mortgage servicing is a primary relationship driver in retail banking and a vital part of management’s
strategy to establish profitable long-term customer relationships and offer high quality client service. BB&T also purchases
residential mortgage loans from correspondent originators. The loans purchased from third-party originators are subject to the
same underwriting and risk-management criteria as loans originated internally.Other Lending Subsidiaries Portfolio BB&T’s other lending subsidiaries portfolio consists
of loans originated through six LOBs that provide specialty finance alternatives to consumers and businesses including: dealer-based
financing of equipment for small businesses and consumers, commercial equipment leasing and finance, direct and indirect consumer
finance, insurance premium finance, indirect nonprime automobile finance, and full-service commercial mortgage banking. BB&T
offers these services to bank clients as well as nonbank clients within and outside BB&T’s primary geographic market
area.BB&T’s other lending subsidiaries adhere to the
same overall underwriting approach as the commercial and consumer lending portfolio and also utilize automated credit scoring to
assist with underwriting credit risk. The majority of these loans are relatively homogenous and no single loan is individually
significant in terms of its size and potential risk of loss. The majority of the loans are secured by real estate, automobiles,
equipment or unearned insurance premiums. As of December 31, 2012, included in the other lending subsidiaries portfolio are
loans to nonprime borrowers of approximately $3.6 billion, or 3.0% of the total BB&T loan and lease portfolio. Of these, approximately
$262 million are residential real estate loans.Covered Loan Portfolio BB&T has $3.3 billion of loans covered by loss sharing
agreements with the FDIC, which are primarily CRE and residential mortgage loans. Refer to Note 3 “Loans and Leases”
in the “Notes to Consolidated Financial Statements” in this report for additional disclosures related to BB&T’s
covered loans.Liquidity risk Liquidity risk is the risk to ongoing operations arising
from the inability to accommodate liability maturities, deposit withdrawals, fund asset growth, or meet contractual obligations
when they come due. For additional information concerning BB&T’s management of liquidity risk, see the “Liquidity”
section of “Management’s Discussion and Analysis” herein.Market risk Market risk is the risk to earnings or capital arising from
changes in the market value of portfolios, securities, or other financial instruments due to changes in the level, volatility,
or correlations among financial market rates or prices, including interest rates, foreign exchange rates, equity prices, or other
relevant rates or prices. For additional information concerning BB&T’s management of market risk, see the “Market
Risk Management” section of “Management’s Discussion and Analysis” herein.Operational risk Operational risk is the risk to earnings or capital arising
from inadequate or failed internal processes, people and systems or from external events. This definition includes legal risk,
which is the risk of loss arising from defective transactions, litigation or claims made, or the failure to adequately protect
company-owned assets.Reputation risk Reputation risk is the risk to earnings, capital, enterprise
value, the BB&T brand, and public confidence arising from negative publicity or public opinion, whether real or perceived,
regarding BB&T’s business practices, products and services, transactions, or other activities undertaken by BB&T,
its representatives, or its partners. Reputation risk may impact BB&T’s clients, employees, communities or shareholders,
and is often a residual risk that arises when other risks are not managed properly. Field: Page; Sequence: 67; Value: 2 Strategic risk Strategic risk is the risk to earnings, capital, enterprise
value, and to the achievement of BB&T’s Vision, Mission, Purpose, and business objectives that arises from BB&T’s
business strategy, adverse business decisions, improper or ineffective implementation of decisions, or lack of responsiveness
to changes in business environment. Strategic risk is a function of the compatibility of BB&T’s strategic goals, the
business strategies developed to achieve those goals, the resources deployed against these goals, and the quality of implementation.Risk Governance The management of risk has always been an enterprise-wide
initiative at BB&T. It is part of BB&T’s mission statement that risk is managed to optimize the long-term return
to shareholders, while providing a safe and sound investment.The Chief Risk Officer leads the RMO, which designs, organizes
and manages BB&T’s risk framework. The management of risk begins at the business level through risk identification and
management programs. The RMO is responsible for ensuring effective risk management oversight, measurement, monitoring, reporting
and consistency of controls.Market Risk ManagementThe effective management of market risk is essential to achieving
BB&T’s strategic financial objectives. As a financial institution, BB&T’s most significant market risk exposure
is interest rate risk in its balance sheet; however, market risk also includes product liquidity risk, price risk and volatility
risk in BB&T’s lines of business. The primary objectives of market risk management are to minimize any adverse effect
that changes in market risk factors may have on net interest income, and to offset the risk of price changes for certain assets
recorded at fair value. Market Risk Management also performs the enterprise-wide IPV function.Interest Rate Market Risk (Other than Trading)BB&T actively manages market risk associated with asset
and liability portfolios with a focus on the strategic pricing of asset and liability accounts and management of appropriate maturity
mixes of assets and liabilities. The goal of these activities is the development of appropriate maturity and repricing opportunities
in BB&T’s portfolios of assets and liabilities that will produce reasonably consistent net interest income during periods
of changing interest rates. These portfolios are analyzed for proper fixed-rate and variable-rate mixes under various interest
rate scenarios.The asset/liability management process is designed to achieve
relatively stable NIM and assure liquidity by coordinating the volumes, maturities or repricing opportunities of earning assets,
deposits and borrowed funds. Among other things, this process gives consideration to prepayment trends related to securities, loans
and leases and certain deposits that have no stated maturity. Prepayment assumptions are developed using a combination of market
data and internal historical prepayment experience for residential mortgage-related loans and securities, and internal historical
prepayment experience for client deposits with no stated maturity and loans that are not residential mortgage related. These assumptions
are subject to monthly back-testing, and are adjusted as deemed necessary to reflect changes in interest rates relative to the
reference rate of the underlying assets or liabilities. On a monthly basis, BB&T evaluates the accuracy of its interest rate
forecast simulation model, which includes an evaluation of its prepayment assumptions, to ensure that all significant assumptions
inherent in the model appropriately reflect changes in the interest rate environment and related trends in prepayment activity.
It is the responsibility of the MRLCC to determine and achieve the most appropriate volume and mix of earning assets and interest-bearing
liabilities, as well as to ensure an adequate level of liquidity and capital, within the context of corporate performance goals.
The MRLCC also sets policy guidelines and establishes long-term strategies with respect to interest rate risk exposure and liquidity.
The MRLCC meets regularly to review BB&T’s interest rate risk and liquidity positions in relation to present and prospective
market and business conditions, and adopts funding and balance sheet management strategies that are intended to ensure that the
potential impact on earnings and liquidity as a result of fluctuations in interest rates is within acceptable standards.BB&T uses derivatives primarily to manage economic risk
related to securities, commercial loans, MSRs and mortgage banking operations, long-term debt and other funding sources. BB&T
also uses derivatives to facilitate transactions on behalf of its clients. As of December 31, 2012, BB&T had derivative financial
instruments outstanding with notional amounts totaling $73.3 billion, with a net fair value of $13 million. See Note 19 “Derivative
Financial Instruments” in the “Notes to Consolidated Financial Statements” herein for additional disclosures.The majority of BB&T’s assets and liabilities are
monetary in nature and, therefore, differ greatly from most commercial and industrial companies that have significant investments
in fixed assets or inventories. Fluctuations in interest rates and actions of the FRB to regulate the availability and cost of
credit have a greater effect on a financial institution’s profitability than do  Field: Page; Sequence: 68; Value: 2 the effects of higher costs for goods and
services. Through its balance sheet management function, which is monitored by the MRLCC, management believes that BB&T is
positioned to respond to changing needs for liquidity, changes in interest rates and inflationary trends.Management uses the Simulation to measure the sensitivity
of projected earnings to changes in interest rates. The Simulation model projects net interest income and interest rate risk for
a rolling two-year period of time. The Simulation takes into account the current contractual agreements that BB&T has made
with its customers on deposits, borrowings, loans, investments and commitments to enter into those transactions. Furthermore, the
Simulation considers the impact of expected customer behavior. Management monitors BB&T’s interest sensitivity by means
of a model that incorporates current volumes, average rates earned and paid, and scheduled maturities and payments of asset and
liability portfolios, together with multiple scenarios that include projected prepayments, repricing opportunities and anticipated
volume growth. Using this information, the model projects earnings based on projected portfolio balances under multiple interest
rate scenarios. This level of detail is needed to simulate the effect that changes in interest rates and portfolio balances may
have on the earnings of BB&T. This method is subject to the accuracy of the assumptions that underlie the process, but management
believes that it provides a better illustration of the sensitivity of earnings to changes in interest rates than other analyses
such as static or dynamic gap. In addition to Simulation analysis, BB&T uses EVE analysis to focus on projected changes in
capital given potential changes in interest rates. This measure also allows BB&T to analyze interest rate risk that falls outside
the analysis window contained in the Simulation model. The EVE model is a discounted cash flow of the entire portfolio of BB&T’s
assets, liabilities, and derivatives instruments. The difference in the present value of assets minus the present value of liabilities
is defined as the economic value of BB&T’s equity.The asset/liability management process requires a number
of key assumptions. Management determines the most likely outlook for the economy and interest rates by analyzing external factors,
including published economic projections and data, the effects of likely monetary and fiscal policies, as well as any enacted or
prospective regulatory changes. BB&T’s current and prospective liquidity position, current balance sheet volumes and
projected growth, accessibility of funds for short-term needs and capital maintenance are also considered. This data is combined
with various interest rate scenarios to provide management with the information necessary to analyze interest sensitivity and to
aid in the development of strategies to reach performance goals.The following table shows the effect that the indicated changes
in interest rates would have on net interest income as projected for the next twelve months assuming a gradual change in interest
rates as described below. Key assumptions in the preparation of the table include prepayment speeds of mortgage-related assets,
cash flows and maturities of derivative financial instruments, loan volumes and pricing, deposit sensitivity, customer preferences
and capital plans. The resulting change in net interest income reflects the level of sensitivity that interest-sensitive income
has in relation to changing interest rates.


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The MRLCC has established parameters related to interest
sensitivity that prescribe a maximum negative impact on net interest income under different interest rate scenarios. In the event
the results of the Simulation model fall outside the established parameters, management will make recommendations to the MRLCC
on the most appropriate response given the current economic forecast. The following parameters and interest rate scenarios are
considered BB&T’s primary measures of interest rate risk:
·Maximum negative impact on net interest income of 2% for the next
12 months assuming a linear change in interest rates totaling 100 basis points over four months followed by a flat interest rate
scenario for the remaining eight month period.
·Maximum negative impact on net interest income of 4% for the next
12 months assuming a linear change of 200 basis points over eight months followed by a flat interest rate scenario for the remaining
four month period.  Field: Page; Sequence: 69; Value: 2 These “interest rate ramp” limits are considered
BB&T’s primary measure of interest rate risk. If a rate change of 200 basis points cannot be modeled due to a low level
of rates, a proportional limit applies. Management currently only models a negative 25 basis point decline because larger declines
would have resulted in a Federal funds rate of less than zero. In a situation such as this, the maximum negative impact on net
interest income is adjusted on a proportional basis. Regardless of the proportional limit, the negative risk exposure limit will
be the greater of 1% or the proportional limit.Management has also established a maximum negative impact
on net interest income of 4% for an immediate 100 basis points change in rates and 8% for an immediate 200 basis points change
in rates. These “interest rate shock” limits are designed to create an outer band of acceptable risk based upon a significant
and immediate change in rates.Management must also consider how the balance sheet and interest
rate risk position could be impacted by changes in balance sheet mix. Liquidity in the banking industry has been very strong during
the current economic downturn. Much of this liquidity increase has been due to a significant increase in noninterest-bearing demand
deposits. Consistent with the industry, Branch Bank has seen a significant increase in this funding source. The behavior of these
deposits is one of the most important assumptions used in determining the interest rate risk position of BB&T. A loss of these
deposits in the future would reduce the asset sensitivity of BB&T’s balance sheet as the company increases interest-bearing
funds to offset the loss of this advantageous funding source.Beta represents the correlation between overall market interest
rates and the rates paid by BB&T on interest-bearing deposits. BB&T applies an average beta of approximately 80% to its
managed rate deposits for determining its interest rate sensitivity. Managed rate deposits are high beta, premium money market
and interest checking accounts, which attract significant client funds when needed to support balance sheet growth. BB&T regularly
conducts sensitivity on other key variables to determine the impact they could have on the interest rate risk position. This discipline
informs management judgment and allows BB&T to evaluate the likely impact on its balance sheet management strategies due to
a more extreme variation in a key assumption than expected.The following table shows the effect that the loss of demand
deposits and an associated increase in managed rate deposits would have on BB&T’s interest-rate sensitivity position.
For purposes of this analysis, BB&T modeled the beta at 100%.


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The following table shows the effect that the indicated changes
in interest rates would have on EVE. Key assumptions in the preparation of the table include prepayment speeds of mortgage-related
and other assets, cash flows and maturities of derivative financial instruments, loan volumes and pricing and deposit sensitivity.
The resulting change in the EVE reflects the level of sensitivity that EVE has in relation to changing interest rates. Field: Page; Sequence: 70; Value: 2


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Market Risk from Trading ActivitiesBB&T also manages market risk from trading activities
which consists of acting as a financial intermediary to provide its customers access to derivatives, foreign exchange and securities
markets. Trading market risk is managed through the use of statistical and non-statistical risk measures and limits, with overall
firm limits established through Board Policy. BB&T utilizes a historical VaR methodology to measure and aggregate risks across
its covered trading lines of business. This methodology uses one year of historical data to estimate economic outcomes for a one-day
time horizon at a 99% confidence level.The average VaR for the year ended December 31, 2012 was
less than $1 million. The maximum daily VaR was approximately $3 million, and the low daily VaR was less than $1 million during
the same period.LiquidityLiquidity represents BB&T’s continuing ability
to meet funding needs, primarily deposit withdrawals, timely repayment of borrowings and other liabilities, and funding of loan
commitments. In addition to the level of liquid assets, such as cash, cash equivalents and securities available for sale, many
other factors affect the ability to meet liquidity needs, including access to a variety of funding sources, maintaining borrowing
capacity in national money markets, growing core deposits, the repayment of loans and the capability to securitize or package loans
for sale. BB&T monitors key liquidity metrics at both the Parent Company and Branch Bank.Parent CompanyThe purpose of the Parent Company is to serve as the capital
financing vehicle for the operating subsidiaries. The assets of the Parent Company consist primarily of cash on deposit with Branch
Bank, equity investments in subsidiaries, advances to subsidiaries, accounts receivable from subsidiaries, and other miscellaneous
assets. The principal obligations of the Parent Company are principal and interest payments on long-term debt. The main sources
of funds for the Parent Company are dividends and management fees from subsidiaries, repayments of advances to subsidiaries, and
proceeds from the issuance of long-term debt. The primary uses of funds by the Parent Company are for investments in subsidiaries,
advances to subsidiaries, dividend payments to common and preferred shareholders, retirement of common stock and interest and principal
payments due on long-term debt.The primary source of funds used for Parent Company cash
requirements was dividends received from subsidiaries, which totaled $1.8 billion during 2012. In addition, the Parent Company
issued $2.0 billion of senior notes and $300 million of subordinated notes during 2012, repaid $1.5 billion of maturing long-term
debt and redeemed all of its junior subordinated debt to unconsolidated trusts. Funds raised through master note agreements with
commercial clients are placed in a note receivable at Branch Bank primarily for its use in meeting short-term funding needs and,
to a lesser extent, to support the short-term temporary cash needs of the Parent Company. At December 31, 2012 and 2011, master
note balances totaled $37 million and $296 million, respectively.The Parent Company had ten issues of senior notes outstanding
totaling $6.0 billion and four issues of subordinated notes outstanding totaling $2.2 billion at December 31, 2012.Liquidity at the Parent Company is more susceptible to market
disruptions. BB&T prudently manages cash levels at the Parent Company to cover a minimum of one year of projected contractual
cash outflows which includes unfunded external commitments, debt service, preferred dividends and scheduled debt maturities without
the benefit of any new cash infusions. Generally, BB&T maintains a significant buffer above the projected one year of contractual
cash outflows. In determining the buffer, BB&T considers cash for common dividends, unfunded commitments to affiliates, being
a source of strength to its banking subsidiaries, and being able to withstand sustained market disruptions which may limit access
to the credit markets. Field: Page; Sequence: 71; Value: 2  As of December 31, 2012 and 2011, the Parent Company had 35 months and 23 months, respectively, of cash
on hand to satisfy projected contractual cash outflows as described above.Branch BankBranch 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, 2012, BB&T has approximately $53 billion of secured borrowing capacity,
which represents approximately 290% of one year wholesale funding maturities.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, 2012, and December 31, 2011, BB&T’s liquid asset buffer was 11.1% and 13.5%, respectively, of total assets.BB&T’s and Branch Bank’s ability to raise
funding at competitive prices is affected by the rating agencies’ views of BB&T’s and Branch Bank’s credit
quality, liquidity, capital and earnings. Management meets with the rating agencies on a routine basis to discuss the current outlook
for BB&T and Branch Bank. The ratings for BB&T and Branch Bank by the four major rating agencies are detailed in the table
below.