Shareholders' Equity

12 Months Ended

Dec. 31, 2013

Shareholders' Equity

Shareholders' Equity

NOTE 10. Shareholders' Equity

Preferred Stock
The following table presents a summary of the non-cumulative perpetual preferred stock as of December 31, 2013:
			Earliest
		Issuance	Redemption	Liquidation		Carrying		Dividend
	Issue	Date	Date	Amount		Amount		Rate
				(Dollars in millions)
	Series D	5/1/12	5/1/17	$	575	$	559	5.850	%
	Series E	7/31/12	8/1/17		1,150		1,120	5.625
	Series F	10/31/12	11/1/17		450		437	5.200
	Series G	5/1/13	6/1/18		500		487	5.200
				$	2,675	$	2,603

Dividends on the preferred stock, if declared, accrue and are payable quarterly, in arrears. For each issuance, BB&T issued depositary shares, each of which represents a fractional ownership interest in a share of the Company's preferred stock. The preferred stock has no stated maturity and redemption is solely at the option of the Company in whole, but not in part, upon the occurrence of a regulatory capital treatment event, as defined. In addition, the preferred stock may be redeemed in whole or in part, on any dividend payment date after five years from the date of issuance. Under current rules, any redemption of the preferred stock is subject to prior approval of the FRB. The preferred stock is not subject to any sinking fund or other obligations of the Company.

Equity-Based Compensation Plans

At December 31, 2013, options, restricted shares and RSUswere outstanding from equity-based compensation plans that have been approved by shareholders. The majority of outstanding awards and awards available to be issued relate to plans that allow for accelerated vesting of awards for holders who retire and have met all retirement eligibility requirements or in connection with certain other events.Certain of these awards are subject to forfeiture under certain specified circumstances until vested that may result in cancellation prior to vesting.Those plans are intended to assist the Company in recruiting and retaining employees, directors and independent contractors and to associate the interests of eligible participants with those of BB&T and its shareholders. The following table provides a summary of the equity-based compensation plans:

Equity-Based Compensation Plans	December 31, 2013
Shares available for future grants (in thousands)	30,562
Vesting period, awards granted prior to 2010	5.0	yrs
Vesting period, awards granted after 2009	3.0 to 5.0
Option term	10.0

The fair value of each option award is measured on the date of grant using the Black-Scholes option-pricing model. Substantially all of the awards are granted in February of each year. The assumptions used in the valuation of equity-based awards are as follows:
	Assumption	Definition
	Fair value of restricted shares	Based on the common stock price on the grant date
	Fair value of RSUs	Based on the common stock price on the grant date less the present value of expected dividends that are foregone during the vesting period
	Expected life	Based on historical behavior of employees related to exercises, forfeitures and cancellations, adjusted for current information that indicates the future is reasonably expected to differ from the past
	Risk-free interest rate	Based on U.S. Treasury yield curve in effect at the time of the grant
	Dividend yield	Based on the historical dividend yield of BB&T's stock, adjusted to reflect the expected dividend yield over the expected life of the option
	Volatility factor	Based on the historical volatility of the stock price, adjusted for current information that indicates the future is reasonably expected to differ from the past

The following weighted-average assumptions were used for grants during 2013, 2012, and 2011:
			December 31,
			2013			2012			2011
	Assumptions:
		Risk-free interest rate		1.3	%		1.5	%		1.7	%
		Dividend yield		3.6			4.4			3.5
		Volatility factor		28.0			33.0			37.2
		Expected life		7.0	yrs		7.0	yrs		7.4	yrs
	Fair value of options per share		$	5.48		$	6.07		$	7.45

BB&T previously issued grants to non-executive employees consisting of stock options and RSUs, while recent grants to non-executive employees have primarily consisted of RSUs. A summary of selected data related to equity-based compensation costs follows:

	Years Ended December 31,
	2013		2012		2011
	(Dollars in millions)
Equity-based compensation expense	$	96	$	97	$	98
Income tax benefit from equity-based compensation expense		36		36		36
Intrinsic value of options exercised and RSUs that vested during the year		102		62		54
Grant date fair value of equity-based awards that vested during the year		80		88		76
			December 31,
			2013		2012
			(Dollars in millions)
Unrecognized compensation cost related to equity-based awards			$	94	$	98
Weighted-average life over which compensation cost is expected to be recognized (years)				2.1		2.0

The following tables present the activity during 2013 related to equity-based compensation awards:
								Wtd. Avg.
				Wtd. Avg.		Aggregate		Remaining
				Exercise		Intrinsic		Contractual
			Options	Price		Value		Life
			(Dollars in millions, except per share data, shares in thousands)
	Outstanding at January 1, 2013		45,391	$	34.15
		Granted	404		30.08
		Exercised	(3,507)		27.14
		Forfeited or expired	(4,292)		32.86
	Outstanding at December 31, 2013		37,996		34.90	$	140	3.7	yrs
	Exercisable at December 31, 2013		31,354		36.32		80	2.9
	Exercisable and expected to vest at December 31, 2013		37,513		34.99		136	3.7

			Wtd. Avg.
		Restricted	Grant Date
		Shares/Units	Fair Value
		(shares in thousands)
Nonvested at January 1, 2013		13,931	$	19.26
	Granted	3,995		25.63
	Vested	(2,464)		22.05
	Forfeited	(281)		20.45
Nonvested at December 31, 2013		15,181		20.46
Expected to vest at December 31, 2013		13,763		20.49

Share Repurchase Activity

At December 31, 2013, BB&T was authorized to repurchase an additional 44 million shares under the June 27, 2006 Board of Directors' authorization. No shares of common stock were repurchased under this plan during 2013, 2012 or 2011.