Regulatory Requirements and Other Restrictions

12 Months Ended

Dec. 31, 2014

Regulatory Requirements and Other Restrictions

Regulatory Capital Requirements under Banking Regulations

NOTE 16. Regulatory Requirements and Other Restrictions

Branch Bank is required by the FRB to maintain reserve balances in the form of vault cash or deposits with the FRB based on specified percentages of certain deposit types, subject to various adjustments. At December 31, 2014, the net reserve requirement amounted to $272 million.

Branch Bank is subject to laws and regulations that limit the amount of dividends it can pay. In addition, both BB&T and Branch Bank are subject to various regulatory restrictions relating to the payment of dividends, including requirements to maintain capital at or above regulatory minimums, and to remain “well-capitalized” under the prompt corrective action regulations. BB&T does not expect that any of these laws, regulations or policies will materially affect the ability of Branch Bank to pay dividends.

BB&T is subject to various regulatory capital requirements administered by the Federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory—and possibly additional discretionary—actions by regulators that, if undertaken, could have a direct material effect on the financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance-sheet items calculated pursuant to regulatory directives. BB&T's capital amounts and classification also are subject to qualitative judgments by the regulators about components, risk weightings and other factors. BB&T is in full compliance with these requirements. Banking regulations also identify five capital categories for IDIs: well-capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. At December 31, 2014 and 2013, BB&T and Branch Bank were classified as “well-capitalized,” and management believes that no events or changes have occurred subsequent to December 31, 2014 that would change this designation.

Quantitative measures established by regulation to ensure capital adequacy require BB&T to maintain minimum amounts and ratios of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital to average tangible assets (leverage ratio).

Risk-based capital ratios, which include Tier 1 Capital, Total Capital and Tier 1 Common Equity, are calculated based on regulatory guidance related to the measurement of capital and risk-weighted assets.

		December 31, 2014								December 31, 2013
		Actual Capital				Capital Requirements				Actual Capital				Capital Requirements
		Ratio		Amount		Minimum		Well-Capitalized		Ratio		Amount		Minimum		Well-Capitalized
		(Dollars in millions)
Tier 1 Capital:
	BB&T	12.4	%	$	17,840	$	5,747	$	8,620	11.8	%	$	16,074	$	5,460	$	8,189
	Branch Bank	11.7			16,329		5,591		8,387	11.9			15,785		5,315		7,973
Total Capital:
	BB&T	14.9			21,381		11,494		14,367	14.3			19,514		10,919		13,649
	Branch Bank	13.4			18,761		11,183		13,979	13.4			17,872		10,631		13,288
Leverage Capital:
	BB&T	9.9			17,840		7,191		8,989	9.3			16,074		6,897		8,621
	Branch Bank	9.3			16,329		5,265		8,775	9.4			15,785		5,058		8,429

As an approved seller/servicer, Branch Bank is required to maintain minimum levels of capital, as specified by various agencies, including the United States Department of Housing and Urban Development, GNMA, FHLMC and FNMA. At December 31, 2014 and 2013, Branch Bank's capital was above all required levels.