Securities

3 Months Ended

Mar. 31, 2012

Securities

Securities

NOTE 2. Securities

The amortized cost, gross unrealized gains and losses and approximate fair values of securities available for sale and held to maturity were as follows:
				Amortized		Gross Unrealized				Fair
	March 31, 2012			Cost		Gains		Losses		Value
				(Dollars in millions)
	Securities available for sale:
		U.S. government-sponsored entities (“GSE”)		$	341	$	—	$	—	$	341
		Mortgage-backed securities issued by GSE			19,903		262		7		20,158
		States and political subdivisions			1,951		102		104		1,949
		Non-agency mortgage-backed securities			346		—		41		305
		Other securities			6		—		—		6
		Covered securities			1,210		411		—		1,621
			Total securities available for sale	$	23,757	$	775	$	152	$	24,380
	Securities held to maturity:
		GSE securities		$	500	$	—	$	2	$	498
		Mortgage-backed securities issued by GSE			12,429		45		16		12,458
		States and political subdivisions			35		—		—		35
		Other securities			521		1		6		516
			Total securities held to maturity	$	13,485	$	46	$	24	$	13,507

			Amortized		Gross Unrealized				Fair
December 31, 2011			Cost		Gains		Losses		Value
			(Dollars in millions)
Securities available for sale:
	GSE securities		$	305	$	1	$	—	$	306
	Mortgage-backed securities issued by GSE			17,940		199		7		18,132
	States and political subdivisions			1,977		91		145		1,923
	Non-agency mortgage-backed securities			423		—		55		368
	Other securities			7		—		—		7
	Covered securities			1,240		343		6		1,577
		Total securities available for sale	$	21,892	$	634	$	213	$	22,313
Securities held to maturity:
	GSE securities		$	500	$	—	$	—	$	500
	Mortgage-backed securities issued by GSE			13,028		32		23		13,037
	States and political subdivisions			35		—		2		33
	Other securities			531		1		4		528
		Total securities held to maturity	$	14,094	$	33	$	29	$	14,098

As of March 31, 2012, the fair value of covered securities included $1.3 billion of non-agency mortgage-backedsecurities and $324 million of municipal securities. As of December 31, 2011, the fair value of coveredsecurities included $1.3 billion of non-agency mortgage-backed securities and $326 million of municipalsecurities. All covered securities are subject to loss sharing agreements with the FDIC and cannot be sold without their prior approval.

At March 31, 2012and December 31, 2011, securities with carrying values of approximately $14.5 billionand $15.5 billion, respectively, were pledged to secure municipal deposits, securities sold under agreements torepurchase, other borrowings, and for other purposes as required or permitted by law.

Investments in marketable debt securities and mortgage-backed securities issued by Fannie Mae had total amortized cost and fair value of $11.3 billion and $11.4 billion, respectively,at March 31, 2012. Investments in securities issued by Freddie Mac had total amortized cost and fair value of $9.4billion and $9.5 billion, respectively.

At March 31, 2012and December 31, 2011, non-agency mortgage-backed securities consisted of residential mortgage-backed securities.

The gross realized gains and losses are reflected in the following table:
		Three Months Ended
		March 31,
			2012		2011
		(Dollars in millions)
	Gross gains	$	―	$	21
	Gross losses		(4)		―
	Net realized gains (losses)		(4)		21

For the three months ended March 31, 2011, all other-than-temporary impairment (“OTTI”) recognized into net income was from non-agency mortgage-backed securities.For the three months ended March 31, 2012, $4 million of the OTTI was related to covered securities.

The following table reflects activity during the three months ended March 31, 2012 and 2011 related to credit losses on other-than-temporarily impaired non-agency mortgage-backed securities where a portion of the unrealized loss was recognized in other comprehensive income:
			Three Months Ended
			March 31,
				2012		2011
			(Dollars in millions)
	Balance at beginning of period		$	129	$	30
		Credit losses on securities for which OTTI was previously recognized		1		21
		Reductions for securities sold/settled during the period		(16)		―
	Balance at end of period		$	114	$	51

The amortized cost and estimated fair value of the debt securities portfolio at March 31, 2012, bycontractual maturity, are shown in the accompanying table. The expected life of mortgage-backed securities willdiffer from contractual maturities because borrowers may have the right to call or prepay the underlyingmortgage loans with or without call or prepayment penalties. For purposes of the maturity table, mortgage-backedsecurities, which are not due at a single maturity date, have been included in maturity groupings based onthe contractual maturity.

			Available for Sale				Held to Maturity
			Amortized		Fair		Amortized		Fair
March 31, 2012			Cost		Value		Cost		Value
			(Dollars in millions)
Due in one year or less			$	179	$	179	$	1	$	1
Due after one year through five years				186		188		―		―
Due after five years through ten years				652		685		501		499
Due after ten years				22,734		23,322		12,983		13,007
	Total debt securities			23,751		24,374		13,485		13,507
	Total securities with no stated maturity			6		6		―		―
		Total securities	$	23,757	$	24,380	$	13,485	$	13,507

The following tables reflect the gross unrealized losses and fair values of BB&T’s investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:
				Less than 12 months				12 months or more				Total
				Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	March 31, 2012			Value		Losses		Value		Losses		Value		Losses
				(Dollars in millions)
	Securities available for sale:
		GSE securities		$	230	$	—	$	—	$	—	$	230	$	—
		Mortgage-backed securities issued by GSE			1,680		7		1		—		1,681		7
		States and political subdivisions			70		5		551		99		621		104
		Non-agency mortgage-backed securities			—		—		305		41		305		41
			Total	$	1,980	$	12	$	857	$	140	$	2,837	$	152
	Securities held to maturity:
		GSE securities		$	498	$	2	$	—	$	—	$	498	$	2
		Mortgage-backed securities issued by GSE			4,678		16		—		—		4,678		16
		States and political subdivisions			1		—		7		—		8		—
		Other securities			512		6		—		—		512		6
			Total	$	5,689	$	24	$	7	$	—	$	5,696	$	24

			Less than 12 months				12 months or more				Total
			Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2011			Value		Losses		Value		Losses		Value		Losses
			(Dollars in millions)
Securities available for sale:
	GSE securities		$	24	$	—	$	—	$	—	$	24	$	—
	Mortgage-backed securities issued by GSE			3,098		7		—		—		3,098		7
	States and political subdivisions			453		68		265		77		718		145
	Non-agency mortgage-backed securities			—		—		368		55		368		55
	Covered securities			29		6		—		—		29		6
		Total	$	3,604	$	81	$	633	$	132	$	4,237	$	213
Securities held to maturity:
	GSE securities		$	250	$	—	$	—	$	—	$	250	$	—
	Mortgage-backed securities issued by GSE			7,770		23		—		—		7,770		23
	States and political subdivisions			33		2		—		—		33		2
	Other securities			207		4		—		—		207		4
		Total	$	8,260	$	29	$	—	$	—	$	8,260	$	29

BB&T conducts periodic reviews to identify and evaluate each investment that has an unrealized loss forother-than-temporary impairment. An unrealized loss exists when the current fair value of an individual securityis less than its amortized cost basis. Unrealized losses that are determined to be temporary in nature are recorded,net of tax, in accumulated other comprehensive income for available-for-sale securities.

Factors considered in determining whether a loss is temporary include:

• The financial condition and near-term prospects of the issuer, including any specific events that may influence the operations of the issuer;
• BB&T's intent to sell and whether it is more likely than not that the Company will be required to sell these debt securities before the anticipated recovery of the amortized cost basis;
• The length of time and the extent to which the market value has been less than cost;
• Whether the decline in fair value is attributable to specific conditions, such as conditions in an industry or in a geographic area;
• Whether a debt security has been downgraded by a rating agency;
• Whether the financial condition of the issuer has deteriorated;
• The seniority of the security;
• Whether dividends have been reduced or eliminated, or scheduled interest payments on debt securities have not been made; and
• Any other relevant available information.

If an unrealized loss is considered other-than-temporary, the credit component of the unrealized loss is recognized in earnings and the non-credit component is recognized in accumulated other comprehensive income, to the extent that BB&T does not intend to sell the security and it is morelikelythannot that BB&T will not be required to sell the security prior to recovery.

BB&T evaluates credit impairment related to non-agency mortgage-backed securities through the use of cash flow modeling. These models give consideration to long-term macroeconomic factors applied to current security default rates, prepayment rates and recovery rates and security-level performance.

During 2012, BB&T realized principal losses on certain other-than-temporarily impaired securities. These realized losses were a factor in evaluating the level of OTTI necessary to address future projected losses.

AtMarch 31, 2012, BB&T held certain investment securities having continuous unrealizedloss positions for more than 12 months. The vast majority of these losses were in non-agency mortgage-backed and municipalsecurities. At March 31, 2012, all of the available-for-sale debt securities in an unrealized loss position for more than 12 months,excluding those covered by FDIC loss sharing agreements, were investment grade with the exception of onemunicipal bond with an amortized cost of $3 million and seven non-agency mortgage-backed securities with an adjustedamortized cost of $346million.All of these non-investment grade securities were initially investmentgrade and have been downgraded since purchase. Based on its evaluation at March 31, 2012, BB&T determinedthat certain of the non-investment grade non-agency mortgage-backed securities had credit losses evident andrecognized OTTI related to these securities. At March 31, 2012, the total unrealized loss on these non-investment grade securities was $41 million.

The following table presents non-investment grade securities with significant unrealized losses that are notcovered by a loss sharing arrangement and the credit loss component of OTTI recognized to date:

				Cumulative
		Amortized		Credit Loss		Adjusted		Fair		Unrealized
March 31, 2012		Cost		Recognized		Amortized Cost		Value		Loss
				(Dollars in millions)
Security:
	RMBS 1	$	129	$	(34)	$	95	$	80	$	(15)
	RMBS 2		100		(17)		83		73		(10)

BB&T's evaluation of the other debt securities with continuous unrealized losses indicated that there were no credit losses evident. Furthermore, as of the date of the evaluation, BB&T did not intend to sell, and it was more likely than not that the Company would not be required to sell, these debt securities before the anticipated recovery of the amortized cost basis. In making this determination, BB&T considers its expected liquidity and capital needs, including its asset/liability management needs, forecasts, strategies and other relevant information.