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Allowance for Credit Losses
 3 Months Ended
Mar. 31, 2012
Allowance for Credit Losses  
Allowance for Credit Losses

NOTE 4. Allowance for Credit Losses

An analysis of the allowance for credit losses is presented in the following tables:
 
    Beginning Charge-      Ending 
 Three Months Ended March 31, 2012 Balance Offs Recoveries Provision Balance 
                   
    (Dollars in millions) 
 Commercial:                
  Commercial and industrial $ 433 $ (63) $ 4 $ 152 $ 526 
  Commercial real estate - other   334   (73)   3   30   294 
  Commercial real estate - residential ADC   286   (54)   8   (34)   206 
  Other lending subsidiaries   11   (3)   1   4   13 
                   
 Retail:                
  Direct retail lending   232   (57)   10   116   301 
  Revolving credit   112   (22)   5   (1)   94 
  Residential mortgage   365   (42)   1   (23)   301 
  Sales finance   38   (7)   3   (2)   32 
  Other lending subsidiaries   186   (57)   6   47   182 
                   
 Covered and other acquired   149   (15)   ―   3   137 
                   
 Unallocated   110   ―   ―   (15)   95 
 Allowance for loan and lease losses   2,256   (393)   41   277   2,181 
 Reserve for unfunded lending commitments   29   ―   ―   11   40 
 Allowance for credit losses $ 2,285 $ (393) $ 41 $ 288 $ 2,221 

    Beginning Charge-      Ending 
 Three Months Ended March 31, 2011 Balance Offs Recoveries Provision Balance 
                   
    (Dollars in millions) 
 Commercial:                
  Commercial and industrial $ 621 $ (78) $ 4 $ (12) $ 535 
  Commercial real estate - other   446   (68)   3   116   497 
  Commercial real estate - residential ADC   469   (71)   4   19   421 
  Other lending subsidiaries   21   (2)   1   (2)   18 
                   
 Retail:                
  Direct retail lending   246   (78)   9   68   245 
  Revolving credit   109   (27)   5   18   105 
  Residential mortgage   298   (54)   1   83   328 
  Sales finance   47   (10)   2   4   43 
  Other lending subsidiaries   177   (50)   5   43   175 
                   
 Covered and other acquired   144   ―   ―   ―   144 
                   
 Unallocated   130   ―   ―   ―   130 
 Allowance for loan and lease losses   2,708   (438)   34   337   2,641 
 Reserve for unfunded lending commitments   47   ―   ―   3   50 
 Allowance for credit losses $ 2,755 $ (438) $ 34 $ 340 $ 2,691 

The following tables provide a breakdown of the allowance for loan and lease losses and the recorded investment in loans based on the method for determining the allowance:
             
     Allowance for Loan and Lease Losses 
           Loans    
           Acquired    
     Individually Collectively With    
     Evaluated Evaluated Deteriorated    
     for for Credit    
 March 31, 2012 Impairment Impairment Quality Total 
                 
     (Dollars in millions) 
 Commercial:             
  Commercial and industrial $ 91 $ 435 $ ― $ 526 
  Commercial real estate - other   54   240   ―   294 
  Commercial real estate - residential ADC   42   164   ―   206 
  Other lending subsidiaries   3   10   ―   13 
                 
 Retail:             
  Direct retail lending   31   270   ―   301 
  Revolving credit   26   68   ―   94 
  Residential mortgage   102   199   ―   301 
  Sales finance   1   31   ―   32 
  Other lending subsidiaries   22   160   ―   182 
                 
 Covered and other acquired   ―   36   101   137 
                 
 Unallocated   ―   95   ―   95 
   Total $ 372 $ 1,708 $ 101 $ 2,181 

     Loans and Leases 
           Loans    
           Acquired    
     Individually Collectively With    
     Evaluated Evaluated Deteriorated    
     for for Credit    
 March 31, 2012 Impairment Impairment Quality Total 
                 
     (Dollars in millions) 
 Commercial:             
  Commercial and industrial $ 769 $ 35,387 $ ― $ 36,156 
  Commercial real estate - other   418   10,125   ―   10,543 
  Commercial real estate - residential ADC   345   1,478   ―   1,823 
  Other lending subsidiaries   11   3,705   ―   3,716 
                 
 Retail:             
  Direct retail lending   160   14,702   ―   14,862 
  Revolving credit   61   2,098   ―   2,159 
  Residential mortgage   958   20,555   ―   21,513 
  Sales finance   18   7,569   ―   7,587 
  Other lending subsidiaries   55   5,180   ―   5,235 
                 
 Covered and other acquired   ―   2,597   1,970   4,567 
   Total $ 2,795 $ 103,396 $ 1,970 $ 108,161 

     Allowance for Loan and Lease Losses 
           Loans    
           Acquired    
     Individually Collectively With    
     Evaluated Evaluated Deteriorated    
     for for Credit    
 December 31, 2011 Impairment Impairment Quality Total 
                 
     (Dollars in millions) 
 Commercial:             
  Commercial and industrial $ 77 $ 356 $ ― $ 433 
  Commercial real estate - other   69   265   ―   334 
  Commercial real estate - residential ADC   50   236   ―   286 
  Other lending subsidiaries   1   10   ―   11 
                 
 Retail:             
  Direct retail lending   35   197   ―   232 
  Revolving credit   27   85   ―   112 
  Residential mortgage   152   213   ―   365 
  Sales finance   1   37   ―   38 
  Other lending subsidiaries   20   166   ―   186 
                 
 Covered and other acquired   ―   36   113   149 
                 
 Unallocated   ―   110   ―   110 
   Total $ 432 $ 1,711 $ 113 $ 2,256 

     Loans and Leases 
           Loans    
           Acquired    
     Individually Collectively With    
     Evaluated Evaluated Deteriorated    
     for for Credit    
 December 31, 2011 Impairment Impairment Quality Total 
                 
     (Dollars in millions) 
 Commercial:             
  Commercial and industrial $ 656 $ 35,759 $ ― $ 36,415 
  Commercial real estate - other   511   10,178   ―   10,689 
  Commercial real estate - residential ADC   420   1,641   ―   2,061 
  Other lending subsidiaries   5   3,621   ―   3,626 
                 
 Retail:             
  Direct retail lending   165   14,302   ―   14,467 
  Revolving credit   62   2,150   ―   2,212 
  Residential mortgage   931   19,650   ―   20,581 
  Sales finance   10   7,391   ―   7,401 
  Other lending subsidiaries   49   5,062   ―   5,111 
                 
 Covered and other acquired   ―   2,782   2,124   4,906 
   Total $ 2,809 $ 102,536 $ 2,124 $ 107,469 

BB&T monitors the credit quality of its commercial portfolio segment using internal risk ratings. These risk ratings are based on established regulatory guidance. Loans with a Pass rating represent those not considered as a problem credit. Special mention loans are those that have a potential weakness deserving management's close attention. Substandard loans are those where a well-defined weakness has been identified that may put full collection of contractual cash flows at risk. Substandard loans are placed in nonaccrual status when BB&T believes it is no longer probable it will collect all contractual cash flows.

BB&T assigns an internal risk rating at loan origination and reviews the relationship again on an annual basis or at any point management becomes aware of information affecting the borrower's ability to fulfill their obligations.

BB&T monitors the credit quality of its retail portfolio segment based primarily on delinquency status, which is the primary factor considered in determining whether a retail loan should be classified as nonaccrual.

The following tables illustrate the credit quality indicators associated with loans and leases held for investment. Covered and other acquired loans are excluded from this analysis because their related allowance is determined by loan pool performance due to the application of the accretion method.
 
           Commercial    
        Commercial Real Estate - Other 
     Commercial Real Estate - Residential Lending 
 March 31, 2012 & Industrial Other ADC Subsidiaries 
                 
     (Dollars in millions) 
 Commercial:             
  Pass $ 33,196 $ 8,669 $ 992 $ 3,664 
  Special mention   361   129   40   4 
  Substandard - performing   1,914   1,433   479   32 
  Nonperforming   685   312   312   16 
   Total $ 36,156 $ 10,543 $ 1,823 $ 3,716 

     Direct Retail Revolving Residential Sales Other Lending 
     Lending Credit Mortgage Finance Subsidiaries 
                    
     (Dollars in millions) 
 Retail:                
  Performing $ 14,723 $ 2,159 $ 21,193 $ 7,572 $ 5,191 
  Nonperforming   139   ―   320   15   44 
   Total $ 14,862 $ 2,159 $ 21,513 $ 7,587 $ 5,235 

           Commercial    
        Commercial Real Estate - Other 
     Commercial Real Estate - Residential Lending 
 December 31, 2011 & Industrial Other ADC Subsidiaries 
                 
     (Dollars in millions) 
 Commercial:             
  Pass $ 33,497 $ 8,568 $ 1,085 $ 3,578 
  Special mention   488   234   60   5 
  Substandard - performing   1,848   1,493   540   35 
  Nonperforming   582   394   376   8 
   Total  $ 36,415 $ 10,689 $ 2,061 $ 3,626 

      Direct Retail Revolving Residential Sales Other Lending 
      Lending Credit Mortgage Finance Subsidiaries 
                     
      (Dollars in millions) 
 Retail:                
  Performing $ 14,325 $ 2,212 $ 20,273 $ 7,394 $ 5,056 
  Nonperforming   142   ―   308   7   55 
   Total $ 14,467 $ 2,212 $ 20,581 $ 7,401 $ 5,111 

The following tables represent aging analyses of BB&T's past due loans and leases held for investment. Covered loans have been excluded from this aging analysis because they are covered by FDIC loss sharing agreements, and their related allowance is determined by loan pool performance due to the application of the accretion method. 
  
     Accruing Loans and Leases      
          90 Days Or Nonaccrual Total Loans And 
       30-89 Days More Past Loans And Leases, Excluding 
 March 31, 2012 Current Past Due Due Leases Covered Loans 
                    
     (Dollars in millions) 
 Commercial:                
  Commercial and industrial $ 35,407 $ 62 $ 2 $ 685 $ 36,156 
  Commercial real estate - other   10,204   26   1   312   10,543 
  Commercial real estate - residential ADC   1,503   8   ―   312   1,823 
  Other lending subsidiaries   3,681   14   5   16   3,716 
                    
 Retail:                
  Direct retail lending   14,540   135   48   139   14,862 
  Revolving credit   2,125   20   14   ―   2,159 
  Residential mortgage (1)   20,424   479   290   320   21,513 
  Sales finance   7,509   50   13   15   7,587 
  Other lending subsidiaries   5,032   158   1   44   5,235 
                    
 Other acquired   34   ―   1   ―   35 
   Total (1) $ 100,459 $ 952 $ 375 $ 1,843 $ 103,629 

      Accruing Loans and Leases      
           90 Days Or Nonaccrual Total Loans And 
        30-89 Days More Past Loans And Leases, Excluding 
 December 31, 2011 Current Past Due Due Leases Covered Loans 
                     
      (Dollars in millions) 
 Commercial:                
  Commercial and industrial $ 35,746 $ 85 $ 2 $ 582 $ 36,415 
  Commercial real estate - other   10,273   22   ―   394   10,689 
  Commercial real estate - residential ADC   1,671   14   ―   376   2,061 
  Other lending subsidiaries   3,589   25   4   8   3,626 
                     
 Retail:                
  Direct retail lending   14,109   161   55   142   14,467 
  Revolving credit   2,173   22   17   ―   2,212 
  Residential mortgage (1)   19,393   570   310   308   20,581 
  Sales finance   7,301   75   18   7   7,401 
  Other lending subsidiaries   4,807   248   1   55   5,111 
                     
 Other acquired   37   1   1   ―   39 
   Total (1) $ 99,099 $ 1,223 $ 408 $ 1,872 $ 102,602 
                     
                     
(1)Residential mortgage loans include $82 million and $91 million in government guaranteed loans 30-89 days past due, and $218 million and $206 million in government guaranteed loans 90 days or more past due as of March 31, 2012 and December 31, 2011, respectively.

The following tables set forth certain information regarding BB&T's impaired loans, excluding acquired impaired loans and loans held for sale, that were evaluated for specific reserves.
       
        Unpaid    Average Interest 
     Recorded Principal Related Recorded Income 
 As Of / For The Three Months Ended March 31, 2012Investment Balance Allowance Investment Recognized 
                    
     (Dollars in millions) 
 With No Related Allowance Recorded:               
  Commercial:               
   Commercial and industrial$ 128 $ 223 $ ― $ 126 $ ― 
   Commercial real estate - other  104   159   ―   101   ― 
   Commercial real estate - residential ADC  108   213   ―   110   ― 
                    
  Retail:               
   Direct retail lending  21   78   ―   22   ― 
   Residential mortgage (1)  84   141   ―   82   ― 
   Sales finance  1   2   ―   1   ― 
   Other lending subsidiaries  2   5   ―   4   ― 
                    
 With An Allowance Recorded:               
  Commercial:               
   Commercial and industrial  641   650   91   470   1 
   Commercial real estate - other  314   329   54   272   1 
   Commercial real estate - residential ADC  237   247   42   198   ― 
   Other lending subsidiaries  11   13   3   13   ― 
                    
  Retail:               
   Direct retail lending  139   146   31   137   2 
   Revolving credit  61   60   26   61   1 
   Residential mortgage (1)  637   652   91   596   7 
   Sales finance  17   17   1   9   ― 
   Other lending subsidiaries  53   55   22   48   ― 
    Total (1)$ 2,558 $ 2,990 $ 361 $ 2,250 $ 12 

          Unpaid    Average Interest 
       Recorded Principal Related Recorded  Income 
 As Of / For The Year Ended December 31, 2011 Investment Balance Allowance Investment Recognized 
       (Dollars in millions) 
                     
 With No Related Allowance Recorded:                
  Commercial:                
   Commercial and industrial $ 114 $ 196 $ ― $ 102 $ ― 
   Commercial real estate - other   102   163   ―   94   1 
   Commercial real estate - residential ADC   153   289   ―   145   ― 
                      
  Retail:                
   Direct retail lending   19   74   ―   23   1 
   Residential mortgage (1)   46   85   ―   55   2 
   Sales finance   1   1   ―   1   ― 
   Other lending subsidiaries   2   4   ―   3   ― 
                      
 With An Allowance Recorded:                
  Commercial:                
   Commercial and industrial   542   552   77   300   1 
   Commercial real estate - other   409   433   69   278   5 
   Commercial real estate - residential ADC   267   298   50   164   1 
   Other lending subsidiaries   5   5   1   5   ― 
                      
  Retail:                
   Direct retail lending   146   153   35   128   8 
   Revolving credit   62   61   27   61   3 
   Residential mortgage (1)   653   674   125   562   26 
   Sales finance   9   10   1   6   ― 
   Other lending subsidiaries   47   50   20   31   2 
    Total (1) $ 2,577 $ 3,048 $ 405 $ 1,958 $ 50 
                      
                      
(1)Residential mortgage loans exclude $237 million and $232 million in government guaranteed loans and related allowance of $11 million and $27 million as of March 31, 2012 and December 31, 2011, respectively. 

The following table provides a summary of the primary reason loan modifications were classified as restructurings and their estimated impact on the allowance for loan and lease losses:
                         
       Three Months Ended March 31, 
       2012 2011 
       Types of   Types of   
       Modifications (1) Increase To Modifications (1) Increase To 
       Rate (2) Structure Allowance Rate (2) Structure Allowance 
                         
       (Dollars in millions) 
 Commercial:                  
  Commercial and industrial$ 5 $ 28 $ ― $ 12 $ 13 $ 1 
  Commercial real estate - other  4   9   1   19   13   1 
  Commercial real estate - residential ADC  ―   13   ―   12   9   3 
                         
 Retail:                  
  Direct retail lending  6   2   1   16   1   3 
  Revolving credit  8   ―   2   11   ―   2 
  Residential mortgage  55   9   3   32   5   5 
  Sales finance  2   ―   ―   1   2   ― 
  Other lending subsidiaries  8   2   4   12   1   4 
                         
                         
(1)Includes modifications made to existing restructurings, as well as new modifications that are considered restructurings. Balances represent the recorded investment as of the end of the period in which the modification was made.
(2)Includes restructurings made with a below market interest rate that also includes a modification of loan structure.

Charge-offs recorded at the modification date were $4 million and $5 million for the three months ended March 31, 2012 and March 31, 2011, respectively. Modifications made to existing restructurings in the commercial portfolio segment approximated 11% and 29% of total commercial restructurings for the three months ended March 31, 2012 and March 31, 2011, respectively. The forgiveness of principal or interest for restructurings recorded during the three months ended March 31, 2012 and March 31, 2011 was immaterial.

The following table summarizes the pre-default balance for modifications that experienced a payment default that had been classified as restructurings during the previous 12 months. BB&T defines payment default as movement of the restructuring to nonaccrual status, foreclosure or charge-off, whichever occurs first.

     Three Months Ended March 31, 
     2012 2011 
           
     (Dollars in millions) 
 Commercial:      
  Commercial and industrial$ 2 $ 13 
  Commercial real estate - other  1   30 
  Commercial real estate - residential ADC  8   41 
           
 Retail:      
  Direct retail lending  2   9 
  Revolving credit  3   5 
  Residential mortgage   17   13 
  Sales finance  ―   1 
  Other lending subsidiaries  2   1 
           
If a restructuring subsequently defaults, BB&T evaluates the restructuring for possible impairment. As a result, the related allowance may be increased or charge-offs may be taken to reduce the carrying value of the loan.