Securities

6 Months Ended

Jun. 30, 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
	June 30, 2012			Cost		Gains		Losses		Value
				(Dollars in millions)
	Securities available for sale:
		U.S. government-sponsored entities (“GSE”)		$	348	$	—	$	—	$	348
		Mortgage-backed securities issued by GSE			20,484		380		8		20,856
		States and political subdivisions			1,982		120		120		1,982
		Non-agency mortgage-backed securities			333		2		33		302
		Other securities			1		—		—		1
		Covered securities			1,190		388		—		1,578
			Total securities available for sale	$	24,338	$	890	$	161	$	25,067
	Securities held to maturity:
		GSE securities		$	500	$	2	$	—	$	502
		Mortgage-backed securities issued by GSE			11,326		172		1		11,497
		States and political subdivisions			34		1		—		35
		Other securities			716		1		7		710
			Total securities held to maturity	$	12,576	$	176	$	8	$	12,744

			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 June 30, 2012 and December 31, 2011, the fair value of covered securities included $1.3 billion of non-agency mortgage-backedsecurities and $326 million of municipal securities. All covered securities are subject to loss sharing agreements with the FDIC.

At June 30, 2012and December 31, 2011, securities with carrying values of approximately $13.3 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.

BB&T had certain investments in marketable debt securities and mortgage-backed securities issued by Fannie Mae andFreddie Mac that exceeded ten percent of shareholders' equity at June 30, 2012. The Fannie Mae investments had total amortized cost and fair value of $10.4billion and $10.6 billion, respectively,at June 30, 2012.TheFreddie Mac investmentshad total amortized cost and fair value of $8.6billion and $8.7 billion, respectively.

At June 30, 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				Six Months Ended
		June 30,				June 30,
			2012		2011		2012		2011
		(Dollars in millions)
	Gross gains	$	―	$	17	$	―	$	38
	Gross losses		―		(1)		(4)		(1)
	Net realized gains (losses)	$	―	$	16	$	(4)	$	37

The following table reflects activity during the three and six monthsended June 30, 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. There was $4 million of other-than-temporary impairment (“OTTI”) related to covered securities during the six monthsended June 30, 2012that is not reflected in this table.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
		2012		2011		2012		2011
	(Dollars in millions)
Balance at beginning of period	$	114	$	51	$	129	$	30
Credit losses on securities for which OTTI was previously recognized		2		18		3		39
Reductions for securities sold/settled during the period		(4)		(6)		(20)		(6)
Balance at end of period	$	112	$	63	$	112	$	63

The amortized cost and estimated fair value of the debt securities portfolio at June 30, 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 prepay the underlyingmortgage loans with or without 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
June 30, 2012		Cost		Value		Cost		Value
		(Dollars in millions)
Due in one year or less		$	185	$	185	$	1	$	1
Due after one year through five years			195		199		―		―
Due after five years through ten years			635		668		501		502
Due after ten years			23,323		24,015		12,074		12,241
	Total debt securities	$	24,338	$	25,067	$	12,576	$	12,744

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
	June 30, 2012			Value		Losses		Value		Losses		Value		Losses
				(Dollars in millions)
	Securities available for sale:
		GSE securities		$	215	$	—	$	—	$	—	$	215	$	—
		Mortgage-backed securities issued by GSE			2,453		8		1		—		2,454		8
		States and political subdivisions			69		3		536		117		605		120
		Non-agency mortgage-backed securities			—		—		244		33		244		33
		Covered securities			13		—		—		—		13		—
			Total	$	2,750	$	11	$	781	$	150	$	3,531	$	161
	Securities held to maturity:
		Mortgage-backed securities issued by GSE		$	1,048	$	1	$	254	$	—	$	1,302	$	1
		States and political subdivisions			1		—		2		—		3		—
		Other securities			557		7		—		—		557		7
			Total	$	1,606	$	8	$	256	$	—	$	1,862	$	8

			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			16		3		702		142		718		145
	Non-agency mortgage-backed securities			—		—		368		55		368		55
	Covered securities			29		6		—		—		29		6
		Total	$	3,167	$	16	$	1,070	$	197	$	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.

AtJune 30, 2012, BB&T held certain securities which were non-investment grade and had continuous unrealized loss positions for more than 12 months. These securities consisted of one municipal bond and six non-agency mortgage-backed securities which had a total adjusted amortized cost of $27 million and $277 million, respectively. The unrealized loss on these securities was $2 million and $33 million, respectively. All of these non-investment grade securities were initially investment grade and have been downgraded since purchase.

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
June 30, 2012		Cost		Recognized		Amortized Cost		Value		Loss
				(Dollars in millions)
Security:
	RMBS 1	$	124	$	(33)	$	91	$	76	$	(15)

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.