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Shareholders' Equity
 9 Months Ended
Sep. 30, 2012
Shareholders' Equity  
Shareholders' Equity

NOTE 9. Shareholders' Equity

Preferred Stock

On May 1, 2012, BB&T issued $575 million of Series D Non-Cumulative Perpetual Preferred Stock for net proceeds of $559 million. Dividends on the Series D Preferred Stock, if declared, accrue and are payable quarterly, in arrears, at a rate of 5.85% per annum. On July 31, 2012, BB&T issued $1.2 billion of Series E Non-Cumulative Perpetual Preferred Stock for net proceeds of $1.1 billion. Dividends on the Series E Preferred Stock, if declared, accrue and are payable quarterly, in arrears, at a rate of 5.625% per annum. For both issuances, BB&T issued depositary shares, each of which represents a fractional ownership interest in a share of 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 Federal Reserve Board. The preferred stock is not subject to any sinking fund or other obligations of the Corporation.

On October 31, 2012, BB&T issued $450 million of the Company's Series F Non-Cumulative Perpetual Preferred Stock. Dividends on the Series F Preferred Stock, if declared, accrue and are payable quarterly, in arrears, at a rate of 5.20% per annum.

Equity-Based Plans

At September 30, 2012, BB&T has options, restricted shares and restricted share units outstanding from the following equity-based compensation plans: the 2012 Incentive Plan (“2012 Plan”), the 2004 Stock Incentive Plan (“2004 Plan”), the 1995 Omnibus Stock Incentive Plan (“Omnibus Plan”), the Non-Employee Directors' Stock Option Plan (“Directors' Plan”), and a plan assumed from an acquired entity. BB&T's shareholders have approved all equity-based compensation plans with the exception of the plan assumed from an acquired entity. As of September 30, 2012, the 2012 Plan is the only plan that has shares available for future grants. All of BB&T's equity-based compensation plans allow for accelerated vesting of awards for holders who retire and have met all retirement eligibility requirements and in connection with certain other events.

BB&T measures the fair value of each option award on the date of grant using the Black-Scholes option-pricing model. The following table presents the weighted average assumptions used:

    Nine Months Ended September 30, 
    2012 2011 
            
 Assumptions:        
  Risk-free interest rate  1.5%   1.7% 
  Dividend yield  4.4    3.5  
  Volatility factor  33.0    37.2  
  Expected life  7.0yrs   7.4yrs 
 Fair value of options per share$ 6.07  $ 7.45  

BB&T determines the assumptions used in the Black-Scholes option pricing model as follows: the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant; the dividend yield is 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; the volatility factor is based on the historical volatility of BB&T's stock, adjusted to reflect the ways in which current information indicates that the future is reasonably expected to differ from the past; and the weighted-average expected life is based on the historical behavior of employees related to exercises, forfeitures and cancellations.

BB&T measures the fair value of restricted shares based on the price of BB&T's common stock on the grant date and the fair value of restricted share units based on the price of BB&T's common stock on the grant date less the present value of expected dividends that are foregone during the vesting period.

The following table details the activity related to stock options awarded by BB&T: 
  
     Wtd. Avg. 
     Exercise 
   Options Price 
        
 Outstanding at January 1, 2012 45,384,554 $ 34.42 
  Granted 4,683,073   30.09 
  Exercised (1,208,481)   23.56 
  Forfeited or expired (3,258,133)   36.46 
 Outstanding at September 30, 2012 45,601,013   34.12 
 Exercisable at September 30, 2012 34,274,139   36.05 
 Exercisable and expected to vest at September 30, 2012 44,420,189 $ 34.27 

The following table details the activity related to restricted shares and restricted share units awarded by BB&T:
            
         Wtd. Avg. 
         Grant Date 
       Shares/Units Fair Value 
 Nonvested at January 1, 2012 13,462,630 $ 19.47 
  Granted 2,580,306   25.81 
  Vested (1,652,869)   31.38 
  Forfeited (277,376)   19.16 
 Nonvested at September 30, 2012 14,112,691 $ 19.24