Securities

9 Months Ended

Sep. 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
	September 30, 2012			Cost		Gains		Losses		Value
				(Dollars in millions)
	Securities available for sale:
		U.S. government-sponsored entities (“GSE”)		$	313	$	—	$	—	$	313
		Mortgage-backed securities issued by GSE			19,358		517		4		19,871
		States and political subdivisions			1,965		148		100		2,013
		Non-agency residential mortgage-backed securities			319		11		11		319
		Other securities			1		—		—		1
		Covered securities			1,169		412		—		1,581
			Total securities available for sale	$	23,125	$	1,088	$	115	$	24,098
	Securities held to maturity:
		GSE securities		$	2,500	$	12	$	1	$	2,511
		Mortgage-backed securities issued by GSE			9,902		298		1		10,199
		States and political subdivisions			34		1		1		34
		Other securities			704		2		5		701
			Total securities held to maturity	$	13,140	$	313	$	8	$	13,445

			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 residential 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 September 30, 2012, the fair value of covered securities included $1.3 billion of non-agency residential mortgage-backedsecurities and $328 million of municipal securities. As of December 31, 2011, the fair value of covered securities included $1.3 billion of non-agency residential mortgage-backedsecurities and $326 million of municipal securities. All covered securities are subject to loss sharing agreements with the FDIC.

At September 30, 2012and December 31, 2011, securities with carrying values of approximately $12.9 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 the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) that exceeded ten percent of shareholders' equity at September 30, 2012. The Fannie Mae investments had total amortized cost and fair value of $10.6 billion and $10.8 billion, respectively.TheFreddie Mac investmentshad total amortized cost and fair value of $8.3billion.

The gross realized gains and losses are reflected in the following table:
		Three Months Ended				Nine Months Ended
		September 30,				September 30,
			2012		2011		2012		2011
		(Dollars in millions)
	Gross gains	$	1	$	―	$	1	$	38
	Gross losses		―		―		(4)		(1)
	Net realized gains (losses)	$	1	$	―	$	(3)	$	37

The following table reflectschanges in credit losses on other-than-temporarily impaired securities, which was primarily non-agency residential mortgage-backed securities, where a portion of the unrealized loss was recognized in other comprehensive incomeduring the three and nine monthsended September 30, 2012 and 2011. Other-than-temporary impairment (“OTTI”)of $4 million related to covered securitiesduring the nine monthsended September 30, 2012is not reflected in this table.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
		2012		2011		2012		2011
	(Dollars in millions)
Balance at beginning of period	$	113	$	63	$	130	$	30
Credit losses on securities for which OTTI was previously recognized		2		39		5		78
Reductions for securities sold/settled during the period		(4)		(2)		(24)		(8)
Balance at end of period	$	111	$	100	$	111	$	100

The amortized cost and estimated fair value of the debt securities portfolio at September 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
September 30, 2012		Cost		Value		Cost		Value
		(Dollars in millions)
Due in one year or less		$	144	$	144	$	1	$	1
Due after one year through five years			200		204		―		―
Due after five years through ten years			657		698		1,323		1,326
Due after ten years			22,124		23,052		11,816		12,118
	Total debt securities	$	23,125	$	24,098	$	13,140	$	13,445

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
	September 30, 2012			Value		Losses		Value		Losses		Value		Losses
				(Dollars in millions)
	Securities available for sale:
		Mortgage-backed securities issued by GSE		$	1,040	$	3	$	339	$	1	$	1,379	$	4
		States and political subdivisions			18		—		513		100		531		100
		Non-agency residential mortgage-backed securities			—		—		146		11		146		11
			Total	$	1,058	$	3	$	998	$	112	$	2,056	$	115
	Securities held to maturity:
		GSE securities		$	299	$	1	$	—	$	—	$	299	$	1
		Mortgage-backed securities issued by GSE			836		—		193		1		1,029		1
		States and political subdivisions			23		1		3		—		26		1
		Other securities			397		5		57		—		454		5
			Total	$	1,555	$	7	$	253	$	1	$	1,808	$	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:
	Mortgage-backed securities issued by GSE		$	3,098	$	7	$	—	$	—	$	3,098	$	7
	States and political subdivisions			16		3		702		142		718		145
	Non-agency residential mortgage-backed securities			—		—		368		55		368		55
	Covered securities			29		6		—		—		29		6
		Total	$	3,143	$	16	$	1,070	$	197	$	4,213	$	213
Securities held to maturity:
	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	$	8,010	$	29	$	—	$	—	$	8,010	$	29

BB&T conducts periodic reviews to identify and evaluate each investment with 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.

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, the credit component of the unrealized loss is recognized in earnings and the non-credit component is recognized in accumulated other comprehensive income.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.

BB&T uses cash flow modeling to evaluate non-agency residential mortgage-backed securities in an unrealized loss position for potential credit impairment. These models give consideration to long-term macroeconomic factors applied to current security default rates, prepayment rates and recovery rates and security-level performance. At September 30, 2012, four non-agency residential mortgage-backed securities with an unrealized loss were below investment grade. None of the unrealized losses were significant.

At September 30, 2012, $88 million of unrealized loss on municipal securitieswas the result of fair value hedge basis adjustments that are a component of amortized cost. Municipal securities in an unrealized loss position are evaluated for credit impairment through a qualitative analysis of issuer performance and the primary source of repayment. The evaluation of municipal securities indicated there were no credit losses evident.