Branch Bank and BB&T FSB are required by the FRB to maintain reserve balances in the form of vault cash or deposits with the FRB based on specified percentages of certain deposit types, subject to various adjustments. At December 31, 2012, the net reserve requirement amounted to $266 million.

Branch Bank is subject to laws and regulations that limit the amount of dividends it can pay. In addition, both BB&T and Branch Bank are subject to various regulatory restrictions relating to the payment of dividends, including requirements to maintain capital at or above regulatory minimums, and to remain “well-capitalized” under the prompt corrective action regulations. BB&T does not expect that any of these laws, regulations or policies will materially affect the ability of Branch Bank to pay dividends.

BB&T is subject to various regulatory capital requirements administered by the Federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory—and possibly additional discretionary—actions by regulators that, if undertaken, could have a direct material effect on BB&T's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of BB&T's assets, liabilities and certain off-balance-sheet items calculated pursuant to regulatory directives. BB&T's capital amounts and classification also are subject to qualitative judgments by the regulators about components, risk weightings and other factors. BB&T is in full compliance with these requirements. Banking regulations also identify five capital categories for insured depository institutions: well-capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. At December 31, 2012 and 2011, BB&T and Branch Bank were classified as “well-capitalized.”

Quantitative measures established by regulation to ensure capital adequacy require BB&T to maintain minimum amounts and ratios of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital to average tangible assets (leverage ratio).

Risk-based capital ratios, which include Tier 1 Capital, Total Capital and Tier 1 Common Equity, are calculated based on regulatory guidance related to the measurement of capital and risk-weighted assets. BB&T reevaluated its process related to calculating risk-weighted assets and determined that certain adjustments, primarily related to the presentation of certain unfunded lending commitments, were required in order to conform to regulatory guidance. These adjustments resulted in an increase to risk-weighted assets and a decrease in BB&T's risk-based capital ratios.

		December 31, 2012								December 31, 2011
		Actual Capital				Capital Requirements				Actual Capital				Capital Requirements
		Ratio		Amount		Minimum		Well-Capitalized		Ratio		Amount		Minimum		Well-Capitalized

		(Dollars in millions)
Tier 1 Capital (1):
	BB&T	11.0	%	$	14,373	$	5,244	$	7,866	12.0	%	$	14,913	$	4,980	$	7,470
	Branch Bank	11.6			14,587		5,011		7,516	12.8			15,274		4,759		7,138
Total Capital (1):
	BB&T	13.9			18,204		10,488		13,110	15.1			18,862		9,961		12,451
	Branch Bank	13.4			16,809		10,022		12,527	15.1			17,915		9,517		11,897
Leverage Capital:
	BB&T	8.2			14,373		7,001		8,751	9.0			14,913		6,614		8,267
	Branch Bank	8.6			14,587		5,086		8,476	9.5			15,274		4,801		8,002


(1)	The Company has revised its calculation of risk-weighted assets and adjusted the applicable ratios.

As an approved seller/servicer, Branch Bank is required to maintain minimum levels of shareholders' equity, as specified by various agencies, including the United States Department of Housing and Urban Development, GNMA, FHLMC and FNMA. At December 31, 2012 and 2011, Branch Bank's equity was above all required levels.

At December 31, 2012 and 2011, BB&T had segregated cash deposits totaling $36 million and $20 million, respectively. These deposits relate to monies held for the exclusive benefit of clients, primarily at BB&T's broker/dealer subsidiaries.