Income Taxes

6 Months Ended

Jun. 30, 2011

Income Taxes

Income Taxes

NOTE 11. Income Taxes

BB&T's provision for income taxes was $91 million and $25 million for the three months ended June 30, 2011 and 2010, respectively. The provision for income taxes was $144 million and $73 million for the six months ended June 30, 2011 and 2010, respectively. The effective tax rates for the three months ended June 30, 2011 and 2010 were 21.8% and 10.0%, respectively. The effective tax rates for the six months ended June 30, 2011 and 2010 were 20.4% and 14.9%, respectively. The higher effective tax rates for the three and six months ended June 30, 2011 compared to 2010 are primarily due to higher levels of pre-tax income, which is subject to the marginal tax rate.

In February 2010, BB&T received an IRS statutory notice of deficiency for tax years 2002-2007 asserting a liability for taxes, penalties and interest of approximately $892 million related to the disallowance of foreign tax credits and other deductions claimed by a deconsolidated subsidiary in connection with a financing transaction. Management has consulted with outside counsel and continues to believe that BB&T's treatment of this transaction was in compliance with applicable tax laws and regulations. BB&T paid the disputed tax, penalties and interest, and filed a lawsuit seeking a refund in the U.S. Court of Federal Claims in March 2010. Management believes the Company's current reserves for this matter are adequate, although the final outcome is uncertain. Final resolution of this matter is not expected to occur within the next twelve months.