Securities

12 Months Ended

Dec. 31, 2011

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:
				December 31, 2011
				Amortized		Gross Unrealized				Fair
				Cost		Gains		Losses		Value
				(Dollars in millions)
	Securities available for sale:
		U.S. government-sponsored entities (“GSE”)		$	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
				December 31, 2011
				Amortized		Gross Unrealized				Fair
				Cost		Gains		Losses		Value
				(Dollars in millions)
	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

			December 31, 2010
			Amortized		Gross Unrealized				Fair
			Cost		Gains		Losses		Value
			(Dollars in millions)
Securities available for sale:
	GSE securities		$	102	$	1	$	—	$	103
	Mortgage-backed securities issued by GSE			18,663		42		361		18,344
	States and political subdivisions			2,051		19		161		1,909
	Non-agency mortgage-backed securities			635		—		120		515
	Other securities			734		27		2		759
	Covered securities			1,234		307		2		1,539
		Total securities available for sale	$	23,419	$	396	$	646	$	23,169

During the first quarter of 2011, BB&T reclassified approximately $8.3 billion of securities available forsale to securities held to maturity. Management determined that it had both the positive intent and ability to holdthese securities to maturity. The reclassification of these securities was accounted for at fair value. On the date oftransfer, the difference between the par value and the fair value of these securities resulted in a premium ordiscount that is amortized as a yield adjustment to interest income and is amortized over the remaining life of the securities as a yield adjustment to interest income using the interestmethod. There were no gains or lossesrecognized as a result of this transfer.

As of December 31, 2011, the fair value of covered securities included $1.3 billion of non-agency mortgage-backedsecurities and $326 million of municipal securities. As of December 31, 2010, the fair value of coveredsecurities included $1.2 billion of non-agency mortgage-backed securities and $304 million of municipalsecurities. All covered securities were acquired from Colonial Bank (“Colonial”) and are covered by one of theFDIC loss sharing agreements. BB&T is restricted from selling thesesecurities without prior approval from the FDIC.

At December 31, 2011and 2010, securities with carrying values of approximately $15.5 billionand $19.3 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 and Freddie Mac that exceeded ten percent of shareholders' equity at December 31, 2011. The Fannie Maeinvestments had total amortized cost and fair value of $10.3 billionat December 31, 2011, while Freddie Mac investments had total amortized cost and fair values of $10.2billion and $10.3 billion, respectively. These securities are carried at amortized cost in the held to maturity portfolio or fair value in the available for sale portfolio.

At December 31, 2011and 2010, non-agency mortgage-backed securities primarily consisted ofresidential mortgage-backed securities.

The gross realized gains and losses and other-than-temporary impairments recognized in income during the years ended December 31, 2011, 2010 and 2009 are reflected in the following table:
					Years Ended December 31,
						2011		2010		2009
					(Dollars in millions)
	Gross gains				$	175	$	607	$	241
	Gross losses					(1)		(22)		(1)
		Net realized gains (losses)				174		585		240
	OTTI recognized on non-agency mortgage-backed securities:
		OTTI on non-agency mortgage-backed securities				(22)		(117)		(133)
		Non-credit portion recognized in other comprehensive income (1)				(90)		86		131
			OTTI on non-agency mortgage-backed securities recognized in net income			(112)		(31)		(2)
			OTTI on equity and other securities recognized in net income			―		―		(39)
				Total OTTI recognized in net income		(112)		(31)		(41)
	Net securities gains (losses)				$	62	$	554	$	199
(1)	A negative balance is the result of additional credit losses currently recognized in earnings that were previously recognized in other comprehensive income.

The following table reflects activity during the years ended December 31, 2011 and 2010 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:
				Years Ended December 31,
					2011		2010
				(Dollars in millions)
	Balance at beginning of period			$	30	$	2
		Credit losses on securities not previously considered other-than-temporarily
			impaired		1		3
		Credit losses on securities for which OTTI was previously recognized			111		28
		Reductions for securities sold/settled during the period			(13)		(3)
	Balance at end of period			$	129	$	30

The amortized cost and estimated fair value of the debt securities portfolio at December 31, 2011, 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 call or prepay the underlyingmortgage loans with or without call or 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.

			December 31, 2011
			Available for Sale				Held to Maturity
			Amortized		Fair		Amortized		Fair
			Cost		Value		Cost		Value
			(Dollars in millions)
Due in one year or less			$	181	$	181	$	―	$	―
Due after one year through five years				150		152		―		―
Due after five years through ten years				618		653		500		500
Due after ten years				20,937		21,321		13,594		13,598
	Total debt securities			21,886		22,307		14,094		14,098
	Total securities with no stated maturity			6		6		―		―
		Total securities	$	21,892	$	22,313	$	14,094	$	14,098

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, at the dates presented:
				December 31, 2011
				Less than 12 months				12 months or more				Total
				Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
				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			453		68		265		77		718		145
		Non-agency mortgage-backed securities			—		—		368		55		368		55
		Covered securities			29		6		—		—		29		6
			Total	$	3,604	$	81	$	633	$	132	$	4,237	$	213
				December 31, 2011
				Less than 12 months				12 months or more				Total
				Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
				Value		Losses		Value		Losses		Value		Losses
				(Dollars in millions)
	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

			December 31, 2010
			Less than 12 months				12 months or more				Total
			Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
			Value		Losses		Value		Losses		Value		Losses
			(Dollars in millions)
Securities available for sale:
	GSE securities		$	50	$	—	$	—	$	—	$	50	$	—
	Mortgage-backed securities issued by GSE			15,438		361		—		—		15,438		361
	States and political subdivisions			694		21		735		140		1,429		161
	Non-agency mortgage-backed securities			—		—		506		120		506		120
	Other securities			535		2		2		—		537		2
	Covered securities			79		2		—		—		79		2
		Total	$	16,796	$	386	$	1,243	$	260	$	18,039	$	646

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 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. During 2011, OTTI recognition was due primarily to trends in the underlying loan delinquencies and related collateral home price indices.

During 2011, BB&T realized principal losses on certain other-than-temporarily impaired securities. These realized losses were a factor in evaluating the level of OTTI necessary to address future projected losses.

AtDecember 31, 2011, BB&T held certain investment securities having continuous unrealizedloss positions for more than 12 months. The vast majority of these losses were in non-agency mortgage-backed and municipalsecurities. At December 31, 2011, all of the available-for-sale debt securities in an unrealized loss position for more than 12 months,excluding those covered by FDIC loss sharing agreements, were investment grade with the exception of twomunicipal bonds with an amortized cost of $8 million and ten non-agency mortgage-backed securities with an adjustedamortized cost of $423million.

All of the non-investment grade securities referenced above were initially investmentgrade and have been downgraded since purchase. Based on its evaluation at December 31, 2011, BB&T determinedthat certain of the non-investment grade non-agency mortgage-backed securities had credit losses evident andrecognized OTTI related to these securities. At December 31, 2011, the total unrealized loss on these non-investment grade securities was $55 million.

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:

		December 31, 2011
				Cumulative
		Amortized		Credit Loss		Adjusted		Fair		Unrealized
		Cost		Recognized		Amortized Cost		Value		Loss
				(Dollars in millions)
Security:
	RMBS 1	$	133	$	(34)	$	99	$	88	$	(11)
	RMBS 2		102		(16)		86		73		(13)

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.