These excerpts taken from the BBT 10-K filed Feb 27, 2009.
The Treasury Departments investment in BB&T imposes restrictions and obligations limiting BB&Ts ability to increase dividends, repurchase common stock or preferred stock and access the equity capital markets.
In November 2008, BB&T issued preferred stock and a warrant to purchase common stock to the Treasury Department under the CPP. Prior to November 14, 2011, unless BB&T has redeemed all of the preferred stock, or the Treasury Department has transferred all of the preferred stock to a third party, the consent of the Treasury Department will be required for BB&T to, among other things, increase common stock dividends or effect repurchases of common stock or other preferred stock (with certain exceptions, including the repurchase of BB&T common stock to offset share dilution from equity-based employee compensation awards). BB&T has also granted registration rights to the Treasury Department pursuant to which BB&T has agreed to lock-up periods prior to and following the effective date of an underwritten offering of the preferred stock, the warrant or the underlying common stock held by the Treasury Department, during such time when BB&T would be unable to issue equity securities.
The Treasury Departments investment in BB&T imposes
In November 2008, BB&T issued preferred stock and a warrant to purchase common stock to the Treasury Department under the CPP. Prior to
STYLE="margin-top:0px;margin-bottom:0px">BB&Ts liquidity could be impaired by an inability to access the capital markets or an unforeseen outflow of cash. STYLE="margin-top:0px;margin-bottom:-6px">
Liquidity is essential to BB&Ts businesses. Due to circumstances
SIZE="2">BB&Ts reported financial results depend on managements selection of accounting methods and certain assumptions and estimates.
BB&Ts accounting policies and methods are fundamental to the methods by which the Company records and reports its financial condition and
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%">Certain accounting policies are critical to presenting BB&Ts financial condition and results. They require management to make difficult,
subjective or complex judgments about matters that are uncertain. Materially different amounts could be reported under different conditions or using different assumptions or estimates. These critical accounting policies include: the allowance for
credit losses; the determination of fair value for financial instruments; the valuation of goodwill and other intangible assets; the accounting for pension and postretirement benefits and the accounting for income taxes. Because of the uncertainty
of estimates involved in these matters, the Company may be required to do one or more of the following: significantly increase the allowance for credit losses and/or sustain credit losses that are significantly higher than the reserve provided;
recognize significant impairment on its goodwill and other intangible asset balances; or significantly increase its accrued taxes liability.
STYLE="margin-top:0px;margin-bottom:0px">BB&Ts business could suffer if it fails to attract and retain skilled people.
BB&Ts success depends, in large part, on its ability to attract and retain key people. Competition for the best