BBT
#Typically what we do an acquisition obviously everything is mark-to-market.
So you go in with a mark-to-market balance sheet.
But what we always do is we basically take in all the client activity so we take in the client loans, client deposits.
We were very hard to exit out any non-client borrowings except like advances and other opportunities there.
And in the investment portfolio decision is really a decision on whether we need the liquidity or not.
If you don't need securities or liquidity and also helps raise your margin.
There are a lot of things you work with to optimize the whole overall piece so it fits into your total organization.
But we will give you more color next quarter on that.
It's going to be off a smaller base, because you these are smaller earning assets.
There's puts and takes there.
We just had really strong equity deals in the fourth-quarter that in fact strongest in our history.
We had the biggest fourth quarter we could have out of that three deals, so we are just bouncing back from that.
If you look at the core business it is still doing very well, good strong M&A back log.
The retail broker continues ---+ commissions are growing about 9%, so it's really nothing more than we had a strong fourth-quarter.
From a CCAR 2015, <UNK>, if you looked at the dividend request that we had and the buyback and then the four acquisitions that we had embedded in there, we had well over 100% use of our retained earnings over this five quarter period.
So if you look at our common equity tier one call it 10.5 now transition basis it's probably going to end up a little better 10, call it 9.8 give or take 10 basis points, so we're going to use probably use 60 plus basis points of capital over the five quarters.
I know, <UNK>, you are an old CFO finance guy, so you understand all this stuff, but if you look our match funded basis and you look at these assets, these assets have a credit spread that we are putting on the books well north of 100 basis points if you try to actually fund these assets call it 80 basis points.
With the negative convexity you have and if rates eventually do go up, these assets will really start to extend out and it's just a really tough asset to really fund properly over the long term.
I think selling as much as we can out and getting the revenue that we can is the right thing for our Company right now.
All of our other loan businesses are growing really well.
We are able to grow even with this running off, so I think that's positive.
We are stabilizing core margin with basically flat interest rates which is really pretty good in this environment.
<UNK>, you have to keep in mind, too, what <UNK> said is true, but our primary driver in this is diversification.
We're just not going ---+ even if it's 5%, we're just not going to hold assets that are not consistent with our long-term diversification strategy.
So we wanted to bring it down some to get it in ---+ it's not dramatic, but we wanted to bring it down some to get it in line with our diversification plan.
It's a contributor ---+ I think it's one part of it, but the other piece is really the unbelievable strong growth we have gotten in core deposits.
Core deposits, they are strong for the industry.
Our core deposits growth in our community bank and corporate banking has been phenomenal.
If you go back six or seven years ago, the percentage of DDA to our funding was in the mid-teens.
We are now over 30% DDA funded.
That is just a completely different BB&T.
Yes, absolutely.
I think that the best scenario will create the draining of the deposits in the system.
I think it will create an opportunity for these asset investors to chase other assets rather than traditional banking assets.
And all of that will create asset price increases for the banking segment.
The deposit spreads will be challenging during that, but what I personally think is that banks will lag as rates are going up simply because we have given up a lot of deposit yield on things like NSFs and other factors over the last two or three years, we the industry.
So I think all of that will be incorporated into decision-making which will cause a lag on the deposit pricing as we go up.
Good morning.
That's correct.
We basically move a negative income item out and put it in the tax line item.
We also restated 2014 financials, so if you go back and compare numbers versus last quarter you're going to see 2014 change.
This is proportional accounting that we had to do for our tax credit businesses that we run.
That's right, <UNK>.
