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Securities and Exchange Commission
Washington, D.C. 20549
Form 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 1999
Commission file number 1-10853
BB&T Corporation 401(k) Savings Plan
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(Full title of the plan)
BB&T Corporation
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(Name of issuer of securities)
200 West Second Street
Winston-Salem, NC 27101
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(Address of issuer's principal executive offices)
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BB&T Corporation
401(k) Savings Plan
Financial Statements as of December 31, 1999 and 1998
Together with Report of Independent Public Accountants
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Report of Independent Public Accountants
To the BB&T Corporation Retirement Plans Committee:
We have audited the accompanying statements of net assets available for plan
benefits of the BB&T Corporation 401(k) Savings Plan (the Plan) as of December
31, 1999 and 1998, and the related statements of changes in net assets available
for plan benefits for the years ended December 31, 1999 and 1998. These
financial statements and the schedule referred to below are the responsibility
of the Plan's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan as
of December 31, 1999 and 1998, and the changes in net assets available for plan
benefits for the years ended December 31, 1999 and 1998, in conformity with
accounting principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes is presented for purposes of additional analysis and is
not a required part of the basic financial statements but is supplementary
information required by the Department of Labor Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedule has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
Arthur Andersen LLP
Charlotte, North Carolina,
June 23, 2000.
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<TABLE>
BB&T Corporation 401(k) Savings Plan
Statements of Net Assets Available for Plan Benefits
As of December 31, 1999 and 1998
<CAPTION>
1999 1998
---------------- -----------------
<S> <C> <C>
Assets:
Investments at fair value-
Common stock $ 509,641,616 $ 765,771,432
Mutual funds 79,427,352 68,289,775
One-year bank investment contracts 8,773,212 8,357,879
BB&T U.S. Treasury Money Market Fund 19,676,750 16,945,568
617,518,930 859,364,654
Investments at cost - Participant loans 10,167,007 10,038,832
Total investments ---------------- -----------------
627,685,937 869,403,486
Cash 2,788,310 2,044,338
Net assets available for plan benefits ---------------- -----------------
$ 630,474,247 $ 871,447,824
================ =================
The accompanying notes to financial statements
are an integral part of these statements.
</TABLE>
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<TABLE>
BB&T Corporation 401(k) Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits
For the Years Ended December 31, 1999 and 1998
<CAPTION>
1999 1998
-------------- ---------------
<S> <C> <C>
Additions to net assets attributed to:
Investment income (loss)-
Dividends $ 13,896,068 $ 12,785,042
Interest 8,916,173 5,042,809
Net gain (loss) from investment activity (242,030,049) 163,429,491
Total investment income (loss) ---------------- ---------------
(219,217,808) 181,257,342
Contributions-
Employer 17,868,632 14,810,322
Employee 23,259,950 20,843,042
Merged entities (Note 3) 9,714,025 18,511,389
Total contributions ---------------- ---------------
50,842,607 54,164,753
Allocation of 34,046 shares of BB&T common stock during 1998 0 952,190
Total additions (deductions) ---------------- ---------------
(168,375,201) 236,374,285
Deductions from net assets attributed to:
Withdrawals (71,293,385) (74,119,756)
Administrative expenses (1,304,991) (1,384,996)
Allocation of 34,046 shares of BB&T common stock during 1998 0 (952,190)
Leveraged ESOP principal repayment 0 (1,141,235)
Net assets available for plan benefits, beginning of year 871,447,824 712,671,716
Net assets available for plan benefits, end of year ---------------- ---------------
$ 630,474,247 $ 871,447,824
The accompanying notes to financial statements
are an integral part of these statements.
</TABLE>
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BB&T Corporation 401(k) Savings Plan
Notes to Financial Statements
December 31, 1999 and 1998
1. Description of Plan:
The following description of the BB&T Corporation 401(k) Savings Plan (the Plan)
provides only general information. Participants should refer to the plan
agreement for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution plan sponsored by BB&T Corporation (the Bank
or Plan Sponsor). The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974.
The Plan covers all employees who meet age and service requirements. Under the
terms of the Plan, employees are eligible to participate in the Plan at age 21
with one year of continuous employment in which they have worked at least 1,000
hours. Participation in the Plan is based on voluntary election by each
employee.
The Plan offers eight investment options for employee contributions: the BB&T
U.S. Treasury Money Market Fund, the BB&T Intermediate U.S. Government Bond
Fund, the BB&T International Equity Fund, the BB&T Growth and Income Stock Fund,
the BB&T Balanced Fund, the BB&T Small Company Growth Fund, BB&T One-Year Bank
Investment Contracts (which invests in one-year guaranteed income contracts of
the Bank) and the BB&T Common Stock Fund. Each participant may elect to direct
employee and employer contributions to any combination of the funds.
Participants may change their investment elections daily.
Contributions
Contributions to the Plan are made monthly by employees in amounts equal to
whole percentages, from 1% to 16%, of their monthly compensation. The Bank makes
matching contributions of 100% of up to 6% of each participant's compensation
contributed to the Plan. Participants are fully vested in their accounts at all
times.
Participant Loans
The Plan permits a participant to borrow up to 50% of their account balance, not
to exceed $50,000, or $50,000 minus the participant's highest outstanding loan
amount of the prior 12 months. The minimum loan amount is $1,000. Only one loan
can be made during the plan year and a participant may have only one loan
outstanding at any time. The interest rate to be paid on the amounts borrowed is
equal to the Bank's prime lending rate plus 1% at the time of the loan.
Payment of Benefits
Under terms of the Plan, a participant is allowed to withdraw certain funds from
his account twice a year. Upon retirement, a participant may elect to have
distributions paid from this account in installments, a lump sum or any
combination of the two. Retired participants may elect installment payments to
occur over a period not to exceed 15 years, the participant's life expectancy,
or the life expectancy of the participant and beneficiary.
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2
Employee Stock Ownership Plan
The Employee Stock Ownership Plan (ESOP) is a separate fund of the Plan and is
only for the employees of certain acquired institutions. The ESOP initially
purchased common shares using the proceeds of notes payable (see Note 6). The
common shares are maintained in a trust under the Plan and debt repayments were
funded by corporate contributions to the trust. As debt repayments were made,
shares were allocated to eligible employees' accounts in accordance with
applicable regulations under the Internal Revenue Code (IRC). Shares of the
Company's common stock became fully vested upon allocation to participants'
accounts. Final payments on notes payable were made during 1998, and,
accordingly, all remaining unallocated shares were vested.
2. Significant Accounting Policies:
Basis of Accounting
The accompanying financial statements have been prepared on the accrual basis of
accounting in accordance with accounting principles generally accepted in the
United States.
Use of Estimates
The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
certain estimates and assumptions that affect the reported amounts of net assets
available for plan benefits and changes therein and disclosure of contingent
assets and liabilities. Actual results could differ from those estimates.
Reclassification
On September 15, 1999, Statement of Position 99-3 (SOP 99-3), "Accounting for
and Reporting of Certain Defined Contribution Plan Investments and Other
Disclosure Matters" was issued as an amendment to the AICPA Audit and Accounting
Guide - Audits of Employee Benefit Plans. The primary impact of SOP 99-3 was the
elimination of the requirement to disclose participant-directed investment
programs. The Plan has adopted SOP 99-3 for the plan year ended December 31
1999, and thus certain prior year amounts have been reclassified to conform with
the current year presentation.
Investments in Securities
Investments in securities are stated at fair value. The fair value of marketable
securities is based on published quotations obtained from national securities
exchanges. Investments in mutual funds are valued at fair value based on quoted
market prices of the underlying fund securities. Bank investment contracts are
stated at fair value, which do not materially differ from contract value.
The net gain/(loss) from investment activity includes realized and unrealized
gains and losses from investment activity. Unrealized gains/(losses) are
calculated as the difference between the current value of securities as of the
end of the plan year and either the current value at the end of the preceding
year or the actual cost if such investments were purchased during the current
year. Realized gains or losses on sales of investments are calculated as the
difference between sales proceeds and the current value of investments at the
beginning of the year or the actual cost if such investments were purchased
during the year.
Securities transactions are recorded on the trade date. Dividend income is
recorded on the ex-dividend date.
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3
Investments in Participant Loans
Investments in participant loans are stated at cost. Adjustments necessary to
reflect the fair value of the loans would not be material to the financial
statements.
Administrative Expenses
The plan sponsor may elect, but is not required to pay recordkeeping and other
administrative expenses incurred by the Plan. The plan sponsor has elected to
pay certain administrative fees related to professional services provided to the
Plan. Trustee fees consist primarily of administrative services rendered by the
Bank's Trust Division (see Note 8).
3. Merged Plans:
During 1999, the Virginia First Savings Bank 401(k) Plan, the C.M. Harris
Holding Company & Affiliates 401(k) Plan, and the Franklin National Bank 401(k)
Retirement Plan were merged into the Plan. Plan assets approximating $9.7
million were transferred into the Plan as a result of these mergers. During
1998, the Fidelity Federal Savings Bank Retirement Savings Plan, the DeJarnette
& Paul, Inc. 401(k) Profit Sharing Plan, the McPhail, Bray, Murphy, & Allen
Profit Sharing Plan, and the Life Savings Bank Employee Savings & Profit Sharing
Plan were merged into the Plan. Plan assets approximating $18.5 million were
transferred into the Plan as a result of these mergers.
4. Investments:
The Plan's investments are administered by the Bank's Trust Division. The
gain/(loss) from investment activity (including investments bought and sold as
well as held during the year) is as follows:
Net Gain (Loss)
---------------------------------
1999 1998
---------------- ---------------
Common stock $ (241,913,386) $ 159,743,965
Mutual funds (116,663) 3,685,526
---------------- ---------------
$ (242,030,049) $ 163,429,491
================ ===============
At December 31, 1999 and 1998, the fair market value of individual investments
that represent 5% or more of the Plan's total net assets are as follows:
1999 1998
---------------- ---------------
BB&T Corporation common stock $ 509,641,616 $ 765,771,432
BB&T Growth & Income Fund 41,288,537 39,365,998
================ ===============
Included in the BB&T Corporation common stock listed above, at December 31, 1999
and 1998, respectively, are approximately 421,477 and 458,860 shares of the
ESOP's BB&T Corporation common stock which were allocated to the participants'
accounts.
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4
5. Tax Status:
The Internal Revenue Service (IRS) issued a determination letter on September 6,
1996, which stated that the Plan and its underlying trust qualify, in form,
under the applicable provisions of the IRC and therefore are exempt from federal
income taxes. In the opinion of the plan administrator, the Plan and its
underlying trust are currently being operated in compliance with the applicable
requirements of the IRC.
6. Notes Payable:
The ESOP initially purchased common shares using the proceeds of notes payable
(see Note 1). Interest rates on the notes ranged from 7% to 9%, payable
annually. The principal balance for each note was repaid in monthly installments
over the life of the note, with final payments due at various times from July
1996 to November 1998. As final payments were made during 1998, no notes payable
were outstanding as of December 31, 1999 and 1998.
The debt was guaranteed by the Bank and secured by the unallocated shares of
BB&T common stock.
7. Plan Termination:
Although it has not expressed an intent to do so, the Bank has the right to
discontinue its contributions at any time or to terminate the Plan. In the event
of plan termination, the assets would be distributed in accordance with the plan
agreement.
8. Related-party Transactions:
During the years ended December 31, 1999 and 1998, the Plan purchased 1,469,758
and 991,031 shares, respectively, of BB&T common stock at a cost of $51,334,163
and $46,334,775, respectively. In addition, 850,513 and 975,652 shares were
distributed during 1999 and 1998, respectively, to employees who withdrew their
vested interests. The Plan received cash dividends of $13,758,317 and
$12,614,065 on its investment in BB&T Corporation common stock during 1999 and
1998, respectively.
Included in plan assets are mutual funds sponsored by the Bank, guaranteed
income contracts issued by the Bank and cash on deposit at the Bank.
The cost of administrative services rendered by the Bank's Trust Division for
the years ended December 31, 1999 and 1998, was $1,117,264 and $1,204,145,
respectively (see Note 2).
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<TABLE>
BB&T Corporation 401(k) Savings Plan
Schedule H, Line 4i -- Schedule of Assets Held for Investment Purposes
As of December 31, 1999
<CAPTION>
(b)
Identity (c) (d) (e)
(a) of Party Description of Assets Cost Fair Value
--- -------- ----------------------------------------------------------- ------ -------------
<S> <C> <C> <C> <C>
* BB&T U.S. Treasury Money Market Fund - 19,676,750 shares N/A $ 19,676,750
* BB&T Intermediate U.S. Government Bond Fund - 888,695 shares N/A 8,451,491
* BB&T Growth and Income Fund - 2,241,506 shares N/A 41,288,537
* BB&T Common Stock Fund - 18,197,250 shares N/A 498,149,710
* BB&T One-Year Bank Investment Contracts - 8,773,212 shares N/A 8,773,212
* BB&T Balanced Fund - 727,578 shares N/A 9,662,236
* BB&T International Equity Fund - 151,498 shares N/A 2,269,444
* BB&T Small Company Growth Fund - 523,456 shares N/A 17,755,644
* Participant loans, varying maturities, rates ranging from N/A
7.00% to 13.85% 10,167,107
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* Denotes party-in-interest.
The accompanying notes to financial statements
are an integral part of these statements.
</TABLE>
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Trustees and Savings Plan Committee have duly caused this annual report to be
signed on their behalf by the undersigned hereunto duly authorized.
Date: June 23, 2000 BB&T Corporation
401(K) Savings Plan
/s/ Raymond K. MuCulloch
Raymond K. MuCulloch
Executive Vice President
