Truist Financial Corporation · NYSE:TFC
Truist Financial — BB&T — Q1 2013 Earnings Presentation
31 slides from Truist Financial's earnings presentation, Apr 18, 2013
Slide 1: First Quarter 2013 Earnings Conference Call
Sharing Knowledge fora Brighter Direction First Quarter 2013 Earnings Conference Call April 18, 2013 Kelly S. King Chairman and Chief Executive Officer Daryl N. Bible Chief Financial Officer
Slide 2: Non-GAAP Information
2 Non - GAAP Information This presentation contains financial information and performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”) . BB&T’s management uses these “non - GAAP” measures in their analy
Slide 3: 2013 First Quarter Performance Highlights
3 2013 First Quarter Performance Highlights 1 1 Linked quarter growth rates are annualized, except for credit metrics 2 Available to common shareholders. The amounts presented excluding the tax adjustment are non - GAAP measures. See the reconcilia tion included in the attached Appendix 3 Fully taxa
Slide 4: Diverse Sources of Revenue
Diverse Sources of Revenue 4 Revenue Growth through the Cycle 2 2012 vs. 2007 31.8% 7.4% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% BB&T Peer Median 1 Based on segment revenues, excluding other, treasury and corporate for 1Q13. 2 Adjusted for large acquisitions (BB&T/ Colonial/ BankAllantic /Cru
Slide 5: Loan Growth Outlook
5 Loan Growth Outlook $107.5 $109.2 $112.7 $113.6 $113.2 $100 $105 $110 $115 1Q12 2Q12 3Q12 4Q12 1Q13 Average Loans Held for Investment ($ in billions) » Excluding 4Q12 reclass 2 , C&I loans increased 4.5% and CRE - Other was down 4.7% » Despite challenging market conditions, EOP loans HFI were appr
Slide 6: Improved Deposit Mix and Cost
6 Improved Deposit Mix and Cost » Strong organic growth in noninterest - bearing deposits, up 8.5% vs. 4Q12 » Grew net new retail accounts in 1Q13 » Successfully reduced interest - bearing deposit cost to 36 bps during 1Q13 and management expects deposit cost to move below 30 bps in 2013 » Managemen
Slide 7: 2013 Initiatives
2013 Initiatives » Expand corporate banking in key national markets with continued expansion of vertical lending teams » Expand advisor capacity of wealth management and the broker - dealer in targeted markets » Fully realize Crump life insurance opportunities through Institutional sales initiative
Slide 8: Broad-based Credit Improvement
1.33% 1.09% 0.97% 0.85% 0.80% 0.70% 0.80% 0.90% 1.00% 1.10% 1.20% 1.30% 1.40% 1Q12 2Q12 3Q12 4Q12 1Q13 Total Nonperforming Assets as a Percentage of Total Assets 8 Broad - based Credit Improvement 1 » 8.0% reduction in NPAs vs. 4Q12 □ Commercial NPLs down 8.0% □ Lowest NPAs since 2Q08 » Foreclosed r
Slide 9: Broad-based Credit Improvement (Delinquencies and ALLL)
9 » Delinquency rates improved across the board with 30 - 89 days at 0.83% and 90 days and greater at 0.12% of total loans and leases Broad - based Credit Improvement 1 1 Excludes covered assets. 2 Excludes mortgage loans past due that are government guaranteed, and mortgage loans guaranteed by GNMA
Slide 10: Margin Remains Strong
3.93% 3.95% 3.94% 3.84% 3.76% 3.41% 3.45% 3.51% 3.42% 3.43% 3.00% 3.50% 4.00% 4.50% 1Q12 2Q12 3Q12 4Q12 1Q13 Net Interest Margin Reported NIM Core NIM 1 10 Margin Remains Strong » Margin expected to decline approximately 10 bps in 2Q13 driven by: □ Lower rates on new earning assets □ Runoff of cover
Slide 11: Fee Income Growth
11 Fee Income Growth 41.0% 42.4% 42.4% 44.1% 42.9% 32.0% 36.0% 40.0% 44.0% 48.0% 1Q12 2Q12 3Q12 4Q12 1Q13 Fee Income Ratio 1 1 Excludes securities gains (losses), the impact of FDIC loss share accounting and other selected items. See non - GAAP reconciliat ions included in the attached Appendix. 2 L
Slide 12: Noninterest Expense and Efficiency
12 Noninterest Expense and Efficiency 1Q13 1Q13 v. 4Q12 2 Increase (Decrease) 1Q13 v. 1Q12 Increase (Decrease) Personnel expense $ 817 (3.0)% 11.9% Occupancy and equipment expense 171 (2.4) 11.8 Loan - related expense 58 (83.3) (7.9) Foreclosed property expense 18 NM (80.4) Regulatory charges 35 - (
Slide 13: Capital Strength
13 Capital Strength 1 9.4% 9.1% 8.9% 9.1% 9.2% 8.0% 9.0% 10.0% 1Q12 2Q12 3Q12 4Q12 1Q13 Basel I Tier 1 Common Ratio 3 1 Regulatory capital information is preliminary. Risk - weighted assets are determined based on regulatory capital requirements. Un der the regulatory framework for determining risk
Slide 14: Community Banking Segment
14 Community Banking Segment Comments 4 Highlighted Metrics 1Q13 1Q12 ($ in millions) Inc/(Dec) 4Q12 Inc/(Dec) 1Q12 1Q13 ($ in billions) Net Interest Income Noninterest Income 1 Loan Loss Provision Noninterest Expense 2 Income Tax Expense Segment Net Income $ (33) (22) (50) (34) 11 $ 18 $ (32) 19 (1
Slide 15: Residential Mortgage Banking Segment
15 Net Interest Income Noninterest Income 1 Loan Loss Provision Noninterest Expense 2 Income Tax Expense Segment Net Income Retail Originations Correspondent Purchases Total Production Loan Sales Loans Serviced for others (EOP) 30+ Days Delinquent (HFI only) % Non - Accrual (HFI only) Net Charge - O
Slide 16: Dealer Financial Services Segment
Highlighted Metrics 16 Net Interest Income Noninterest Income 1 Loan Loss Provision Noninterest Expense 2 Income Tax Expense Segment Net Income Primarily originates indirect to consumers on a prime and nonprime basis for the purchase of automobiles and other vehicles through approved dealers both in
Slide 17: Specialized Lending Segment
Highlighted Metrics 17 Specialized Lending Segment Provides specialty lending including: commercial finance, mortgage warehouse lending, tax - exempt governmental finance, equipment leasing, commercial mortgage banking, insurance premium finance, dealer - based equipment financing, and direct consum
Slide 18: Insurance Segment
18 1 Noninterest Income includes intersegment net referral fees. 2 Noninterest Expense includes amortization of intangibles and allocated corporate expense. 3 Current quarter over first three months of prior year. Insurance Segment Comments Net Interest Income Noninterest Income 1 Loan Loss Provisio
Slide 19: Financial Services Segment
Highlighted Metrics 19 Financial Services Segment Comments Average Loan Balances Average Deposits Total Assets Invested Operating Margin Provides trust services, wealth management, investment counseling, asset management, estate planning, employee benefits, corporate banking, and capital market serv
Slide 20: Sharing Knowledge for a Brighter Direction
Sharing Knowledge fora Brighter Direction
Slide 21: Appendix
Appendix
Slide 22: Capital Measures
22 Capital Measures 1 (Dollars in millions, except per share data) As of / Quarter Ended March 31 2013 Dec 31 2012 Sept 30 2012 June 30 2012 March 31 2012 Selected Capital Information Risk - based capital Tier 1 $ 14,432 $ 14,373 $ 13,593 $ 12,383 $ 15,207 Total 18,300 18,243 17,638 16,527 19,438 Ri
Slide 23: Non-GAAP Reconciliations
23 Non - GAAP Reconciliations (Dollars in millions, except per share data) As of / Quarter Ended March 31 2013 Dec 31 2012 Sept 30 2012 June 30 2012 March 31 2012 Calculations of Tier 1 common equity and tangible assets and related measures: Tier 1 equity $14,432 $ 14,373 $ 13,593 $ 12,383 $ 15,207
Slide 24: Non-GAAP Reconciliations: Basel III Estimates
Non - GAAP Reconciliations Basel III Estimates Based on Proposed U.S. Rules (Dollars in millions) March 31 2013 Tier 1 common equity under Basel I definition $ 12,316 Adjustments: Other comprehensive income related to AFS securities, defined benefit pension and other postretirement employee benefit
Slide 25: Non-GAAP Reconciliations: Asset Quality Ratios incl. Covered
25 Non - GAAP Reconciliations Applicable ratios are annualized. 1 Excludes mortgage loans guaranteed by GNMA that BB&T does not have the obligation to repurchase. 2 Excludes mortgage loans guaranteed by the government. As of / Quarter Ended March 31 2013 Dec 31 2012 Sept 30 2012 June 30 2012 March 3
Slide 26: Non-GAAP Reconciliations: Asset Quality Ratios excl. Covered
26 Non - GAAP Reconciliations Applicable ratios are annualized. 1 Excludes mortgage loans guaranteed by GNMA that BB&T does not have the obligation to repurchase. 2 Excludes mortgage loans guaranteed by the government. As of / Quarter Ended March 31 2013 Dec 31 2012 Sept 30 2012 June 30 2012 March 3
Slide 27: Non-GAAP Reconciliations: Efficiency and Fee Income Ratios
27 Non - GAAP Reconciliations Quarter Ended Efficiency and Fee Income Ratios March 31 2013 Dec 31 2012 Sept 30 2012 June 30 2012 March 31 2012 Efficiency ratio – GAAP 57.5% 58.8 % 61.6 % 57.9 % 59.0 % Effect of securities gains (losses), net 0.5 - - - (0.2) Effect of merger - related and restructuri
Slide 28: Non-GAAP Reconciliations: Return on Tangible Common Equity
28 Non - GAAP Reconciliations (Dollars in millions) Quarter Ended March 31 Dec 31 Sept 30 June 30 March 31 Return on Average Tangible Common Shareholders' Equity 2013 2012 2012 2012 2012 Net income available to common shareholders $ 210 $ 506 $ 469 $ 510 $ 431 Plus: Amortization of intangibles, net
Slide 29: Non-GAAP Reconciliations: Net Interest Margin
29 Non - GAAP Reconciliations Quarter Ended Reported net interest margin vs. core net interest margin March 31 2013 Dec 31 2012 Sept 30 2012 June 30 2012 March 31 2012 Reported net interest margin - GAAP 3.76 % 3.84 % 3.94 % 3.95 % 3.93 % Adjustments to net interest income for covered assets: Effect
Slide 30: Non-GAAP Reconciliations: Net Income and Diluted EPS
30 Non - GAAP Reconciliations (Dollars in millions, except per share data) Net Income Available to Common Shareholders Quarter Ended March 31, 2013 Net income available to common shareholders - GAAP $ 210 Effect of tax adjustment 281 Net income available to common shareholders – adjusted $ 491 Dilut
Slide 31: Sharing Knowledge for a Brighter Direction
Sharing Knowledge fora Brighter Direction