Truist Financial Corporation · NYSE:TFC
Truist Financial — BB&T — Q4 2015 Earnings Presentation
31 slides from Truist Financial's earnings presentation, Mar 8, 2016
Slide 1: BB&T First Quarter Investor Presentation
BB&T First Quarter Investor Presentation Daryl N. Bible Chief Financial Officer
Slide 2: Investor Relations Contacts
2 2 Investor Relations Contacts
Slide 3: BB&T is…
3 3 BB&T is… ▪ A values - driven highly profitable growth organization. While we have had a very successful merger history, our primary focus is on organic growth; nonetheless, we are well positioned for strategic opportunities. ▪ Our fundamental strategy is to deliver the best value proposition in
Slide 4: BB&T Corporation: A Growing Franchise
4 4 1 Excludes home office deposits 2 Number of branches per state as of August 18, 2015 3 Deposit Market Share data as of September 14, 2015 State # of Branches 2 Deposits 3,4 State Rank 4 North Carolina 1 356 $ 25.7 bn Virginia 359 $ 21.5 bn Florida 326 $ 15.8 bn Pennsylvania 4,5 294 $ 15.7 bn Geo
Slide 5: Premier Model for Community Banking and Diverse Non-Bank Businesses
5 5 28 Banking Regions 1 Local decision - making Centralized support system Foundation for our sales and service culture model … and Diverse Non - Bank Businesses Premier Model for Community Banking… 1 Includes pending region related to National Penn
Slide 6: Diversification Drives Revenue and Productivity
6 6 Diversification Drives Revenue and Productivity **Based on segment revenues, excluding other, treasury and corporate for period ending 12/31/2015 2.09% 1.73% 1.68% Superior Performance… BB&T National Peers Largest 4 Banks Revenue/average assets 10 - year average 2006 - 2015 …With Less Volatility
Slide 7: Record Loans Following Successful Acquisitions
7 7 Record Loans Following Successful Acquisitions 1 ▪ Average loan growth, excluding acquisitions 3 , was 2.0% annualized and 4.5% annualized excluding residential mortgage, vs. 3Q15 ▪ Experienced strong loan growth vs. 3Q15 in several categories (excludes acquisitions): C&I, up 7.8% annualized 3
Slide 8: Portfolio De-Risking and Re-positioning Largely Complete
8 8 Portfolio De - Risking and Re - positioning Largely Complete Source: Y - 9C via SNL, RMO Analytics and Business Intelligence. Excludes loans held for sale. BB&T Loan Portfolio Mix Improvement Over Time Consumer Real Estate Composition Over Time ▪ Less dependent on higher - risk portfolios Redu
Slide 9: Improved Deposit Mix and Cost
9 9 Improved Deposit Mix and Cost $130.3 $129.5 $131.9 $143.8 $ 148.5 0.25% 0.25% 0.24% 0.24% 0.24% 0.20% 0.25% 0.30% 0.35% 0.40% $105.0 $115.0 $125.0 $135.0 $145.0 $155.0 4Q14 1Q15 2Q15 3Q15 4Q15 Total Interest-Bearing Deposit Cost ▪ Average total deposits grew $4.7 billion, or 12.8% annualized ▪ E
Slide 10: Credit Quality Remains Excellent
10 10 Credit Quality Remains Excellent 1,2 ▪ Loans 90 days or more past due and still accruing decreased $69 million vs. 3Q15 ▪ Loans 30 - 89 days increased 13.5% vs. 3Q15 Reflects conversion of Susquehanna mortgage portfolio to MBA methodology ▪ Management expects 1Q16 net charge - offs to be in
Slide 11: Allowance Coverage Ratios Remain Strong
11 11 Allowance Coverage Ratios Remain Strong 3.21x 3.60x 3.71x 3.44x 2.83x 2.39x 2.45x 2.55x 2.49x 2.53x 1.00 2.00 3.00 4.00 4Q14 1Q15 2Q15 3Q15 4Q15 ALLL to Net Charge-offs ALLL to NPLs HFI ▪ Coverage ratios remain healthy at 2.83x and 2.53x for the allowance to net charge - offs and NPLs, respect
Slide 12: Net Interest Margin Expected to Increase
12 12 Net Interest Margin Expected to Increase 3.36% 3.33% 3.27% 3.35% 3.35% 3.20% 3.18% 3.16% 3.15% 3.12% 3.02% 2.99% 2.98% 2.95% 2.96% 2.75% 3.00% 3.25% 3.50% 4Q14 1Q15 2Q15 3Q15 4Q15 Reported NIM Core NIM Peers ▪ 4Q15 NIM stable at 3.35% as a result of: Purchase accounting impact (+3 bps) Imp
Slide 13: Fee Income Increases 10.8%
13 13 Fee Income Increases 10.8% ▪ Insurance income increased $26 million vs. 3Q15 primarily due to seasonality Decline vs. 4Q14 results from American Coastal sale ▪ Investment banking and brokerage fees and commissions decreased $14 million due to higher capital markets activity in the prior quar
Slide 14: Strategically Compelling Acquisition of Swett & Crawford
14 14 Strategically Compelling Acquisition of Swett & Crawford ▪ BB&T is acquiring CGSC North America Holdings Corporation (“Swett & Crawford”) from Cooper Gay Swett & Crawford Ltd. Swett & Crawford is one of the most respected wholesale insurance brokers in the U.S. Transaction excludes Swett &
Slide 15: BB&T Insurance Overview
15 15 BB&T Insurance Overview ▪ CRC Insurance Services, Inc . – 46 locations offering wholesale brokerage and managing general agency services Swett & Crawford – 35 locations offering wholesale brokerage and managing general agency services ▪ BB&T Insurance Services, Inc. – Over 100 retail insuran
Slide 16: BB&T Insurance Pro Forma Revenue by Company
16 16 BB&T Insurance Pro Forma Revenue by Company BB&T Insurance Revenue Profile Source: Company filings. 2015 Pro Forma Total Revenue: $1.8 billion 2015 Total Revenue: $1.6 billion BB&T Insurance Revenue by Company CRC / Swett & Crawford 37% BB&T Insurance Services 25% McGriff 15% AmRisc 7% Crump L
Slide 17: Noninterest Expense Reflects Acquisitions
17 17 Noninterest Expense Reflects Acquisitions 4Q15 4Q15 v. 3Q15 2 Increase (Decrease) 4Q15 v. 4Q14 Increase (Decrease) Personnel expense $ 893 4.9 % 12.5 % Occupancy and equipment expense 192 19.5 14.3 Software expense 52 15.9 15.6 Loan - related expense 37 (10.4) (47.9) Outside IT services 41 68
Slide 18: Committed to Achieving Cost Savings Goals
18 18 Committed to Achieving Cost Savings Goals 2015 4Q16 56% - 57% Efficiency $160 million 58.9% Efficiency $65 million related to Susquehanna related to National Penn * The above graph assumes no increase in interest rates. Efficiency reflects “cash” efficiency consistent with SNL’s definit ion .
Slide 19: Capital and Liquidity Strength
19 19 Capital and Liquidity Strength 10.6% 10.5% 10.4% 10.1% 10.2% 9.0% 9.5% 10.0% 10.5% 11.0% 4Q14 1Q15 2Q15 3Q15 4Q15 ▪ The common equity tier 1 ratio was 10.0% on a fully phased in basis. ▪ BB&T’s 4Q15 LCR was 130% driven by strong deposit growth and the acquisitions ▪ BB&T’s 4Q15 liquid asset bu
Slide 20: Strong Funding and Liquidity
20 20 Strong Funding and Liquidity ▪ Parent – Sources of Liquidity Cash on Deposit at Bank = $7.5 billion Annual Expected Dividends from Bank = $1.8 billion ▪ Parent – Uses of Liquidity Annual Debt Service and Retirements = $1.9 b illion Annual Preferred Dividends = $148 million Annual Com
Slide 21: Among the Lowest Debt Costs
21 21 Among the Lowest Debt Costs $27.2 $27.2 $27.8 $27.0 $26.2 $23.8 $24.7 $23.7 $25.7 $25.5 $17.4 $17.7 $18.0 $17.1 $19.0 $0 $20 $40 $60 $80 4Q14 1Q15 2Q15 3Q15 4Q15 Borrowing Capacity at Discount Window Securities Available and Eligible as Collateral FHLB Borrowing Available Capacity $68.4 $69.6
Slide 22: Why U?
22 22 Why U? ▪ Personalize the platform user interface ▪ Schedule appointments online ▪ Turn off/on check card ▪ Capture paper and electronic receipts and store them for up to 2 years ▪ Person - to - Person payments ▪ Aggregate account balances and transaction details from other banks ▪ Easily set u
Slide 23: Among the Highest Rated Banks
23 23 Among the Highest Rated Banks ▪ BB&T has a strong risk profile A track record of forgoing excessive growth in overheated markets BB&T has not been active in the leveraged loan market BB&T performs very well in forward - looking stress tests BB&T’s capital position is resilient under st
Slide 24: Culture Matters – Values Are Consistent and Important
24 24 Value System Revenues Superior Shareholder Long - term Returns Value System Attract / Train and Retain the Right People Perfect Client Experience Culture Matters – Values Are Consistent and Important
Slide 25: BB&T – Since 1872
25 25 BB&T – Since 1872 ▪ Strong diversification in revenue, geography, products, and loan portfolios ▪ Premier community banking model with diverse national businesses ▪ Growing capital markets and corporate banking capabilities ▪ Accelerating growth for risk/return advantaged lending platforms ▪ M
Slide 26: Appendix
BB&T Appendix
Slide 27: Non-GAAP Reconciliations
Non - GAAP Reconciliations 1 28 1 BB&T’s management uses these measures in their analysis of the Corporation’s performance and believes these measures pro vide a greater understanding of ongoing operations and enhance comparability of results with prior periods, as well as demonstrating the effects
Slide 28: Non-GAAP Reconciliations
Non - GAAP Reconciliations 1 Quarter Ended Reported net interest margin vs. core net interest margin Dec. 31 2015 Sept. 30 2015 June 30 2015 March 31 2015 Dec. 31 2014 Reported net interest margin - GAAP 3.35% 3.35% 3.27% 3.33% 3.36% Adjustments to interest income for assets acquired: Effect of secu
Slide 29: Non-GAAP Reconciliations
Non - GAAP Reconciliations 1 30 1 BB&T’s management uses these measures in their analysis of the Corporation’s performance and believes these measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods, as well as demonstrating the effects o
Slide 30: Non-GAAP Reconciliations
Non - GAAP Reconciliations 1 31 1 BB&T’s management uses these measures in their analysis of the Corporation’s performance and believes these measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods, as well as demonstrating the effects o
Slide 31: Non-GAAP Reconciliations
Quarter Ended Charge - offs Dec. 31 2015 Charge - offs (reported) 0.38% Less subprime auto (Regional Acceptance) (0.19) Adjusted charge - offs 0.19% Non - GAAP Reconciliations 1 32