Slide 1: First Quarter 2014 Earnings Conference Call
Sharing Knowledge fora Brighter Direction First Quarter 2014 Earnings Conference Call April 17, 2014 Kelly S. King Chairman and Chief Executive Officer Daryl N. Bible Chief Financial Officer
Slide 2: Forward-Looking Information
Forward-Looking Information This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, regarding the financial condition, results of operations, business plans and the future performance of BB&T that are based on the beliefs an
Slide 3: 2014 First Quarter Performance Highlights
33 Earnings Highlights Loans Deposits Credit Quality 5 Revenues Expenses ▪ Net income 2 totaled $501 million vs. $210 million in 1Q13 ▪ Diluted EPS was $0.69, compared with $0.29 in 1Q13 ▪ Average CRE-Income Producing Properties balances grew 10.6% vs. 4Q13 ▪ Average CRE-Construction & Development b
Slide 4: Selected Items Affecting Earnings
44 After Tax Diluted EPS Impact Adjustment to non-controlling interest 1 $ (16) $ (0.02) Merger-related and restructuring charges $ (5) $ (0.01) Selected Items Affecting Earnings($ in millions, except per share impact) 1 Reflects a reallocation of certain partnership profits interests to non-control
Slide 5: Enhanced Lending Strategies Gaining Traction
55 Enhanced Lending Strategies Gaining Traction ▪ Average total loan growth for 2Q14 is expected to be 3% -5% Driven by C&I, CRE-income producing properties, CRE- construction & development, Other Lending Subsidiaries, Sales Finance and Wealth lending Growth in Other Lending Subsidiaries expecte
Slide 6: Improved Deposit Mix and Cost
66 Improved Deposit Mix and Cost $130.4 $130.0 $127.9 $125.9 $125.7 0.36% 0.32% 0.31% 0.28% 0.27% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% $90.0 $100.0 $110.0 $120.0 $130.0 $140.0 1Q13 2Q13 3Q13 4Q13 1Q14 Total Interest-Bearing Deposit Cost Average Deposits ($ in billions) ▪ Strong organic DDA growth of
Slide 7: Core Credit Quality Continues to Improve
77 Core Credit Quality Continues to Improve 1 0.98% 0.75% 0.49% 0.49% 0.47 2 % 0.20% 0.70% 1.20% 1Q13 2Q13 3Q13 4Q13 1Q14 Annualized Net Charge-offs / Average Loans Core Charge-offs Core NCOs Down 51.6% vs. 1Q13 ▪ 1Q14 net charge-offs include an additional $23 million in net charge-offs related to a
Slide 8: ALLL Coverage Ratios Remain Strong
88 ALLL Coverage Ratios Remain Strong 1 ▪ Delinquencies improved during the quarter: 30-89 days past due decreased 14.0% vs. 4Q13 90 days past due decreased 13.9% vs. 4Q13 ▪ The ALLL release was $80 million for 1Q14 compared to $67 million in 4Q13 ▪ Management anticipates declining ALLL releases
Slide 9: Margin Lower Due to Investment Portfolio Growth
99 Margin Lower Due to Investment Portfolio Growth 3.76% 3.70% 3.68% 3.56% 3.52% 3.43% 3.40% 3.39% 3.34% 3.29% 2.75% 3.25% 3.75% 4.25% 1Q13 2Q13 3Q13 4Q13 1Q14 Reported NIM Core NIM ▪ 1Q14 NIM declined 4 bps vs. 4Q13as a result of: Impact of larger investment portfolio to comply with liquidity reg
Slide 10: Fee Income Reflects Seasonality, Mortgage Impact
1010 Fee Income Reflects Seasonality, Mortgage Impact ▪ Insurance income increased $56 million compared to 4Q13 primarily due to higher performance-based commission income, increased commissions on new and renewal business and an improved process for estimating commission income. Management expects
Slide 11: Expenses Decrease 15%
1111 Expenses Decrease 15% 2 ▪ Noninterest expense declined $53 million vs. 4Q13. Management continues to expect positive operating leverage for 2014 to drive down the efficiency ratio. ▪ Personnel expense decreased $45 million vs. 4Q13 due to decreased incentives and commissions and lower estimated
Slide 12: Capital and Liquidity Strength
1212 Capital and Liquidity Strength 1 10.6% 11.1% 11.3% 11.8% 12.1% 9.1% 9.3% 9.4% 9.9% 10.2% 8.5% 9.5% 10.5% 11.5% 12.5% 1Q13 2Q13 3Q13 4Q13 1Q14 Basel I Capital Ratios Tier 1 Tier 1 common ▪ Management will recommend to the Board a quarterly common dividend increase from $0.23 to $0.24 per share l
Slide 13: Community Banking Segment
1313 Community Banking Segment ▪ CRE –Income Producing Properties loans increased $471 million, or 4.8%, compared with 1Q13 and 10.7% annualized compared with 4Q13 ▪ Average dealer floor plan loans increased by $425 million, or 92.5%, compared with 1Q13 and 46.6% annualized compared with 4Q13 ▪ Reta
Slide 14: Residential Mortgage Banking Segment
1414 Residential Mortgage Banking Segment Retains and services mortgage loans originated by the Residential Mortgage Lending Division and through its referral relationship with the Community Bank and referral partners as well as those purchased from various correspondent originators ($ in millions)
Slide 15: Dealer Financial Services Segment
1515 Dealer Financial Services Segment ▪ Dealer Financial Services continued to generate strong loan production driven by increased auto sales and BB&T marketing efforts to dealers ▪ Additional market expansion for Regional Acceptance planned in Connecticut, Oregon, Tennessee, and California during
Slide 16: Specialized Lending Segment
1616 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 consumer finance Comments 4
Slide 17: Insurance Segment
1717 Insurance Segment Comments ($ in millions) Inc/(Dec) 4Q13 Inc/(Dec) 1Q131Q14 Net Interest Income Noninterest Income 1 Loan Loss Provision Noninterest Expense 2 Income Tax Expense Segment Net Income Highlighted Metrics Same Store Sales Growth 3 Noninterest Income Growth Number of Stores 4 EBITDA
Slide 18: Financial Services Segment
1818 Financial Services Segment ▪ Despite narrowing margins negatively impacting net interest income, volume was driven by: Corporate Banking, which generated 17.9% loan growth and 4.7% transaction deposit growth vs. 1Q13 BB&T Wealth, which generated 19.5% loan growth and 11.8% transaction depos
Slide 19: BB&T - Sharing Knowledge for a Brighter Direction
BB&t Sharing Knowledge fora Brighter Direction
Slide 20: Appendix
Appendix
Slide 21: Capital Measures
Capital Measures 1 As of / Quarter Ended (Dollars in millions, except per share data) March 31 2014 Dec. 31 2013 Sept. 30 2013 June 30 2013 March 31 2013 Selected Capital Information Risk-based capital Tier 1 $16,699 $ 16,074 $ 15,606 $ 15,397 $ 14,432 Total 20,154 19,514 19,255 19,193 18,321 Risk-w
Slide 22: Basel III Common Equity Tier 1 Ratio
Basel III Common Equity Tier 1 Ratio 1 (Dollars in millions) March 31 2014 Tier 1 common equity under Basel Idefinition $ 14,096 Adjustments: Other adjustments 96 Common equity Tier 1 under Basel IIIdefinition $ 14,192 Estimated risk-weighted assets under Basel III definition $ 142,258 BaselIII comm
Slide 23: Non-GAAP Reconciliations
Non-GAAP Reconciliations 1 (Dollars in millions, except per share data) As of / Quarter Ended March 31 2014 Dec. 31 2013 Sept. 30 2013 June 30 2013 March 31 2013 Calculations of tangible common equity, Tier 1 common equity, tangible assets and related measures: 3 Total shareholders’ equity $ 23,556
Slide 24: Non-GAAP Reconciliations
Non-GAAP Reconciliations As of / Quarter Ended March 31 2014 Dec. 31 2013 Sept. 30 2013 June 30 2013 March 31 2013 Asset Quality Ratios (including amounts related to covered loans and covered foreclosed property) Loans 30-89 days past due and still accruing as a percentage of total loans and leases
Slide 25: Non-GAAP Reconciliations
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. 3 These asset quality ratios have been adjusted to remove the impact of covered loans
Slide 26: Non-GAAP Reconciliations: Efficiency and Fee Income Ratios
Non-GAAP Reconciliations Quarter Ended Efficiency and Fee Income Ratios March 31 2014 Dec. 31 2013 Sept. 30 2013 June 30 2013 March 31 2013 Efficiency ratio –GAAP 61.2 % 61.1 % 62.4 % 59.9 % 57.5 % Effect of securities gains (losses), net - 0.1 - 0.5 0.5 Effect of merger-related and restructuring ch
Slide 27: Non-GAAP Reconciliations: Return on Tangible Common Equity
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 2014 2013 2013 2013 2013 Net income available to common shareholders $ 501 $ 537 $ 268 $ 547 $ 210 Plus: Amortization of intangibles, net of
Slide 28: Non-GAAP Reconciliations: Net Interest Margin
Non-GAAP Reconciliations Quarter Ended Reported net interest margin vs. core net interest margin March 31 2014 Dec. 31 2013 Sept. 30 2013 June 30 2013 March 31 2013 Reported net interest margin -GAAP 3.52% 3.56 % 3.68 % 3.70% 3.76 % Adjustments to interest income for covered assets: Effect of covere
Slide 29: BB&T - Sharing Knowledge for a Brighter Direction
BB&t Sharing Knowledge fora Brighter Direction