Truist Financial Corporation · NYSE:TFC
Truist Financial — BB&T — Shareholder Meeting (April 2009)
59 slides from Truist Financial's shareholder meeting presentation, Apr 29, 2009
Slide 1: Annual Shareholders Meeting
Annual Shareholders Meeting April 28, 2009
Slide 2: Forward-Looking Information
Forward -Looking Information This presentation contains certain forward-looking statements with respect to the financial condition, results of operations and businesses of BB&T. These forward-looking statements involve certain risks and uncertainties and are based on the beliefs and assumptions of t
Slide 3: Non-GAAP Information
Non-GAAP Information This presentation contains financial information 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 analysis of the Corporation’s perfor
Slide 4: Comments Regarding Disclosure
Comments Regarding Disclosure BB&T Corporation does not provide earnings guidance, but does discuss trends regarding the factors that influence potential future performance in both its quarterly earnings release and its quarterly earnings conference call. Subsequent to the discussion of such informa
Slide 5: BB&T is …
BB&T is … A value-driven highly profitable • growth organization. During the 90’s and the first part of this decade, our growth came largely from mergers as the economics of combinations were compelling. Recently, our focus has been more on organic growth. Our over-arching purpose is to • achieve ou
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Slide 7: Primary Market Segments
Primary Market Segments 50% Retail / 50% Commercial • Small Business • Wealth Mgt / Private Banking • Commercial Middle Market • Investment Services • Real Estate Lending • Asset Management • Retail • Capital Markets • Home Equity • Venture Capital • Sales Finance • Consumer Finance • Home Mortgage
Slide 8: BB&T Market Coverage
on March 31, 2009 @ Headquarters O BB&T Community BB&T Market Coverage o Sune Primary Non-Bank Businesses HB AFCO/CAFO/Prime Rate L_] Capital Markets Hi Commercial Finance _lcps [J Equipment Finance i Governmental Finance BANKING OFFICES ° % of Market BB&T's State Branches Share’ Deposits Virginia?
Slide 9: Significant Accomplishments
Significant Accomplishments through 12/31/08 • Superior Relative Performance • Fee Income 10.3% • Total Loans 8.2% • Total Deposits 6.4% • Effective Expense Control • Asset Quality Better Than Peers Net New Transaction Accounts • (94,000) 8
Slide 10: Significant Accomplishments
Significant Accomplishments through 12/31/08 • Reduced Employee Turnover from 19.2% to 15.0% • 5+ Households 34.4% • Online Banking +21% (3,004,620 Clients) • Opened 30 DeNovo locations • Successful 1872) advertising campaign (Best Bank In Town Since • Maintained superior service quality • Excellent
Slide 11: Significant Accomplishments
Significant Accomplishments Successful Acquisitions: • Ott & Company • Ramsey Title Group • Burkey Risk Services • Savannah Reinsurance Underwriting Management LLC • Premier Benefits Group • UnionBanc Insurance Services, Inc. • Puckett, Sheetz & Hogan • Southern Risk Holdings, Inc. • Commercial Titl
Slide 12: Challenges and Opportunities
Challenges and Opportunities • Residential Real Estate Downturn: Core Business for BB&T • Unprecedented Market Disruption • Return to Fundamental Banking 11
Slide 13: Financial Strength
Financial Strength ($ in Billions Except for Per Share Information) (Period-end Balances): 2004 2005 2006 2007 2008 Total Assets $ 100.5 $ 109.2 $ 121.4 $ 132.6 $ 152.0 Total Shareholders’ Equity $ 10.9 $ 11.1 $ 11.7 $ 12.6 $ 16.0 BV Per Common Share $ 19.76 $ 20.49 $ 21.69 $ 23.14 $ 23.16 Tangible
Slide 14: Earnings Power
Earnings Power ($ in Millions Except Per Share Information) Year Ended December 31, 2008) Seven-Year Compound 2002 2003 2004 2005 2006 2007 2008 Growth Rate Interest income $ 4,434 $ 4,287 $ 4,547 $ 5,506 $ 6,893 $ 7,894 $ 7,274 6.0% Interest expense 1,687 1,273 1,199 1,981 3,185 4,014 2,969 3.0 Net
Slide 15: Originally Reported Increase in EPS
Originally Reported Increase1 EPS EPS 1989 10.7% 1999 16.6% 1990 13.9% 2000 13.6% 1991 3.0% 2001 14.3% 1992 12.7% 2002 14.6% 1993 20.1% 2003 0.7% 1994 12.4% 2004 1.4% 1995 5.9% 2005 8.2% 1996 19.2% 2006 5.3% 1997 17.0% 2007 1.0% 1998 19.0% 2008 (21.5)% 1Operating 14
Slide 16: Generating Fee Income and Operating Efficiency
Generating Fee Income and Operating Efficiency 1 For the Period Ended National2 2004 2005 2006 2007 2008 Peers Noninterest Income/ Net Revenue (T/E) 37.8% 39.1% 40.6% 41.3% 40.3% 38.8% Cash Basis Efficiency Ratio 49.7% 50.4% 53.2% 51.6% 51.3% 63.8% Operating Leverage (1.36)% (1.51)% (4.79)% 3.03% 1.
Slide 17: Credit Quality
Credit Quality National* 2004 2005 2006 2007 2008 Peers Net Charge-offs/ Average Loans .36% .30% .27% .38% .89% 1.72% Net Charge-offs without Specialized Lending .24% .19% .14% .21% .69% n/a Nonperforming Assets/ Total Assets .36% .27% .29% .52% 1.34% 1.97% * National Peers: CMA, FITB, HBAN, KEY, M&
Slide 18: Total Assets
Total Assets 15 year growth trend As originally reported 15-year compound annual growth rate 20.6% 17
Slide 19: Operating Earnings As Originally Reported
Operating Earnings As Originally Reported 15 year growth trend As originally reported 15-year compound annual growth rate 19.2% 18
Slide 20: Pre-Tax Pre-Provision Operating Earnings
Pre-Tax Pre-Provision Operating Earnings “Earnings Power” 15 year growth trend As originally reported 15-year compound annual growth rate 22.4% 19
Slide 21: Relative Financial Performance
Relative Financial Performance National BB&T Peers2 Earnings Per Share Growth1 (13.7)% (204.7)% CB ROA 1.11% (.12)% CB ROE 19.30% (2.75)% Non Performing Assets / Total Assets1 1.34% 1.97% 1 GAAP 2 National Peers: CMA, FITB, HBAN, KEY, M&T, M&I, PNC, BPOP, RF, STI, USB and Zions 20
Slide 22: 1st Quarter Highlights
1st Quarter Highlights March 31, 2009 Ü Underlying performance very strong Net income $318 million; EPS $.48; beat market • expectations • Net interest income $1.15 billion, up 12.7% • Continue to benefit from flight to quality • Commercial loans up 11.2% • Excellent low-cost client deposit growth •
Slide 23: 1st Quarter Highlights
1st Quarter Highlights March 31, 2009 Ü Underlying performance very strong • Mortgage revenues up more than 200% • Improved operating efficiency • Cash efficiency improved 100 basis points from last year • Breaks through 50% at 49.8%, important milestone • Positive operating leverage • Earnings powe
Slide 24: 1st Quarter Highlights
1st Quarter Highlights March 31, 2009 Ü Financial Strength • Increased allowance for loan losses to $1.9 billion, or 1.94% of loans and leases; current quarter provision exceeded net charge-offs by $288 million • Industry leading capital – Tier 1 12.1%, TCE 5.7% 23
Slide 25: Recognitions
Recognitions • SBA: 2007 Export Lender of the Year • J.D. Powers Survey: Second Best Small Business Bank • J.D. Powers Survey: #1 Overall in Mortgage Servicing • J.D. Powers Survey: #1 Bank Prime Indirect Lender in Auto Dealer Satisfaction • Greenwich Excellence Award for Distinguished Service and O
Slide 26: Recognitions
Recognitions • Ranked by CRO as one of America’s “100 Best Corporate Citizens” • BB&T Insurance Services Rated 1st in Overall Productivity • BB&T Capital Markets: Best on Street Analysts • 2007 and 2008 Import Factor of the Year: By Factors Chain International - Largest U.S. Import Factor in the Wor
Slide 27: Recognitions
Recognitions • Ranked by Luxury Brand Index #1 Regional Bank for Wealth Management • Ranked by 401kExchange #1 in Client Service ($1-$10 million) • Best Practices Award – Only one of five companies • Scott & Stringfellow/Special Opportunities and Equity Income: Ranked in top 1% for performance by PS
Slide 28: Recognitions
Recognitions • John Allison – Top 4 Finalist Morningstar 2008 CEO of the year • John Allison – NC Chamber Corning Award for Distinguished Citizenship • John Allison – Won Best CEO from Motley Fool for 2008 27
Slide 29: Total Compound Annual Return to Shareholders
Total Compound Annual Return to Shareholders December 31, 2008 BB&T S&P 500 National Peers* 1 Year -4.6% -36.8% -40.7% 3 Year -8.7% -8.3% -24.5% 5 Year -2.4% -2.2% -14.1% 10 Year -0.2% -1.4% -5.4% 15 Year 10.7% 6.4% 5.5% 20 Year 11.2% 8.4% 8.7% * National Peers: CMA, FITB, HBAN, KEY, M&T, M&I, PNC,
Slide 30: Shareholder Return
Shareholder Return Depicts $100 invested at 12/31/95 and held through 12/31/08 with dividends reinvested in the security or index. 29
Slide 31: BB&T Dividend Performance
BB&T Dividend Performance As of / year ended 12/31/08 BB&T S&P 500 • Ten Year Compound Annual Growth Rate 10.9% 5.8% • Dividend Yield 6.8% 3.2% • Paid a cash dividend every year since 1903 • 37th Consecutive year of dividend increases • Annual dividend increase in 2008 5.7% • Mergent Dividend Achiev
Slide 32: The Future
The Future 31
Slide 33: Global Economic Context
Global Economic Context • Improving Global Productivity: More Global Economic Freedom • Global Integration Accelerating • Brutally Competitive • Imbedded Cost of Excessive Regulation in U.S. • Increased Geopolitical Risk / Cost of Risk Control • Volatile / Uncertain • Merciless / Tough • Survival of
Slide 34: Economy 2009
Economy 2009* • Negative growth: Real GDP -1.5% • Low Inflation CPI 0.45% • Negative growth -1.05% • Unemployment (at peak) 9.8% • At 12/31/09: Fed Funds 0.2%; Prime 3.2%; 10 year treasury 2.9% Three years from now are bond markets more likely to be preoccupied by concerns about inflation or deflati
Slide 35: US Economic Framework 5 Year Forecast
US Economic Framework* 5 Year Forecast (2010 – 2014) • Solid real growth: Real GDP to average 2.8% • Moderate Inflation: CPI to average 2.5% • Total annual growth will average 5.3% • Prime rate will range from 5.0% to 7.25% and average 6.5% • At 12/31/14; Fed Funds 4.25%; Prime rate 7.25%; 10 year T
Slide 36: Financial Services Industry
Financial Services Industry Primary forces impacting the industry: (1) Credit, Market, and Operational Risk (2) Intense Competition / Excess Capacity (3) Consolidate / Diversify / Restructure (4) Innovation / Productivity Improvement (5) Regulation / Corporate Governance FINANCIAL SERVICES IS A WORL
Slide 37: Outcome of Financial Industry Trends
Outcome of Financial Industry Trends • In 10 years there will be 10 to 15 or so Financial Services firms which will dominate the industry. There will be some mid- sized and a number of small institutions who will face a difficult competitive environment. • The winners will be those companies with ra
Slide 38: BB&T's Long-Term Strategy
BB&T's Long-Term Strategy 37
Slide 39: Our Goal
Our Goal • Create a high-performance financial services organization that can survive and prosper in a rapidly changing, highly competitive, globally integrated environment • CREATE THE BEST FINANCIAL INSTITUTION POSSIBLE 38
Slide 40: Achieving Our Goal
Achieving Our Goal The key to maximizing our probability of being both independent and prosperous over the long term is to create a superio r Earnings Per Share Growth Rate without sacrificing the fundamental quality and long-term competitiveness of our business, nor taking unreasonable risk. Our ul
Slide 41: BB&T Long-Term Strategy
BB&T Long-Term Strategy Superior -Balanced Performance (1) Client-driven - Have a passion for consistently providing the client with better value through rational innovation and productivity improvement (2) Rational risk taking and exceptional risk management (3) Superior earnings growth (4) Targete
Slide 42: 2009 Key Strategic Objectives
2009 Key Strategic Objectives (1) Effectively Manage Through The Credit Cycle (2) Achieve Superior Revenue Growth (3) Create The Perfect Client Experience (4) Control Cost: Maximize Economic Profit 41
Slide 43: BB&T Culture
BB&T Culture Vision Mission Values 42
Slide 44: BB&T Vision
BB&T Vision To Create the Best Financial Institution Possible “The Best of the Best” 43
Slide 45: BB&T Mission
BB&T Mission TO MAKE THE WORLD A BETTER PLACE TO LIVE BY: Helping our CLIENTS achieve economic success and financial security; Creating a place where our EMPLOYEES can learn, grow and be fulfilled in their work; Making the COMMUNITIES in which we work better places to be; and thereby: Optimizing the
Slide 46: BB&T Values
BB&T Values • Values are practical habits that enable us as individuals to live, be successful and achieve happiness. • For BB&T, our Values enable us to achieve our mission and corporate purpose. • Values must be consistent (non-contradictory). • Values are important!! 45
Slide 47: Happiness
HAPPINESS SELF-ESTEEM SUCCESS VITY
Slide 48: Our Passions
Our Passions TO CREATE THE BEST FINANCIAL INSTITUTION POSSIBLE 47
Slide 49: Our Best Days Are Ahead!
Our Best Days Are Ahead!
Slide 50: Reconciliations of Non-GAAP Financial Measures
Reconciliations of Non-GAAP Financial Measures
Slide 51: Originally Reported Increase in EPS
Originally Reported Increase1 EPS EPS 1989 10.7% 1999 12.3% 1990 13.9% 2000 (11.4)% 1991 3.0% 2001 38.6% 1992 12.7% 2002 28.3% 1993 20.1% 2003 (23.9)% 1994 172.8% 2004 35.3% 1995 (25.8)% 2005 7.1% 1996 56.8% 2006 (6.3)% 1997 9.2% 2007 11.7% 1998 39.0% 2008 (13.7)% 1 GAAP 50
Slide 52: Generating Fee Income and Operating Efficiency
Generating Fee Income and Operating Efficiency1 For the Years Ended December 31, 2004 2005 2006 2007 2008 Noninterest Income as a Percentage of Net Revenue (T/E) Based on Operating Earnings 37.8% 39.1% 40.6% 41.3% 40.3% Effect of other, net (1) - - - - 1.1 Noninterest Income as a Percentage of Net R
Slide 53: Operating Efficiency
Operating Efficiency Annualized Link Quarter 4Q08 vs 3Q08 3Q08 vs 2Q08 2Q08 vs 1Q08 1Q08 vs 4Q07 Revenue Growth 7.38% 3.40% 22.48% 10.49% Effect of other, net (1) (8.64) (6.72) 2.48 7.92 Revenue Growth Based on GAAP (1.26)% (3.32)% 24.96% 18.41% Expense Growth 3.98 1.20 22.13 8.70 Effect of other, n
Slide 54: Operating Earnings Available to Common Shareholders
Operating Earnings Available to Common Shareholders as originally reported (dollars in millions) Operating Earnings Net Income 1993 $ 98 $ 98 1994 237 237 1995 254 178 1996 305 284 1997 409 360 1998 513 502 1999 659 613 2000 875 626 2001 1,100 974 2002 1,318 1,303 2003 1,424 1,065 2004 1,562 1,558 2
Slide 55: Pre-Tax Pre-Provision Operating Earnings
Pre-Tax Pre-Provision Operating Earnings as originally reported (dollars in millions) Operating GAAP 1993 $164 $164 1994 380 380 1995 411 295 1996 505 472 1997 705 637 1998 828 813 1999 1,059 996 2000 1,395 1,033 2001 1,739 1,584 2002 2,093 1,556 2003 2,293 1,865 2004 2,577 2,571 2005 2,716 2,684 20
Slide 56: Earnings Performance
Earnings Performance For the Year Ended December 31, Dollars in Millions 2004 2005 2006 2007 2008 Total Revenues Based on Operating Results 6,666 7,830 9,489 10,668 10,334 Pretax merger-related and restructuring charges - - - - - Other, net (1) - 2 (75 ) - 70 Total Revenues Based on GAAP Results 6,6
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Slide 58: Cash-Basis Results
Cash-Basis Results Quarter Ended Dec. March March 31 2009 31 2008 Sept. 30 2008 June 30 2008 31 2008 Diluted earnings per common share $ .48 $ .51 $ .65 $ .78 $ .78 Effect of amortization of intangibles, net of tax .03 .03 .03 .03 .03 Effect of amortization of mark-to-market adjustments, net of tax
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