Slide 1: Second Quarter 2011 Earnings Conference Call
Best Bank In Town BB&T Since 1872 Second Quarter 2011 Earnings Conference Call July 21, 2011 Kelly S. King Chairman and Chief Executive Officer Daryl N. Bible Chief Financial Officer Clarke R. Starnes Chief Risk Officer
Slide 2: Forward-Looking Information
Forward-Looking Information This presentation contains forward-looking statements with respect to the financial condition, results of operations and businesses of BB&T. Statements that are not historical or current facts or statements about beliefs and expectations are forward-looking statements. Wo
Slide 3: 2011 Second Quarter Highlights
2011 Second Quarter Highlights 1 46.2% increase in net income2 vs. 2Q10 EPS totaled $0.44, up 46.7% vs. 2Q10 Increase was driven by significantly improved credit quality Revenues totaled $2.2 billion, up 28.0% in 2Q11 vs. 1Q11 BB&T produced positive operating leverage in the second quarter
Slide 4: Balance Sheet and Revenue Highlights
Balance Sheet and Revenue Highlights 2Q11 new production mix 85% C&I / 15% CRE in Trust and investment advisory income increased Community Banking Segment 15.4% compared to 2Q10 Direct Retail posted 2% annualized growth in EOP Revenues in the Wealth Division increased 11.8% loans vs. 1Q11 co
Slide 5: Broad-based Loan Growth
Broad-based Loan Growth Average Loans Held for Investment $110 ($ in billions) Average Loan Growth Highlights1 ($ in millions) $102.3 $102.3 $102.4 $102.6 $102.8 2Q11 vs. 1Q11 2Q11 vs. 1Q11 $100 2Q11 $ Annualized % Average Increase Increase Balance (Decrease) (Decrease) C&I $ 33,647 $ 214 2.6% $90 O
Slide 6: Driving Growth in Lower Cost Deposits
Driving Growth in Lower Cost Deposits Average Client Deposits ($ in billions) $110.0 $103.4 Average Deposit Growth Highlights $102.2 $101.6 $99.9 ($ in millions) $99.4 $100.0 2Q11 vs. 1Q11 2Q11 vs. 1Q11 $90.0 2Q11 $ Annualized % Average Increase Increase Balance (Decrease) (Decrease) $80.0 Nonintere
Slide 7: Credit Improvement Accelerates
Credit Improvement Accelerates 1 9.5% 16.8% Watch list NPLs 11.7% 5.7% Delinquencies2 OREO 10.0% 13.2% Performing TDRs NPAs 24.9% NPA inflows 11.6% Core net charge-offs3 1 Amounts exclude covered assets and government guaranteed loans where applicable. 2 Includes loans past due 30 days or more and s
Slide 8: NPAs Decrease for 5th Consecutive Quarter
NPAs Decrease for 5th Consecutive Quarter Total Nonperforming Assets1 ($ in millions) $4,500 $4,327 Down 13.2%1 reduction in NPAs vs. 1Q11 $4,147 ~ $1 billion vs. 2Q10 Continued successful results in $3,971 $4,000 $3,863 NPA disposition strategy Sold approximately $675 million of nonperforming
Slide 9: Formation of New Problem Assets Declines Significantly
Formation of New Problem Assets Declines Significantly Inflows to Nonaccrual Loans ($ in millions) Inflows Total inflows decreased 24.9% $1,400 Down 47% compared to 1Q11 vs. 2Q10 $1,200 Commercial inflows decreased from $1,000 $703 million in 1Q11 to $528 million $800 in 2Q11, a 24.9% decrease $
Slide 10: Core Charge-offs Decrease Through the 1.50% Level
Core Charge-offs Decrease Through the 1.50% Level 1 Net Charge-offs / Average Loans 3.75% Total core charge-offs decreased 11.6% compared to 1Q11; represents 3.00% 1.74% the lowest level in more than two 2.25% 0.60% 0.08% years 0.34% 1.50% Expect total charge-offs to be in the 2.06% 1.80% 2.07%
Slide 11: Early Credit Indicators Improved
Early Credit Indicators Improved Total Loans Past Due and Still Accruing1 ($ in millions) 9.5% decrease in watch list assets $2,000 $286 $278 $295 on a linked quarter basis $1,500 $263 Total delinquencies declined 11.7% $203 to lowest level in 3 years $1,000 $1,488 $1,638 $1,408 We saw notable
Slide 12: Margin Outlook Improves
Margin Outlook Improves Net Interest Margin 4.20% 4.15% 4.12% Margin is benefiting from more favorable 4.09% 4.10% funding mix, increase in yield on covered 4.04% loans, lower cost of funds and lower 4.00% NPAs 4.01% The increase in net interest income 3.90% related to assets acquired in the Col
Slide 13: Fee Income
Fee Income Ratio1 Fee Income 45.0% 42.3% Noninterest Income 41.8% ($ in millions) 40.8% 40.8% 2Q11 v. 2Q11 v. 40.1% 1Q112 2Q10 40.0% Increase Increase 2Q11 (Decrease) (Decrease) Insurance income $ 299 78.6% 4.2% Service charges on deposits 145 29.7 (11.6) 35.0% Mortgage banking income 83 (50.7) (24.
Slide 14: Noninterest Expenses and Efficiency
Noninterest Expenses and Efficiency 58.0% Efficiency Ratio1 Noninterest Expense ($ in millions) 57.1% 2Q11 v. 2Q11 v. 56.0% 1Q112 2Q10 Increase Increase 55.8% 2Q11 (Decrease) (Decrease) 55.3% Personnel expense $ 683 (6.4)% 5.2% 54.0% 54.1% Foreclosed property expense 145 5.6 (39.6) 53.7% Occupancy a
Slide 15: Capital Among Industry Leaders
Capital Among Industry Leaders 1 Tier 1 Common Ratio 9.6% 9.6% 9.3% Capital levels increased during the 9.1% 9.0% second quarter 9.1% 8.9% BB&T’s internal capital generation is more than adequate to maintain 8.6% capital targets 2Q10 3Q10 4Q10 1Q11 2Q11 BB&T estimates Tier 1 common under Basel
Slide 16: BB&T: Our Best Days Are Ahead
BB&T Improvement in credit trends accelerates Underlying fundamentals very strong Successfully accomplishing our strategies Investing to drive revenue and loan growth Providing best value proposition in our markets Our Best Days Are Ahead! 16
Slide 17: 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. These statements constitute “forward-looking
Slide 18: Appendix
Appendix
Slide 19: Non-GAAP Capital Measures
Non-GAAP Capital Measures (Dollars in millions) As of / Quarter Ended June 30 March 31 Dec. 31 Sept. 30 June 30 2011 2011 2010 2010 2010 Selected Capital Information 1 Risk-based capital Tier 1 $ 14,363 $ 14,100 $ 13,959 $ 13,828 $ 13,594 Total 18,644 18,389 18,319 18,465 18,327 Risk-weighted assets
Slide 20: Non-GAAP Capital Measures
Non-GAAP Capital Measures (Dollars in millions) As of / Quarter Ended June 30 March 31 Dec. 31 Sept. 30 June 30 2011 2011 2010 2010 2010 Calculations of Tier 1 common equity and tangible assets and related measures: Tier 1 equity $ 14,363 $ 14,100 $ 13,959 $ 13,828 $ 13,594 Less: Qualifying restrict
Slide 21: Non-GAAP Reconciliations
Non-GAAP Reconciliations As of / Quarter Ended June 30 March 31 Dec. 31 Sept. 30 June 30 2011 2011 2010 2010 2010 Asset Quality Ratios (including amounts related to covered loans and covered foreclosed property)1,2 Loans 30-89 days past due and still accruing as a percentage of total loans and lease
Slide 22: Non-GAAP Reconciliations
Non-GAAP Reconciliations As of / Quarter Ended June 30 March 31 Dec. 31 Sept. 30 June 30 2011 2011 2010 2010 2010 Asset Quality Ratios (excluding amounts related to covered loans and covered foreclosed property)1,2,3 Loans 30-89 days past due and still accruing as a percentage of total loans and lea
Slide 23: Non-GAAP Reconciliations
Non-GAAP Reconciliations Quarter Ended June 30 March 31 Dec. 31 Sept. 30 June 30 2011 2011 2010 2010 2010 Efficiency ratio – GAAP 64.1 % 67.4 % 60.9 % 57.3 % 61.7 % Effect of securities gains (losses), net - - 2.4 5.6 5.1 Effect of merger-related and restructuring charges, net (0.1) 0.1 (0.2) (0.4)
Slide 24: Best Bank In Town
Best Bank In Town UE since 1872 BB&T Corporation