Truist Financial Corporation · NYSE:TFC
Truist Financial — BB&T — Q1 2015 Earnings Presentation
24 slides from Truist Financial's earnings presentation, Apr 23, 2015
Slide 1: First Quarter 2015 Earnings Conference Call
BB&T First Quarter 2015 Earnings Conference Call April 23, 2015 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 19 95, regarding the financial condition, results of operations, business plans and the future performance of BB&T that are based on the belie
Slide 3: 2015 First Quarter Performance Highlights
3 3 2015 First Quarter Performance Highlights 1 ▪ Net income totaled $488 million 2 in 1Q15 ▪ Diluted EPS totaled $0.67, excluding merger - related charges, EPS totaled $0.68 ▪ Revenues totaled $2.3 billion, up $34 million or 1.5% compared to 1Q14 Driven by continued strength in fee businesses R
Slide 4: Solid Loan Growth
4 4 Solid Loan Growth 1 ▪ Excluding Residential mortgage, loans grew 5.4% annualized ▪ Experienced robust loan growth vs. 4Q14 in certain categories: BB&T Equipment Finance, up 17.5% annualized C&I, up 10.7% annualized Sales finance, up 9.9% annualized Regional Acceptance, up 6.7% annualized
Slide 5: Improved Deposit Mix and Cost
5 5 Improved Deposit Mix and Cost $125.7 $129.6 $130.6 $130.3 $129.5 0.27% 0.26% 0.26% 0.25% 0.25% 0.20% 0.25% 0.30% 0.35% 0.40% $100.0 $110.0 $120.0 $130.0 $140.0 1Q14 2Q14 3Q14 4Q14 1Q15 Total Interest-Bearing Deposit Cost ▪ Overall Noninterest Bearing DDA growth vs. 4Q14 was 5.9% annualized ▪ Per
Slide 6: Credit Quality Improved Across the Board
6 6 Credit Quality Improved Across the Board 1 ▪ NPAs declined 2.2% vs. 4Q14 ▪ Delinquent loans declined 19.6% ▪ Net charge - offs decreased 12.9% ▪ Performing TDRs decreased 5.1% ▪ Management expects 2Q15 net charge - offs to be 35 - 40 bps ▪ Expect NPAs to remain stable for the foreseeable future
Slide 7: Allowance Coverage Ratios Remain Strong
7 7 Allowance Coverage Ratios Remain Strong 2.54x 3.28x 2.67x 3.21 3.60x 1.82x 1.89x 1.92x 2.39 2.45x 0.00 1.00 2.00 3.00 4.00 5.00 1Q14 2Q14 3Q14 4Q14 1Q15 ALLL to Net Charge-offs ALLL to NPLs HFI ▪ Coverage ratios remain strong at 3.60x and 2.45x for the allowance to net charge - offs and NPLs, re
Slide 8: Net Interest Margin Relatively Stable in 1Q15
8 8 Net Interest Margin Relatively Stable in 1Q15 3.52% 3.43% 3.38% 3.36% 3.33% 3.29% 3.22% 3.20% 3.20% 3.18% 2.75% 3.25% 3.75% 4.25% 1Q14 2Q14 3Q14 4Q14 1Q15 Reported NIM Core NIM ▪ 1Q15 NIM declined 3 bps vs. 4Q14 as a result of: Lower yields on new loans Runoff of assets acquired from the FDI
Slide 9: Strong Fee Income
9 9 Strong Fee Income ▪ Insurance income was a record $440 million, up $31 million vs. 4Q14 primarily due to seasonal growth in employee benefit commissions ▪ Mortgage banking income declined $18 million vs. 4Q14 primarily reflecting lower net mortgage servicing rights income ▪ Investment banking an
Slide 10: Noninterest Expense Up Due To Seasonal Factors
10 10 Noninterest Expense Up Due To Seasonal Factors 1Q15 1Q15 v. 4Q14 2 Increase (Decrease) 1Q15 v. 1Q14 Increase (Decrease) Personnel expense $ 830 18.4 % 6.1 % Occupancy and equipment expense 167 (2.4) (5.1) Loan - related expense 38 (188.5) (25.5) Software expense 44 (9.0) 2.3 Professional servi
Slide 11: Capital and Liquidity Strength
11 11 Capital and Liquidity Strength 10.2% 10.2% 10.5% 10.6% 10.5% 9.0% 10.0% 11.0% 1Q14 2Q14 3Q14 4Q14 1Q15 ▪ Fully phased in common equity Tier 1 ratio under Basel III was approximately 10.3% at March 31, 2015 and December 31, 2014 ▪ BB&T’s 1Q15 LCR was 130% vs. the minimum requirement of 90% by J
Slide 12: Community Banking Segment
12 12 ($ in millions) Inc/(Dec) vs 4Q14 Inc/(Dec) 1Q14 1Q15 Comments 3 Net Interest Income Noninterest Income 1 Provision for Credit Losses Noninterest Expense 2 Income Tax Expense Segment Net Income Highlighted Metrics $ 709 300 13 666 120 $ 210 $ (21) (27) (7) 25 (25) $ (41) $ (14) (5) (3) (7) (4)
Slide 13: Residential Mortgage Banking Segment
13 13 Retains and services mortgage loans originated by the Residential Mortgage Lending Division and through its referral relation shi p with the Community Bank and referral partners as well as those purchased from various correspondent originators ($ in millions) Inc /(Dec) vs 4Q14 Inc/(Dec) 1Q14
Slide 14: Dealer Financial Services Segment
14 14 Primarily originates indirect loans to consumers on a prime and nonprime basis for the purchase of automobiles and other vehi cle s through approved dealers both in BB&T’s market and nationally (through Regional Acceptance Corporation) Comments 4 ($ in millions) Inc /(Dec) vs 4Q14 Inc /(Dec) 1
Slide 15: Specialized Lending Segment
15 15 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 ($ in millions) Inc/(De
Slide 16: Insurance Services Segment
16 16 Comments 4 ($ in millions) Inc/(Dec) vs 4Q14 Inc/(Dec) 1Q14 1Q15 Net Interest Income Noninterest Income 1 Provision for Credit Losses Noninterest Expense 2 Income Tax Expense Segment Net Income Highlighted Metrics Noninterest Income Number of Stores 3 EBITDA Margin 1Q15 Like Provides property
Slide 17: Financial Services Segment
17 17 Provides trust services, wealth management, investment counseling, asset management, estate planning, employee benefits, corporate banking, and capital market services to individuals, corporations, governments, and other organizations Comments 4 ($ in millions) Inc/(Dec) vs 4Q14 Inc/(Dec) 1Q14
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Slide 19: Appendix
Appendix
Slide 20: Capital Measures
Capital Measures 1 (Dollars in millions, except per share data) 1 2 Current quarter regulatory capital is preliminary Risk - weighted assets are determined based on regulatory capital requirements in effect for the period presented 3 4 Tangible common equity and related ratios are non - GAAP measure
Slide 21: Non-GAAP Reconciliations
Non - GAAP Reconciliations 1 21 (Dollars in millions, except per share data) 1 2 Current quarter regulatory capital is preliminary Risk - weighted assets are determined based on regulatory capital requirements in effect for the period presented 3 Tangible common equity and related ratios are non - G
Slide 22: Non-GAAP Reconciliations
Non - GAAP Reconciliations 1 22 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 23: Non-GAAP Reconciliations
23 1 BB&T’s management believes investors use this measure to evaluate the return on average common shareholders’ equity without t h e impact of intangible assets and their related amortization. Non - GAAP Reconciliations 1 (Dollars in millions) Quarter Ended March 31 2015 Dec. 31 2014 Sept. 30 2014
Slide 24: Non-GAAP Reconciliations
Non - GAAP Reconciliations 1 Quarter Ended Reported net interest margin vs. core net interest margin March 31 2015 Dec. 31 2014 Sept. 30 2014 June 30 2014 March 31 2014 Reported net interest margin - GAAP 3.33 % 3.36 % 3.38 % 3.43 % 3.52 % Adjustments to interest income for assets acquired from FDIC