Truist Financial Corporation · NYSE:TFC
Truist Financial — BB&T — CFA Society of South Florida (March 2011)
39 slides from Truist Financial's conference presentation, Mar 31, 2011
Slide 1: BB&T Corporation
BB&T Corporation CFA Society of South Florida March 31 2011 O41, Z4UL Daryl N. Bible Chief Financial Officer ay Best Bank In Town BBS Since 1872
Slide 2: Forward-Looking Information
Se, Forward-Looking Information This presentation contains certain forward-looking statements with respect to the financial condition, results of operations and businesses of BB&T. Statements that are not historical or current to facts or statements about beliefs and expectations are forward-looking
Slide 3: Non-GAAP Information
Re 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 perf
Slide 4: BB&T Performance Highlights
A BB&T Performance Highlights BB&T is one of three regional banks to remain profitable through the credit cycle, significantly strengthening our brand Fundamental core performance remains strong and underlying business performance is improving BB&T generated across-the-board improvements in credit i
Slide 5: BB&T is...
BB&T is... A values-driven highly profitable growth organization. During the last two decades, our growth came largely from mergers as the economics of combinations were compelling. In the mid-2000’s, we turned our attention to an organic growth strategy, which proved very effective. More recently,
Slide 6: BB&T Corporation
BB&T Corporation* Headquarters Winston-Salem, NC West Virginia Founded 1872 Market Cap $ 18.3 Branches 1,783 FTE’s 31,354 Asset Size $167.1 billion Deposits $107.2 billion Loans $107.3 billion Total Invested Assets $ 83.5 billion Clients 6.54 million NYSE Traded BBT As of December 31, 2010 Key Non-B
Slide 7: Culture Matters
Culture Matters Values are Consistent and Important (ae Value System Fh Value System HAPPINESS Attract / Train and fillies Retain the right people PRIDE SUCCESS PRODUCIVITY TEAMWORK/MUTUAL SUPPORTIVENESS JUSTICE Perfect Client Experience INDEPENDENT THINKING CHARACTER
Slide 8: Offering Less Volatile, More Predictable Revenue and Earnings Stream
Offering Less Volatile, More Predictable Revenue and Earnings Stream Diverse Revenue Mix‘ Revenue Growth through the Cycle 2010 vs. 2007 2.3 Peer 1 16.5% Peer 2 9.0% Peer 3 9.0% Peer 4 8.5% Peer 5 7.9% Peer 6 5.6% Peer 7 43% Peer 8 (2.5%) Peer 9 (3.8%) Peer 10 (6.2%) Peer 11 (12.3%) Peer 12 (15.0%)
Slide 9: Consistent Long-Term Earnings Power
Arr Consistent Long-Term Earnings Power Pre-tax Pre-provision Earnings 4,000 3,500 3,000 2,500 $ in Millions N 1,500 1,000 500 0) r . 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 As originally reported 15-year compound annual growth rate 18.1%
Slide 10: Superior Earnings Power Returns
AA, Superior Earnings Power Returns Pre-tax Pre-provision ROA' 2.57% 2.55% 2.39% 2.38% 2.35% 2.24% 221% 2.23% 2005 2006 2007 2008 2009 2010 —t—BBT =i Peers?
Slide 11: 2010 Fourth Quarter Highlights
Arr 2010 Fourth Quarter Highlights » Record annual revenues >» Strong improvement in earnings GQ 4Q10 net income available to common shareholders of $208 million, up 12.4% compared to 4Q09 Q 4Q10 EPS totals $.30, up 11.1% compared to 4Q09 Q 2010 net income available to common shareholders of $816 mi
Slide 12: Diverse Sources of Revenue and Loan Growth
I Diverse Sources of Revenue and Loan Growth > C&lvs. CRE mix improvement OQ Commercial lending produced a record $10.3 billion in the fourth quarter OQ December was the best closing month for commercial loans in our history 0 2010 new production mix 84% C&l, 16% CRE O New commercial commitments wer
Slide 13: Diverse Sources of Revenue: Insurance Services
Diverse Sources of Revenue Insurance Services Insurance is a Core Competency for BB&T Vv OQ BB&T operates the 6" largest insurance distributor in the World’ Q Approximately $9.2 billion in premiums and in excess of $1 billion in revenues in 2010 >» Ranked #1 in Productivity among the World’s top 10
Slide 14: Diverse Sources of Revenue: Wealth
Diverse Sources of Revenue Wealth - Investing to Drive Revenue Growth Vv Brought in new leadership Q Strengthened infrastructure OQ Serving all segments (emerging affluent, private financial services, wealth) Q Realigned existing staff to optimize large markets >» Strategic Vision Q Key is to become
Slide 15: Diverse Sources of Revenue: Corporate Lending / Capital Markets
Diverse Sources of Revenue Corporate Lending / Capital Markets Investing to Drive Revenue Growth and Asset Diversification » Established Common Leadership Q Operate client centric model — our commercial clients drive our business > Strategic Vision Q Grow the corporate segment © Lend out of footprin
Slide 16: Diverse Sources of Revenue: Specialized Lending
Diverse Sources of Revenue Specialized Lending Past Investments Paying Off through Asset Diversification Specialized Lending includes: Retail Commercial Q Regional Acceptance Corporation Q Grandbridge Real Estate Capital Q Lendmark Financial Q BB&T Equipment Finance Q Sheffield Financial G AFCO/CAFO
Slide 17: Overall Loan Growth Accelerated
Overall Loan Growth Accelerated Average Loans Held for Investment $110 SOE SEL Average Loan Growth Highlights’ ($ in millions) $1034 $1026 s1023 $1023 «$1024 4Q10 vs.3Q10 4010 vs. 3010 $ $100 Annualized % Increase Increase (Decrease) (Decrease) cal $559 6.9% $90 Other CRE (389) (12.8) Sales Finance
Slide 18: Driving Positive Mix Change in Deposits
AA Driving Positive Mix Change in Deposits Average Client Deposits $110.0 $100.0 5 es a Average Deposit Growth Highlights $00.0 ee 4Q10 vs. 3010 5 $60.0 Annualized % $50.0 Increase = 40.0 (Decrease) ~ $30.0 eae oe Noninterest-bearing deposits 183% = Interest checking 28 a0 _ =e Other client deposits
Slide 19: Net Interest Margin
Se, Net Interest Margin 420% 412% 4.09% 4.04% 4.00% 3.88%, 3.80% — 382% 3.83% 375% 378% 3.75% 3.60% 3.40% + r x 4aq091Q10- 2Q10S 3Q10— 4Q10 —t— Margin —B— Adjusted Margin’ > Margin is benefiting from a more favorable asset and funding mix and a lower cost of funds > Credit spreads are improving, and
Slide 20: Superior Net Interest Margin
| Superior Net Interest Margin Net Interest Margin ak Risk-Adjusted Yield’ ° 7.26% 7.29% 7.00% 5.50% 4.00% 2.50% 2.21% 2.44% 1.00% r 2G) 20 2008 203 20 2006 2007 2008 2009 2010 A BBT 4b Peers? » Margin is benefiting from a more favorable asset and funding mix and a lower cost of funds. » Credit spre
Slide 21: De-Risking of Securities Produces Gains
Se, De-Risking of Securities Produces Gains Securities Book Value Net Gains 4Q10 Purchases $7.6 billion - 4Q10 Sales $6.5 billion $99 million’ 419% » We have completed a strategic 4.00% de-risking of the investment portfolio » We significantly reduced OCI risk in 3.00% light of the new Basel III cap
Slide 22: Strong Fee Income and Efficiency
i Strong Fee Income and Efficiency Strong Fee Income Ratio 45.0% 65.0% 43.0% 60.0% 41.0% 55.0% 39.0% 50.0% 37.0% 35.0% 45.0% 2006 2007 2008 2009 2010 Efficiency Ratio 60.9% 53.9% 53.2% 51.4% 50.9% 50.4% 2006 2007 2008 2009 2010 -A- BBT « -F Peers! * Peers include CMA, COF, FITB, HBAN, KEY, Ml, MTB,
Slide 23: Linked Quarter Credit Trends Improve
Linked Quarter Credit Trends Improve Across the Board in 4Q10 BS Watch list NPLs & Delinquencies & Sa Performing TDRs G& NPAs Ge NPL inflows cvuy Net charge-offs > Credit trends improved for all metrics in the resolution cycle OREO
Slide 24: Inflow of New Problems Clearly Improving
Inflow of New Problems Clearly Improving Total Loans Past Due and Still Accruing’? S000 (Sinmilions) » 7.2% decrease in watch list credits 1,500 =i A : 3 > Total delinquencies declined 1,663 63 9 son $1, 41,577 $1,488 $1,638 $1,408 11.5% >» We saw notable improvement in $500 commercial delinquencies
Slide 25: Underlying Credit Trends Improved
Underlying Credit Trends Improved Total Performing TDRs’* (¢ in millions) >» Performing TDRs decreased 9.9% linked quarter $2,000 $1,891 $1,715 $1,639 Q Performing commercial TDRs Som $1,476 decreased 25% yar > 75% of TDRs are performing 51000: > 87% of performing TDRs are current oon > Only 26% of
Slide 26: NPAs Decrease for Third Consecutive Quarter
a, NPAs Decrease for Third Consecutive Quarter Total Nonperforming Assets" >» Continued strong momentum in NPA disposition strategy 4,304 e @ 44,300 S812 $4,147 > Sold approximately $600 million of aeaco $3,971 nonperforming assets this quarter © $3,900 2 » Average sales price for 3.700 commercial n
Slide 27: Total Charge-offs Decrease Substantially
Total Charge-offs Decrease Substantially Net Charge-offs / Average Loans' 1.98% 4ao9 1010 2a10 3ato aio Core charge-offs 1D Writedowns on Transfer to LHFS Allowance for Loan and Lease Losses / 140% Nonperforming Loans Held for Investment’ 130% 403 1010 2010 3a10 4ai0 > Total charge-offs decreased 38
Slide 28: Capital Among Industry Leaders
AA, Capital Among Industry Leaders’ 9.5% Tier 1 Common Ratio oon 91% > Capital levels increased during 90% 8.9% the fourth quarter > BB&T’s current projection of 85% Tier 1 common under Basel III is 7.5% 8.0% » We believe internal capital generation provides flexibility to meet capital targets 75% »
Slide 29: BB&T Among First Group to Increase Dividend
Lr BB&T Among First Group to Increase Dividend 250% 42.4% > BB&T received no objection to our proposed capital plan from bank regulators. 2.00% We have announced a 1.6% 16% 1.6% target dividend payout of 30% - 50% of earnings. v 1.50% > We currently plan to call substantially all of our trust prefer
Slide 30: Industry Leading Client Service
i Industry Leading Client Service OVERALL BANK SATISFACTION” OVERALL BRANCH SATISFACTION” et I <7, 1 I Peer 1 Peer 1 pe? [nd per? Peer 3 TO... 4 Peer 3 “From Maritz Research Retail Client Satisfaction Survey, represent percentage of “top box scores, indicating a 9 or 10 rafing ona 10-point scale. Pe
Slide 31: 2011 Key Drivers
Se, 2011 Key Drivers >» Loans Q We expect a faster pace of growth in non-real estate loan portfolios with continued declines in commercial real estate, with overall growth of 3%-5% in loans held for investment > Deposits Q Deposits up 1%-3% in total, with double-digit growth in transaction account d
Slide 32: BB&T is Well-Positioned for the Future
| BB&T is Well-Positioned for the Future Vv The underlying performance of our businesses is strong > Our client service metrics are at historic highs » C&l loan growth accelerated this quarter > Maintaining positive revenue growth in a very challenging environment Vv We expect meaningful declines in
Slide 33: Appendix
Appendix |:
Slide 34: Non-GAAP Capital Measures
Non-GAAP Capital Measures (Dollars in millions) As of / Quarter Ended Dec. 31 Sept. 30 June 30, March 31 Dec. 31 2010 2010 2010 2010 2009 Selected Capital information * Risk-based capital Tier $13,959 $13,828 $13,594 $13,657 $13,456 Total 18,319 18,465 18,327 18,658 18,470 Risk-weighted assets? 118,
Slide 35: Non-GAAP Capital Measures
AA, Non-GAAP Capital Measures (Dollars in miions) ‘As of / Quarter Ended Dee. 31 ‘Sept. 30 Jjune30 March 31. Dee. 31 2010 2010 2010 2010 2009 Ther 1 equity 313959 $13,828 $1359 © $13657 $13,456 Less: ‘Qualifying restricted core capital elements 3248 3.255 3254 3,508 3497 Tier 4 common equity 10714 1
Slide 36: Non-GAAP Reconciliations
I Non-GAAP Reconciliations Quarter Ended Dec. 31 Sept. 30 June 30 March 31 Dec. 31 2010 2010 2010 2010 2009 Efficiency ratio - GAAP 60.9% 57.3% 61.7% 61.2% 585% Effect of securities gains (losses), net 24 56 5A a) - Effect of merger-related and restructuring charges, net (2) (4) (16) ( (4) Effect of
Slide 37: Non-GAAP Reconciliations
LR Non-GAAP Reconciliations As of | For the Quarter Ended Dec. 31 Sept. 30 June 30 March 31 Dec. 31 2010 2010 2010 2010 2009 ‘Asset Quality Ratios (including amounts related to covered loans and covered foreclosed property)! Loans 30-89 days past due and stil accruing as a percentage of. total loans
Slide 38: Non-GAAP Reconciliations
LR Non-GAAP Reconciliations As of / For the Quarter Ended Dec. 31 Sept. 30 dune 30 March 31 Dec. 31 2010 2010 2010 2010 2009 Asset Quality Ratios (excluding amounts related to covered loans and covered foreclosed property)!22 Loans 30-89 days past due and still accruing as a percentage of total loan
Slide 39: BB&T
BB&T BB&T Corporation Established 1872 | Se