Slide 1: Second Quarter 2010 Earnings Conference Call
BBS&T Second Quarter 2010 Earnings Conference Call July 22, 2010 Kelly S. King Chairman and Chief Executive Officer Daryl N. Bible Chief Financial Officer Clarke R. Starnes Chief Risk Officer
Slide 2: 2010 Second Quarter Highlights
2010 Second Quarter Highlights Net income available to common shareholders EPS EPS (excluding merger charges) Net interest margin Nonperforming assets, excluding covered assets Net charge-offs excluding covered loans Net charge-offs excluding covered loans and NPA disposition strategy Provision for
Slide 3: NPA transactions liquidated $682 million in problem assets
Ø These transactions successfully liquidated $682 million in problem assets, significantly lowering balance sheet risk and accelerating our outlook for exiting the credit cycle. Ø We will continue this strategy as long as pricing remains firm.
Slide 4: Strategy Results in Reduction in Nonperforming Assets
rn Strategy Results in Reduction in Nonperforming Assets 250% 180% 50% 50% 200% NPAs Decrease in 2Q10 ' 24.5% 18.3% 3.1% 2003 3009 4009 1010 2010 Nonperforming Loans / Loans' 201% 2.00%, 2000 000 4000 1010 2010 A primary goal of the strategy is to accelerate our disposition of problem assets. Consum
Slide 5: Strategy Results in $148 million in Additional Charge-offs
Strategy Results in $148 million in Additional Charge-offs % 1 > We do not expect significantly higher cumulative Net Charge-offs / Average Loans See annie sae aa pelle 3.00% strategy. > NPA reductions will reduce overall credit costs, 2.50% including legal, professional and administrative costs. 2.
Slide 6: Maintaining Strong Reserve Coverage
Arr Maintaining Strong Reserve Coverage 3.00% 250% 2.00% 1.50% 105% 95% 85% Reserves / Loans! 284% 2% 21% 249% 219% 2009 3009 4Q09 1010 2010 Reserves / Nonperforming Loans Held for Investment’ 101 98% 96% 93% 93% 2Q09 3Q09 4Q09 1Q10 2Q10 ‘Excludes covered loans > We maintained our reserves to loans
Slide 7: Regulatory Changes
Arne Regulatory Changes BB&T Impact > RegE O Potentially meaningful reduction in fee income to be mostly offset by product changes > Credit and Debit Card Fees (Durbin) O Potentially meaningful reduction in fee income to be partially offset by product changes > Deposit Insurance O Potentially meanin
Slide 8: Overall delinquencies are stable to improving
Ø Overall delinquencies are stable to improving, particularly excluding the policy change affecting mortgage delinquencies. Ø Increases in charge-offs reflect the NPA disposition strategy and continued efforts to work through the ADC portfolio. Ø NPLs reflect continued manageable deterioration in Ot
Slide 9: The mortgage sale was primarily a bulk sale of larger balance nonaccruals
Ø The mortgage sale was primarily a bulk sale of larger balance nonaccruals ($342 thousand average loan balance compared to remaining nonaccruals average of $180 thousand) with higher uncertainty as to ultimate recovery. We targeted loans where modification was not a likely solution. Ø The mortgage
Slide 10: Early Stage Indicators Continue to Improve
i, Early Stage Indicators Continue to Improve eae Loans 30 - 89 days past due") $1,703 $1,692 $1,686 ° $1,601 anes $1,530 > We are experiencing continuing positive trends in = : early stage indicators. = $1,500 “ > Overall, consumer delinquencies continued to $1,400 improve during the second quarter
Slide 11: Restructured loan balances moderated compared to first quarter
Ø Restructured loan balances moderated compared to first quarter. Ø 80.4% of TDRs are performing. Ø 82.9% of TDRs are current at 2Q10. Ø BB&T’s loan modification programs continue to be an effective strategy for assisting troubled borrowers. 1 Excludes restructured covered and other acquired loans a
Slide 12: OREO Strategy and Trends
OREO Strategy and Trends OREO Inflows" Commentary > Increased sales activity across the board. $381 > We have seen a considerable increase in sales of $322 $330 land and lots ~ 29% of sales in 2Q10 up from 18% $290 in 1010. » OREO balances have been written down 29% on average when transferred to OR
Slide 13: OREO Expenses
Ine OREO Expenses > The $61 million increase in 2Q10 reflects write-downs associated with the implementation of the NPA disposition strategy and an effort to update appraisals. > We completed an effort to update foreclosed property appraisals, receiving more than 1,600 appraisals in the quarter. The
Slide 14: Loan Growth
I, Loan Growth > cal gains. Average Loans $1059 $1033 site $104.0 $996 2008 4010 2010 Commentary and Outlook | growth includes effective corporate banking efforts and market share > Prime auto is experiencing strong organic growth. > Specialized lending growth is led by Sheffield Financial, a small-
Slide 15: Deposit Growth
($ in bllions) v v Deposit Growth Average Client Deposits Deposit Growth Highlights 2Q10 vs. 1010 Annualized % Increase (Decrease) Noninterest-bearing deposits Interest checking Other client deposits Client certificates of deposits 2009 3009 4909 1910 2910 BiNoninterest-bearing deposits El Interest
Slide 16: Rising Net Interest Margin
a Rising Net Interest Margin > The margin continues to benefit from better than expected performance on the loans acquired from Colonial. 4.00% > Retail and commercial spreads improved on a linked quarter basis. 3.80% > Lower deposit costs also resulted in an improvement of 3 bps in the margin compa
Slide 17: Balance Sheet Deleverage
rr Balance Sheet Deleverage Securities Book Value Net Gains $5.1 billion $13.1 billion $219 million* The securities deleverage: > Sensitivities determined using realistic deposit repricing assumptions compared to consumer > Achieves a better mix of eaming assets — Reduces percentage of securities /
Slide 18: Fee Income
Fee Income $ in millions Noninterest Income Insurance income Service charges on deposits Mortgage banking income Investments banking and brokerage fees and commissions ‘Other nondeposit fees and commissions Checkcard fees Bankcard fees and merchant Strong Fee Income Ratio’ 50.0% 45.0% 4 45.5 418% 40
Slide 19: Noninterest Expenses and Efficiency
Noninterest Expenses and Efficiency Efficiency Ratio’ 60.0% ney 55.0% 537% 52.4% ie ai 51.4% 49.8% 45.0% 40.0% + . 2009 3009 4009 4010 2a10 > The increase in personnel expense includes impact of the Colonial acquisition offset by $19 million lower Rabbi trust expense and $15 million in lower pension
Slide 20: Capital Levels
Dec Capital Levels’ Tangible Common Equity Leverage 15% 10.0% 70% 95% 70% 89% ote 87% 65% 85% 85% 85% 65% 64 85% 62% 61% 80% 60% 15% 55% 70% 2009 3009 4009 1010 2Q10 2009 3009 4009 1Q10 2010 Tier 1 Common Ratio Tier 1 Capital Ratio feb 125% 12.0% oe* 85% I% 15% ie 86% 11.5% 85% 85% 84% B4% 114 11.0%
Slide 21: Best Bank In Town
Best Bank In Town BB&L Since 1872