Truist Financial Corporation · NYSE:TFC
Truist Financial — BB&T — Q3 2011 Earnings Presentation
25 slides from Truist Financial's earnings presentation, Oct 20, 2011
Slide 1: Third Quarter 2011 Earnings Conference Call
Best Bank In Town BB&I Since 1872 Third Quarter 2011 Earnings Conference Call October 20, 2011 S| ir : ae ie 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 Third Quarter Highlights
2011 Third Quarter Highlights 1 Net income available2 totaled $366 million, up 74.3% vs. 3Q10 EPS totaled $0.52, up 73.3% vs. 3Q10 Strongest quarterly earnings in 3 years Tax-equivalent net interest income totaled $1.5 billion, up 18.3% vs. 2Q11 Produced positive operating leverage4 Cont
Slide 4: Unusual Items Affecting Earnings
Unusual Items Affecting Earnings $ in millions, except per share impact Pretax After Tax EPS Losses and write-downs related to NPA $(37) $(23) $(0.03) disposition strategy Leveraged lease sale and other tax-related (16) 16 0.02 adjustment1 Other than temporary impairment (39) (24) (0.03) 1 After tax
Slide 5: Balance Sheet Highlights
Balance Sheet Highlights 3Q11 new production mix 85% C&I / 15% CRE in Remains middle market focused Community Banking Segment Relationship based Direct Retail posted 5.9% annualized growth in EOP Avoid leveraged sponsored lending; strict hold limits loans vs. 2Q11; September best productio
Slide 6: Broad-based Loan Growth
Broad-based Loan Growth Average Loans Held for Investment $110 ($ in billions) Average Loan Growth Highlights1 ($ in millions) $103.9 $102.3 $102.4 $102.6 $102.8 3Q11 vs. 2Q11 3Q11 vs. 2Q11 3Q11 $ Annualized % Average Increase Increase $100 Balance (Decrease) (Decrease) C&I $ 34,280 $ 633 7.5% Other
Slide 7: Driving Growth in Lower Cost Deposits
Driving Growth in Lower Cost Deposits Average Deposits $120.0 ($ in billions) $115.1 $110.0 Average Deposit Growth Highlights $105.6 $105.6 $106.5 ($ in millions) $103.5 $100.0 3Q11 vs. 2Q11 3Q11 vs. 2Q11 3Q11 $ Annualized % Average Increase Increase $90.0 Balance (Decrease) (Decrease) Noninterest-b
Slide 8: Credit Improvement Continues
Credit Improvement Continues 1 8.1% 8.9% Watch list NPLs 9.4% Performing TDRs 16.2% OREO 12.1% NPA inflows 11.5% NPAs 7.9% 90 days+ past due Net charge-offs2 17.6% and still accruing 1 Amounts exclude covered assets and government guaranteed loans where applicable. 2 Including covered assets, net ch
Slide 9: NPAs Decrease for 6th Consecutive Quarter
NPAs Decrease for 6th Consecutive Quarter Total Nonperforming Assets1 ($ in millions) $4,500 Down $4,147 ~ $1.2 billion 11.5%1 reduction in NPAs vs. 2Q11 vs. 3Q10 $4,000 $3,971 $3,863 Sold approximately $450 million of problem assets this quarter $3,500 $3,353 Lowest NPA balances in 2 1/2 year
Slide 10: Formation of New Problem Assets Continue to Decline
Formation of New Problem Assets Continue to Decline Inflows to Nonaccrual Loans Total NPA inflows decreased 12.1% ($ in millions) NPL Inflows compared to 2Q11; commercial loan $1,400 Down 45.6% vs. 3Q10 inflows down 19.0% $1,200 $1,000 Early credit indicators suggest continued improvement in inf
Slide 11: Charge-offs Decrease Consistent with Expectations
Charge-offs Decrease Consistent with Expectations Net Charge-offs / Average Loans1 Net charge-offs decreased 17.6%1 3.75% compared to 2Q11 (down 5.6% including covered charge-offs); 3.00% 1.74% represents the lowest level in almost 0.08% three years 2.25% 0.34% 1.50% Net charge-offs from covered
Slide 12: Stable Margin Outlook
Stable Margin Outlook 4.20% Net Interest Margin Margin is benefiting from wider loan 4.15% credit spreads and declining cost of 4.10% funds 4.09% 4.09% 4.00% 4.04% The impact on net interest income 4.01% related to assets acquired in the 3.90% Colonial transaction was unchanged from 2Q11 3.80%
Slide 13: BB&T Expands Securities Portfolio
BB&T Expands Securities Portfolio Purchased $5.3 billion in GNMA Portfolio Composition securities in 3Q11 consisting of 23.1% fixed and adjustable MBS 39.5% Purchasing these securities, coupled with growing deposits, produced significant progress in complying with Basel III liquidity guidelines
Slide 14: Fee Income
Fee Income Fee Income Ratio1 45.0% Noninterest Income ($ in millions) 42.3% 41.8% 3Q11 v. 3Q11 v. 40.8% 2Q112 3Q10 41.0% 40.1% Increase Increase 39.3% 3Q11 (Decrease) (Decrease) Insurance income $ 241 (77.0)% (4.4)% Service charges on deposits 141 (10.9) (4.1) 37.0% Mortgage banking income 123 191.2
Slide 15: Noninterest Expenses and Efficiency
Noninterest Expenses and Efficiency 60.0% Efficiency Ratio1 Noninterest Expense ($ in millions) 3Q11 v. 3Q11 v. 2Q112 3Q10 57.1% Increase Increase 55.0% 3Q11 (Decrease) (Decrease) 55.8% 55.3% Personnel expense $ 671 (7.0)% 4.5% 54.6% 54.1% Foreclosed property expense 168 62.9 0.6 Occupancy and equip
Slide 16: Capital Strength
Capital Strength 1 Tier 1 Common Ratio 9.8% 9.8% 9.6% BB&T estimates Tier 1 common under Basel III is 8.8% 9.3% 9.3% Capital levels currently exceed capital 9.1% plan projections providing financial 9.0% flexibility Consistent plans for capital 8.8% 3Q10 4Q10 1Q11 2Q11 3Q11 deployment Organi
Slide 17: BB&T: Our Best Days Are Ahead!
BB&T No signs of economic issues affecting credit trends; recent vintage loan performance is very strong Underlying fundamentals in loan and deposit growth exceptionally strong Successfully accomplishing our diversification and workout strategies Investing to drive revenue and loan growth Re-concept
Slide 18: 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 19: Appendix
Appendix
Slide 20: Non-GAAP Capital Measures
Non-GAAP Capital Measures (Dollars in millions) As of / Quarter Ended Sept. 30 June 30 March 31 Dec. 31 Sept. 30 2011 2011 2011 2010 2010 Selected Capital Information 1 Risk-based capital Tier 1 $ 14,696 $ 14,363 $ 14,100 $ 13,959 $ 13,828 Total 18,839 18,641 18,389 18,319 18,465 Risk-weighted asset
Slide 21: Non-GAAP Capital Measures
Non-GAAP Capital Measures (Dollars in millions) As of / Quarter Ended Sept. 30 June 30 March 31 Dec. 31 Sept. 30 2011 2011 2011 2010 2010 Calculations of Tier 1 common equity and tangible assets and related measures: Tier 1 equity $ 14,696 $ 14,363 $ 14,100 $ 13,959 $ 13,828 Less: Qualifying restric
Slide 22: Non-GAAP Reconciliations
Non-GAAP Reconciliations As of / Quarter Ended Sept. 30 June 30 March 31 Dec. 31 Sept. 30 2011 2011 2011 2010 2010 Asset Quality Ratios (including amounts related to covered loans and covered foreclosed property) Loans 30-89 days past due and still accruing as a percentage of total loans and leases
Slide 23: Non-GAAP Reconciliations
Non-GAAP Reconciliations As of / Quarter Ended Sept. 30 June 30 March 31 Dec. 31 Sept. 30 2011 2011 2011 2010 2010 Asset Quality Ratios (excluding amounts related to covered loans and covered foreclosed property)3 Loans 30-89 days past due and still accruing as a percentage of total loans and leases
Slide 24: Non-GAAP Reconciliations
Non-GAAP Reconciliations Quarter Ended Sept. 30 June 30 March 31 Dec. 31 Sept. 30 2011 2011 2011 2010 2010 Efficiency ratio – GAAP 66.1 % 64.1 % 67.4 % 60.9 % 57.3 % Effect of securities gains (losses), net (1.0) - - 2.4 5.6 Effect of merger-related and restructuring charges, net - (0.1) 0.1 (0.2) (
Slide 25: Best Bank In Town
Best Bank In Town BBST Since 7872 BB&T Corporation