Slide 1: Second Quarter 2013 Earnings Conference Call
Sharing Knowledge fora Brighter Direction Second Quarter 2013 Earnings Conference Call July 18, 2013 Kelly S. King Chairman and Chief Executive Officer Daryl N. Bible Chief Financial Officer
Slide 2: Non-GAAP Information
Non - GAAP Information This presentation contains financial information and performance measures 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 analysi
Slide 3: 2013 Second Quarter Performance Highlights
2013 Second Quarter Performance Highlights 1 1 Linked quarter growth rates are annualized, except for credit metrics 2 Available to common shareholders. See the reconciliation included in the attached Appendix 3 Fully taxable equivalent . 4 Excludes securities gains (losses), the impact of FDIC loss
Slide 4: Improved Loan Growth
Improved Loan Growth 1 $109.2 $112.7 $113.6 $113.2 $114.3 $100 $105 $110 $115 2Q12 3Q12 4Q12 1Q13 2Q13 Average Loans Held for Investment ($ in billions) » EOP loans HFI were higher than the 2Q13 average balance » Other lending subsidiaries produced seasonally strong results with Sheffield up 41.1%,
Slide 5: Improved Deposit Mix and Cost
Improved Deposit Mix and Cost » Strong organic growth in noninterest - bearing deposits, up 13.2% vs. 1Q13 » Grew net new retail accounts in 2Q13 » Successfully reduced interest - bearing deposit cost to 32 bps during 2Q13 and management expects deposit cost to move below 30 bps by year end » Manage
Slide 6: Update on 2013 Initiatives
Update on 2013 Initiatives » Expand corporate banking in key national markets with continued expansion of vertical lending teams □ Added corporate banking teams in larger markets (e.g., Dallas, Chicago, Cincinnati, San Francisco) □ Common quarter loan growth up 31% » Expand advisor capacity of wealt
Slide 7: Credit Improvement Accelerates
1.09% 0.97% 0.85% 0.80% 0.71% 0.60% 0.70% 0.80% 0.90% 1.00% 1.10% 1.20% 2Q12 3Q12 4Q12 1Q13 2Q13 Total Nonperforming Assets as a Percentage of Total Assets Credit Improvement Accelerates 1 » 2Q13 net charge - offs were $215 million, down 21.8% vs. 1Q13 » Lowest charge - off rate in 5 years » Expect
Slide 8: Credit Improvement Accelerates
» Delinquencies improved across the board with 30 - 89 days at 0.81% and 90 days and greater at 0.11% of total loans and leases » NPA inflows decreased significantly in 2Q13, driving loan loss improvement and a lower provision Credit Improvement Accelerates 1 1 Excludes covered assets. $365 $330 $27
Slide 9: Margin Remains Strong
3.95% 3.94% 3.84% 3.76% 3.70% 3.45% 3.51% 3.42% 3.43% 3.40% 3.00% 3.50% 4.00% 4.50% 2Q12 3Q12 4Q12 1Q13 2Q13 Net Interest Margin Reported NIM Core NIM 1 Margin Remains Strong » Margin expected to decline approximately 5 - 10 bps in 3Q13 driven by: □ Lower rates on new earning assets □ Runoff of cove
Slide 10: Fee Income Growth
Fee Income Growth 42.4% 42.4% 44.1% 42.9% 44.6% 36.0% 40.0% 44.0% 48.0% 2Q12 3Q12 4Q12 1Q13 2Q13 Fee Income Ratio 1 1 Excludes securities gains (losses), the impact of FDIC loss share accounting and other selected items. See non - GAAP reconciliat ions included in the attached Appendix. 2 Linked qua
Slide 11: Noninterest Expense and Efficiency
Noninterest Expense and Efficiency 2Q13 2Q13 v. 1Q13 2 Increase (Decrease) 2Q13 v. 2Q12 Increase (Decrease) Personnel expense $ 844 13.3% 8.9% Occupancy and equipment expense 170 (2.3) 6.9 Loan - related expense 63 34.6 1.6 Foreclosed property expense 12 (133.7) (83.3) Regulatory charges 35 - (18.6)
Slide 12: Capital Strength
Capital Strength 1 9.1% 8.9% 9.1% 9.2% 9.4% 8.0% 9.0% 10.0% 2Q12 3Q12 4Q12 1Q13 2Q13 Basel I Tier 1 Common Ratio 1 Regulatory capital information is preliminary. Risk - weighted assets are determined based on regulatory capital requirements. Un der the regulatory framework for determining risk - wei
Slide 13: Community Banking Segment
Community Banking Segment Comments 4 Highlighted Metrics 2Q13 2Q12 ($ in millions) Inc/(Dec) 1Q13 Inc/(Dec) 2Q12 2Q13 ($ in billions) Net Interest Income Noninterest Income 1 Loan Loss Provision Noninterest Expense 2 Income Tax Expense Segment Net Income $ (5) 18 28 18 (13) $ (20) $ (33) 21 (79) 4 2
Slide 14: Residential Mortgage Banking Segment
Net Interest Income Noninterest Income 1 Loan Loss Provision Noninterest Expense 2 Income Tax Expense Segment Net Income Retail Originations Correspondent Purchases Total Production Loan Sales Loans Serviced for others (EOP) 30+ Days Delinquent (HFI only) % Non - Accrual (HFI only) Net Charge - Offs
Slide 15: Dealer Financial Services Segment
Highlighted Metrics Net Interest Income Noninterest Income 1 Loan Loss Provision Noninterest Expense 2 Income Tax Expense Segment Net Income Primarily originates indirect to consumers on a prime and nonprime basis for the purchase of automobiles and other vehicles through approved dealers both in BB
Slide 16: Specialized Lending Segment
Highlighted Metrics Specialized Lending Segment 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
Slide 17: Insurance Segment
1 Noninterest Income includes intersegment net referral fees. 2 Noninterest Expense includes amortization of intangibles and allocated corporate expense. 3 Six months of current year over six months of prior year 4 2Q13 excludes experience - based return of premium. Insurance Segment Comments Net In
Slide 18: Financial Services Segment
Highlighted Metrics Financial Services Segment Comments Average Loan Balances Average Deposits Total Assets Invested Operating Margin Provides trust services, wealth management, investment counseling, asset management, estate planning, employee benefits, corporate banking, and capital market service
Slide 19: Sharing Knowledge for a Brighter Direction
BB&d Sharing Knowledge fora Brighter Direction 19
Slide 20: Appendix
Appendix
Slide 21: Capital Measures
Capital Measures 1 (Dollars in millions, except per share data) As of / Quarter Ended June 30 2013 March 31 2013 Dec 31 2012 Sept 30 2012 June 30 2012 Selected Capital Information Risk - based capital Tier 1 $ 15,397 $ 14,432 $ 14,373 $ 13,593 $ 12,383 Total 19,237 18,296 18,243 17,638 16,527 Risk -
Slide 22: Basel III Common Equity Tier 1 Ratio
Basel III Common Equity Tier 1 Ratio 1 (Dollars in millions) June 30, 2013 Tier 1 common equity under Basel I definition $ 12,794 Adjustments: Other comprehensive income related to AFS securities, defined benefit pension and other postretirement employee benefit plans - Other adjustments 62 Common e
Slide 23: Non-GAAP Reconciliations
Non - GAAP Reconciliations (Dollars in millions, except per share data) As of / Quarter Ended June 30 2013 March 31 2013 Dec 31 2012 Sept 30 2012 June 30 2012 Calculations of Tier 1 common equity and tangible assets and related measures: Tier 1 equity $15,397 $14,432 $ 14,373 $ 13,593 $ 12,383 Less:
Slide 24: Non-GAAP Reconciliations: Asset Quality Ratios
Non - GAAP Reconciliations Applicable ratios are annualized. 1 Excludes mortgage loans guaranteed by GNMA that BB&T does not have the obligation to repurchase. 2 Excludes mortgage loans guaranteed by the government. As of / Quarter Ended June 30 2013 March 31 2013 Dec 31 2012 Sept 30 2012 June 30 20
Slide 25: Non-GAAP Reconciliations: Asset Quality Ratios Excluding Covered
Non - GAAP Reconciliations Applicable ratios are annualized. 1 Excludes mortgage loans guaranteed by GNMA that BB&T does not have the obligation to repurchase. 2 Excludes mortgage loans guaranteed by the government. As of / Quarter Ended June 30 2013 March 31 2013 Dec 31 2012 Sept 30 2012 June 30 20
Slide 26: Non-GAAP Reconciliations: Efficiency and Fee Income Ratios
Non - GAAP Reconciliations Quarter Ended Efficiency and Fee Income Ratios June 30 2013 March 31 2013 Dec 31 2012 Sept 30 2012 June 30 2012 Efficiency ratio – GAAP 59.9 % 57.5% 58.8 % 61.6 % 57.9 % Effect of securities gains (losses), net 0.5 0.5 - - - Effect of merger - related and restructuring cha
Slide 27: Non-GAAP Reconciliations: Return on Tangible Common Equity
Non - GAAP Reconciliations (Dollars in millions) Quarter Ended June 30 March 31 Dec 31 Sept 30 June 30 Return on Average Tangible Common Shareholders' Equity 2013 2013 2012 2012 2012 Net income available to common shareholders $ 547 $ 210 $ 506 $ 469 $ 510 Plus: Amortization of intangibles, net of t
Slide 28: Non-GAAP Reconciliations: Net Interest Margin
Non - GAAP Reconciliations Quarter Ended Reported net interest margin vs. core net interest margin June 30 2013 March 31 2013 Dec 31 2012 Sept 30 2012 June 30 2012 Reported net interest margin - GAAP 3.70% 3.76 % 3.84 % 3.94 % 3.95 % Adjustments to interest income for covered assets: Effect of cover
Slide 29: Non-GAAP Reconciliations: Net Income to Common Shareholders
Non - GAAP Reconciliations (Dollars in millions, except per share data) Net Income Available to Common Shareholders Quarter Ended March 31, 2013 Net income available to common shareholders - GAAP $ 210 Effect of tax adjustment 281 Net income available to common shareholders – adjusted $ 491 Diluted
Slide 30: Sharing Knowledge for a Brighter Direction
BB&d Sharing Knowledge fora Brighter Direction 30