Truist Financial Corporation · NYSE:TFC
Truist Financial — BB&T — Q4 2011 Earnings Presentation
31 slides from Truist Financial's earnings presentation, Jan 19, 2012
Slide 1: Fourth Quarter 2011 Earnings Conference Call
— Best Bank In Town | BB&I Since 1872 | Fourth Quarter 2011 Earnings Conference Call January 19, 2012 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 Fourth Quarter Performance Highlights
2011 Fourth Quarter Performance Highlights 1 Net income2 totaled $391 million million, up 88 88.0% 0% vs vs. 4Q10 EPS totaled $0.55, up 83.3% vs. 4Q10 Strongest quarterly earnings in more than 3 years Net interest income3 totaled $1.5 billion, up 9.6% vs. 3Q11 Net operating revenue3,5 tota
Slide 4: Unusual Items Affecting Earnings
Unusual Items Affecting Earnings $ in millions, except per share impact Pretax After Tax EPS Securities gains, net $103 $64 $0.09 O O valuation adjustment1 Additional OREO ( (220) ) (137) (0 19) (0.19) Merger-related and restructuring charges2 (16) (10) (0.01) Losses / write-downs write downs to con
Slide 5: Broad-based Loan Growth
Broad-based Loan Growth Average Loans Held for Investment ($ in billions) $106 $105.8 Average Loan Growth Highlights1 ($ in millions) $103.9 4Q11 vs. 3Q11 4Q11 vs. 3Q11 $104 4Q11 $ Annualized % Average Increase Increase $102.6 $102.8 Balance (Decrease) (Decrease) $102.4 C&I $ 35,232 $ 952 11.0 % $10
Slide 6: Driving Growth in Lower Cost Deposits
Driving Growth in Lower Cost Deposits Average Deposits ($ in billions) $130.0 $121.9 $120.0 Average Deposit Growth Highlights $115 1 $115.1 ($ in millions) $110.0 $106.5 $105.6 $105.6 4Q11 vs. 3Q11 4Q11 vs. 3Q11 4Q11 $ Annualized % Average Increase Increase $100.0 Balance (Decrease) (Decrease) Nonin
Slide 7: NPAs Decrease 17.5%
NPAs Decrease 17.5%1 Lowest Levels Since 4Q08 Q Down 38.3% vs. 4Q10 Total Nonperforming Assets1 ($ in millions) $4,000 $ $3,971 $3,863 17.5%% reduction in NPAs vs. 3Q11, Q seven sequential quarterly declines Commercial NPLs, including held for $3,500 $3,353 sale, decreased 8.1% vs. 3Q11 Reduct
Slide 8: Aggressive OREO Reduction Strategy Proves Effective
Aggressive OREO Reduction Strategy Proves Effective Sales and Inflows of OREO1 OREO inflows $350 ($ in millions) $295 decreased $255 57.3% vs. 4Q10 $247 $250 $214 $213 Foreclosed F l d property t b balances l $246 decreased 41.4% vs. 3Q11 $227 $150 $177 $118 $126 Successful quarter executing a m
Slide 9: Losses Consistent with Expectations
Losses Consistent with Expectations 1 N t Ch Net Charge-offs ff / Average A Loans L 4Q11 net charge-offs h ff off 1.46% 1 46% 3.75% remained flat with 3Q11 and 3.00% consistent with previous guidance 2 25% 2.25% 0.08% 2011 full year net charge-offs of 0.34% 1.59% down significantly vs. 2.59% in
Slide 10: Maintaining Conservative Allowance Levels
Maintaining Conservative Allowance Levels Allowance for All f Loan L and d Lease L Losses L / Excluding covered assets and the Nonperforming Loans and Leases Held for Investment1 reserve for unfunded commitments, 1.60x the allowance was reduced $135 million in 4Q11 due to better credit 1.40x quali
Slide 11: Margin Remains Strong
Margin Remains Strong N t IInterest Net t t Margin M i 4.50% Core margin is stable, benefiting from declining cost of funds, offset 4.15% by lower yields on earning assets 4.09% 4 04% 4.04% 4.01% 4.02% Net N t iinterest t t income i increased i d99.6% 6% 4.00% annualized linked quarter Expect
Slide 12: BB&T Expands Securities Portfolio
BB&T Expands Securities Portfolio Portfolio Composition 52.8% Purchased $9.4 billion in securities in 4Q11 including $5 $5.4 4 billion of GNMA MBS Approximately 99% of the portfolio is backed by government or 32.8% government agencies 1.0% Effective duration is 3.3 years at year end 2011 3.7%
Slide 13: Fee Income
Fee Income Fee Income Ratio1 48 0% 48.0% Noninterest Income 44.0% ($ in millions) 41.8% 40.8% 40.1% 4Q11 v. 4Q11 v. 39.3% 3Q112 4Q10 40.0% 38.4% Increase Increase 4Q11 (Decrease) (Decrease) 36.0% Insurance income $ 254 21.4 % 2.0 % Service charges on deposits 142 2.8 (0.7) 32.0% Mortgage banking inc
Slide 14: Noninterest Expenses and Efficiency
Noninterest Expenses and Efficiency 60.0% Efficiency Ratio1 Noninterest Expense 57.1% ($ in millions) 4Q11 v. 4Q11 v. 55.8% 3Q112 4Q10 55.3% 54 6% 54.6% Increase Increase 55.0% 4Q11 (Decrease) (Decrease) 53.5% Personnel expense $ 679 4.7 % - % Foreclosed property expense 346 NM 113.6 Occupancy and e
Slide 15: Capital Strength
Capital Strength 1 Tier 1 Common Ratio 12.0% 9.6% 9.8% 9.7% 10.0% 9.3% 9.1% Regulatory capital ratios declined due to faster earning asset growth in 4Q11 8.0% BB&T estimates Tier 1 common under Basel III is 8.8% 6 0% 6.0% 4Q10 1Q11 2Q11 3Q11 4Q11 Consistent plans for capital deployment Organ
Slide 16: Community Banking Segment
Community Banking Segment Inc/(Dec) Inc/(Dec) ($ in millions) 4Q11 3Q11 4Q10 Comments Net Interest Income $886 $(2) $(48) Segment net income was $186 million, Noninterest Income1 282 (36) (49) excluding 4Q11 OREO charge Loan Loss Provision 123 (27) (342) Drivers included: loan growth, reduced No
Slide 17: Residential Mortgage Banking Segment
Residential Mortgage Banking Segment Retains and services mortgage g g loans originated g by y the Community y Bankingg segment g as well as those purchased from various correspondent originators Inc/(Dec) Inc/(Dec) ($ in millions) 4Q11 3Q11 4Q10 Comments Net N t Interest I t t Income I $84 $12 $7
Slide 18: Dealer Financial Segment
Dealer Financial Segment Primarily originates indirect to consumers on a prime and nonprime basis for the purchase of automobiles and other vehicles through approved dealers both in BB&T’s market and nationally (through Regional Acceptance Corporation) Inc/(Dec) Inc/(Dec) ($ in millions) 4Q11 3Q11 4
Slide 19: Specialized Lending Segment
Specialized Lending Segment Provides specialty lending including: commercial finance finance, mortgage warehouse lending lending, tax-exempt governmental finance, equipment leasing, commercial mortgage banking, insurance premium finance, dealer-based equipment financing, and direct consumer finance
Slide 20: Insurance Services Segment
Insurance Services Segment Provides property and casualty casualty, life life, and health insurance to business and individual clients. clients It also provides workers compensation and professional liability, as well as surety coverage and title insurance Inc/(Dec) Inc/(Dec) ($ in millions) 4Q11 3Q
Slide 21: Financial Services Segment
Financial Services Segment Provides trust services, wealth management, investment counseling, asset management, estate t t planning, l i employee l b benefits, fit corporate t bbanking, ki and d capital it l market k t services i tto iindividuals, di id l corporations, governments, and other organiz
Slide 22: BB&T: Our Best Days Are Ahead
BB&T Investing to drive revenue and loan growth Underlying fundamentals in loan and deposit growth exceptionally strong Successfully accomplishing our diversification and risk mitigation strategies Re-conceptualizing our business to drive revenue and expense optimization Providing best value proposi
Slide 23: 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. call These statements constitute “forward-lo
Slide 24: Appendix
Appendix
Slide 25: 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 2011 2011 2011 2011 2010 Selected Capital Information 1 Risk-based capital Tier 1 $ 14,913 14 913 $ 14 14,696 696 $ 14 14,363 363 $ 14 14,100 100 $ 13 13,959 959 Total 18,804 18,837 18,641
Slide 26: 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 2011 2011 2011 2011 2010 Calculations of Tier 1 common equity and tangible assets and related measures: Tier 1 equity $ 14,913 $ 14,696 $ 14,363 $ 14,100 $ 13,959 Less: Qualifying restrict
Slide 27: Non-GAAP Capital Measures
Non-GAAP Capital Measures December September (Dollars in millions) 31, 20111 30, 20111 Tier 1 common equity under Basel 1 definition $ 11,663 $ 11,447 Adjustments: AFS securities securities, defined benefit pension and other postretirement employee benefit plans (553) (193) Deduction for net defined
Slide 28: Non-GAAP Reconciliations
Non-GAAP Reconciliations As of / Quarter Ended Dec.31 Sept. 30 June 30 March 31 Dec. 31 2011 2011 2011 2011 2010 Asset Quality Ratios (including amounts related to covered loans and covered foreclosed property) p p y) Loans 30-89 days past due and still accruing as a percentage of total loans and le
Slide 29: Non-GAAP Reconciliations
Non-GAAP Reconciliations As of / Quarter Ended Dec. 31 Sept. 30 June 30 March 31 Dec. 31 2011 2011 2011 2011 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 leases1
Slide 30: Non-GAAP Reconciliations
Non-GAAP Reconciliations Quarter Ended Dec, 31 Sept. 30 June 30 March 31 Dec. 31 2011 2011 2011 2011 2010 Efficiency ratio – GAAP 67.1 % 66.1 % 64.1 % 67.4 % 60.9 % Effect of securities gains (losses), net 2.4 (1.0) - - 2.4 Effect of merger-related and restructuring charges, net (0.7) - (0.1) 0.1 (0
Slide 31: Best Bank In Town
™ Best Bank In Town BB&T Since 17872 BB&T Corporation