Truist Financial Corporation · NYSE:TFC
Truist Financial — BB&T — BancAnalysts Association of Boston 35th Annual Fall Conference (November 2016)
25 slides from Truist Financial's conference presentation, Nov 3, 2016
Slide 1: BancAnalysts Association of Boston 35th Annual Fall Conference
BBS&T BancAnalysts Association of Boston 35% Annual Fall Conference Daryl N. Bible Chief Financial Officer November 3, 2016
Slide 2: Agenda
2 Agenda BB&T vision and mission BB&T overview Performance recap Balancing expense objectives Well-positioned for the future
Slide 3: BB&T vision and mission
\d financial security; é eating a place where our ASSOCIATES f rn, grow and be fulfilled in their work;
Slide 4: Among Leaders in Key Performance Measures
4 Among Leaders in Key Performance Measures Most Recent Quarter Results BB&T Peer Rank Return on average tangible common equity1 15.20% 2nd Return on risk-weighted assets 1.45% 3rd Net interest margin 3.39% 1st GAAP efficiency Adjusted efficiency1 61.7% 58.7% 6th 4th Dividend yield 3.18% 2nd Nonperf
Slide 5: BB&T is…
5 BB&T is… A values-driven highly profitable growth organization. While we have had a very successful merger history, our primary focus is on organic growth; nonetheless, we are well positioned for strategic opportunities. Our fundamental strategy is to deliver the best value proposition in our
Slide 6: BB&T Corporation: A Growing Franchise
6 1 Excludes home office deposits 2 Deposit Market Share data as of June 30, 2016 Source: FactSet, FDIC, SNL DataSource State # of Branches Deposits2 State Rank North Carolina1 356 $ 28.7 bn Virginia 352 $ 22.6 bn Florida 322 $ 17.5 bn Pennsylvania 263 $ 14.8 bn Georgia 156 $ 12.4 bn Maryland 165 $
Slide 7: Premier Model for Community Banking… and Diverse Non-Bank Businesses
7 Premier Model for Community Banking… 26 Banking Regions Local decision- making Centralized support system Foundation for our relationship management culture model … and Diverse Non-Bank Businesses
Slide 8: Diversification Drives Revenue and Productivity
8 Diversification Drives Revenue and Productivity **Based on segment revenues, excluding other, treasury and corporate for quarter ending 09/30/2016 2.09% 1.73% 1.68% Superior Performance… BB&T National Peers Largest 4 Banks Revenue/average assets 10-year average 2006-2015 …With Less Volatility1 0.3
Slide 9: Loans Reflect Slower Commercial Growth and Targeted Runoff
9 Loans Reflect Slower Commercial Growth and Targeted Runoff1 Average loans and leases held for investment increased 0.3% annualized in 3Q16 vs. 2Q16 Excluding residential mortgage and sales finance, average loans held for investment grew approximately 2.2% annualized vs. 2Q16 Experienced loan
Slide 10: Portfolio De-Risking and Re-positioning Largely Complete
10 Portfolio De-Risking and Re-positioning Largely Complete Source: Y-9C via SNL, RMO Analytics and Business Intelligence. Excludes loans held for sale. Peers include: CFG, CMA, FITB, HBAN, KEY, MTB, PNC, RF, STI, USB, WFC, ZION BB&T Loan Portfolio Mix Improvement Over Time Over the Long-term C&I CR
Slide 11: Executing on Credit Portfolio Strategies
11 Executing on Credit Portfolio Strategies Allocating more capital to risk / return advantaged business units Improving the risk adjusted return within business units Increasing client profitability and retention by satisfying all of their financial needs Other lending subsidiaries – Growth of 22
Slide 12: Noninterest-Bearing Deposits Reflect Strong Growth
12 Noninterest-Bearing Deposits Reflect Strong Growth $143.8 $148.5 $149.9 $160.3 $159.5 0.24% 0.24% 0.25% 0.23% 0.23% 0.20% 0.25% 0.30% 0.35% 0.40% $120.0 $130.0 $140.0 $150.0 $160.0 $170.0 3Q15 4Q15 1Q16 2Q16 3Q16 Total Interest-Bearing Deposit Cost Total deposits averaged $159.5 billion, a decr
Slide 13: Credit Quality Reflects Seasonal Increase
13 Credit Quality Reflects Seasonal Increase1 Credit quality results reflect expected seasonal increase in consumer-related portfolios Net charge-offs totaled $130 million, up 9 bps vs. 2Q16 Loans 90 days or more past due2 decreased 3.0% vs. 2Q16 Loans 30-89 days past due2 increased 7.2% vs.
Slide 14: Net Interest Margin Decreases Slightly to 3.39%
14 Net Interest Margin Decreases Slightly to 3.39% 3.35% 3.35% 3.43% 3.41% 3.39% 3.15% 3.12% 3.18% 3.16% 3.17% 2.96% 2.96% 2.99% 2.95% 2.96% 2.50% 3.00% 3.50% 4.00% 3Q15 4Q15 1Q16 2Q16 3Q16 Reported NIM Core NIM Peers 3Q16 NIM decreased 2 bps due to: Lower investment portfolio yields, down 15 bp
Slide 15: Purchase Accounting Summary
15 Purchase Accounting Summary ($ in millions) Acc. Yield1 PCI Loans PA Mark2 Non-PCI Loans PA Mark3 Liabilities PA Mark4 Securities Balance, June 30, 2016 $ 453 $ 355 $ 61 $ 412 Interest income: Scheduled accretion (38) (23) (7) (8) Cash recoveries/early payoffs (14) (17) - - Total interest income
Slide 16: Superior Fee Income and Efficiency Relative to Peers
16 4Q16 management expectations Total noninterest income expected to be relatively flat 40.3% 40.3% 39.9% 41.2% 41.9% 38.3% 39.1% 36.2% 37.5% 38.5% 35.0% 37.5% 40.0% 42.5% 45.0% 3Q15 4Q15 1Q16 2Q16 3Q16 Fee Income Ratio BBT Peers 1 See non-GAAP reconciliations included in the attached Appendix P
Slide 17: Balancing Expense Objectives
17 Balancing Expense Objectives Strategic Investment Priorities Digital transformation Real-time payments “Zelle” Brand / Social Media Marketing Corporate Lending / Wealth Cybersecurity Compliance Cost Savings Opportunities Complete National Penn and Swett & Crawford integrations Space consolidation
Slide 18: Capital and Liquidity Remain Strong
18 Capital and Liquidity Remain Strong 10.1% 10.3% 10.4% 10.0% 10.1% 9.0% 9.5% 10.0% 10.5% 11.0% 3Q15 4Q15 1Q16 2Q16 3Q16 The common equity tier 1 ratio was 9.9% fully phased-in BB&T’s 3Q16 LCR was 122% BB&T’s 3Q16 liquid asset buffer was 13.6% (high quality liquid assets as a percentage of to
Slide 19: Well-Positioned For the Future
19 Well-Positioned For the Future Pennsylvania integration going well Diversification drives long-term stability / less volatility Maintaining long-term performance advantages Most diversified insurance brokerage platform in the industry Achieving targeted cost savings / intensifying focus
Slide 20: Culture Matters – Values Are Consistent and Important
20 Value System Revenues Superior Shareholder Long-term Returns Value System Attract / Train and Retain the Right People Perfect Client Experience Culture Matters – Values Are Consistent and Important
Slide 21: Slide 21
Slide 22: Appendix
Appendix
Slide 23: Non-GAAP Reconciliations
23 1 BB&T’s management believes investors use this measure to evaluate the return on average common shareholders’ equity without the impact of intangible assets and their related amortization. Non-GAAP Reconciliations1 (Dollars in millions) Quarter Ended Sept. 30 June 30 March 31 Dec. 31 Sept. 30 Re
Slide 24: Non-GAAP Reconciliations
Non-GAAP Reconciliations1 24 1 BB&T’s management uses these measures in their analysis of the Corporation’s performance and believes these measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods, as well as demonstrating the effects of s
Slide 25: Non-GAAP Reconciliations
Non-GAAP Reconciliations1 Quarter Ended Reported net interest margin vs. core net interest margin Sept. 30 2016 June 30 2016 March 31 2016 Dec. 31 2015 Sept. 30 2015 Reported net interest margin - GAAP 3.39% 3.41% 3.43% 3.35% 3.35% Adjustments to interest income for assets acquired: Effect of securi
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