Slide 1: Third Quarter 2012 Earnings Conference Call
Best Bank In Town Since 1872 Third Quarter 2012 Earnings Conference Call October 18, 2012 Kelly S. King Chairman and Chief Executive Officer Daryl N. Bible Chief Financial Officer
Slide 2: Non-GAAP Information
2 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 analy
Slide 3: 2012 Third Quarter Performance Highlights
3 2012 Third Quarter Performance Highlights 1 1 Linked quarter growth rates are annualized, except for credit metrics. 2 Available to common shareholders. 3 Fully taxable equivalent. Includes acquisitions and excludes securities gains or losses, offsets to provisions for covered as set s and other s
Slide 4: Unusual Items Affecting Earnings
Unusual Items Affecting Earnings $ in millions, except per share impact 4 Pretax After Tax EPS Impact Merger - related and restructuring charges 1 $ 43 $ 27 $ 0.04 Loan processing expenses 2 28 17 0.02 1 Related primarily to BankAtlantic acquisition. No material impact expected in 4Q12. 2 Related to
Slide 5: Broad-based Loan Growth
5 Broad - based Loan Growth $103.9 $105.8 $107.5 $109.2 $112.7 $100 $105 $110 $115 3Q11 4Q11 1Q12 2Q12 3Q12 Average Loans Held for Investment ($ in billions) » Experienced strong growth in C&I, mortgage, revolving credit, direct retail, sales finance and other lending subsidiaries (e.g. insurance pr
Slide 6: Improved Deposit Mix and Cost
6 Improved Deposit Mix and Cost » Strong organic growth in noninterest - bearing deposits, up 25.0% » Effectively reduced average deposit cost from 0.65% in 3Q11 to 0.42% in 3Q12 » Average CD maturity is 12 months » Management currently expects more modest deposit growth in 4Q12 with continued impro
Slide 7: Diverse Sources of Revenue
Diverse Sources of Revenue » Expanding through additional commercial branches in newer markets » Expanding corporate banking initiative in key national markets; adding new vertical lending team » Executing wealth acceleration plans » Adding capacity in small business, wealth and the broker / dealers
Slide 8: Broad-based Credit Improvement
8 Broad - based Credit Improvement 1 $2,969 $2,450 $2,256 $1,897 $1,718 $1,500 $2,000 $2,500 $3,000 3Q11 4Q11 1Q12 2Q12 3Q12 Nonperforming Assets ($ in millions) » 9.4% reduction in NPAs vs. 2Q12 □ Commercial NPLs down 8.8% □ Foreclosed real estate down 37.1% » Lowest NPAs in 4 years » Management ex
Slide 9: Foreclosed Real Estate and Losses Decrease
9 Foreclosed Real Estate and Losses Decrease 1 $950 $536 $378 $221 $139 $168 $346 $92 $72 $54 - $100 $0 $100 $200 $300 $400 $0 $200 $400 $600 $800 $1,000 3Q11 4Q11 1Q12 2Q12 3Q12 Foreclosed Real Estate ($ in millions) Foreclosed Real Estate Foreclosed Property Expense » Significant reduction in fore
Slide 10: Margin Remains Strong
4.09% 4.02% 3.93% 3.95% 3.94% 3.41% 3.44% 3.41% 3.45% 3.51% 3.00% 3.50% 4.00% 4.50% 3Q11 4Q11 1Q12 2Q12 3Q12 Net Interest Margin Reported NIM Core NIM 1 10 Margin Remains Strong » Management expects the margin to be in the mid 3.70s% range in 4Q12 driven by: □ Lower rates on new earning assets □ Hig
Slide 11: Low-Risk Investing Strategy
11 Low - Risk Investing Strategy UST & Federal Agency 7.6% Agency MBS Passthroughs 37.1% Agency MBS CMOs 42.8% States and political subdivisions 5.5% Covered 4.2% Non Agency MBS 0.9% Other 1.9% Portfolio Composition » BB&T maintains an asset sensitive interest rate risk position » We are slightly mo
Slide 12: Fee Income Growth
12 Fee Income Growth 39.3% 38.4% 41.0% 42.4% 42.4% 32.0% 36.0% 40.0% 44.0% 48.0% 3Q11 4Q11 1Q12 2Q12 3Q12 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 L
Slide 13: Noninterest Expenses and Efficiency
13 Noninterest Expenses and Efficiency 3Q12 3Q12 v. 2Q12 2 Increase (Decrease) 3Q12 v. 3Q11 Increase (Decrease) Personnel expense $ 797 11.3 % 18.8 % Foreclosed property expense 54 (99.5) (67.9) Occupancy and equipment expense 166 17.5 9.9 Loan processing expenses 85 147.6 54.5 Regulatory charges 40
Slide 14: Capital Strength
14 Capital Strength 1 9.8% 9.7% 10.0% 9.7% 9.5% 8.0% 9.0% 10.0% 11.0% 3Q11 4Q11 1Q12 2Q12 3Q12 Basel I Tier 1 Common Ratio 1 Current quarter regulatory capital information is preliminary. Risk - weighted assets are determined based on regulatory capital r equirements. Under the regulatory framework
Slide 15: Community Banking Segment
15 Community Banking Segment Net Interest Income Noninterest Income 1 Loan Loss Provision Noninterest Expense 2 Income Tax Expense Segment Net Income $ 851 329 92 695 143 $ 250 $ (5) 6 (98) (17) 43 $ 73 $ (40) 14 (50) (89) 41 $ 72 Total Noninterest Bearing Growth Noninterest Bearing / Total Deposits
Slide 16: Residential Mortgage Banking Segment
16 Net Interest Income Noninterest Income 1 Loan Loss Provision Noninterest Expense 2 Income Tax Expense Segment Net Income Retail Originations Correspondent Originations Total Originations Loan Sales Loans Serviced for others (EOP) 30+ Days Delinquent (HFI only) % Non - Accrual (HFI only) Net Charg
Slide 17: Dealer Financial Services Segment
17 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&T’s market and n
Slide 18: Specialized Lending Segment
18 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 finance Net Inter
Slide 19: Insurance Segment
19 1 Noninterest Income includes intersegment net referral fee income. 2 Noninterest Expense includes intersegment net referral fee expense, amortization of intangibles, and allocated corporate expe nse . 3 Nine months of current year over nine months of prior year. Insurance Segment Comments Highli
Slide 20: Financial Services Segment
20 Financial Services Segment Comments Highlighted Metrics Net Interest Income Noninterest Income 1 Loan Loss Provision Noninterest Expense 2 Income Tax Expense Segment Net Income $ 2 15 20 (18) 7 $ 8 $ 16 12 11 15 1 $ 1 Average Loan Balances Average Deposits Total Assets Invested Operating Margin P
Slide 21: Best Bank In Town
Best Bank In Town Since 1872 m7
Slide 22: Appendix
Appendix
Slide 23: Non-GAAP Capital Measures
23 Non - GAAP Capital Measures (Dollars in millions, except per share data) As of / Quarter Ended Sept 30 2012 June 30 2012 March 31 2012 Dec 31 2011 Sept 30 2011 Selected Capital Information 1 Risk - based capital Tier 1 $ 13,590 $ 12,383 $ 15,207 $ 14,913 $ 14,696 Total 17,533 16,433 19,342 18,802
Slide 24: Non-GAAP Capital Measures
24 Non - GAAP Capital Measures (Dollars in millions, except per share data) As of / Quarter Ended Sept 30 2012 June 30 2012 March 31 2012 Dec 31 2011 Sept 30 2011 Calculations of Tier 1 common equity and tangible assets and related measures: Tier 1 equity $ 13,590 $ 12,383 $ 15,207 $ 14,913 $ 14,696
Slide 25: Non-GAAP Capital Measures: Basel III Estimates
Non - GAAP Capital Measures 1 1 The Basel III calculations are non - GAAP measures and reflect adjustments for the related elements as proposed by regulatory auth orities, which are subject to change. BB&T management uses these measures to assess the quality of capital and believes that investors ma
Slide 26: Non-GAAP Reconciliations
26 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 Sept 30 2012 June 30 2012 March 31 2012 Dec 31 2011 Sept 30
Slide 27: Non-GAAP Reconciliations
27 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. 3 These asset quality ratios have been adjusted to remove the impact of covered l
Slide 28: Non-GAAP Reconciliations: Efficiency and Fee Income Ratios
28 Non - GAAP Reconciliations Quarter Ended Efficiency and Fee Income Ratios 1 Sept 30 2012 June 30 2012 March 31 2012 Dec 31 2011 Sept 30 2011 Efficiency ratio – GAAP 61.6 % 57.9 % 59.0 % 67.1 % 66.1 % Effect of securities gains (losses), net - - (0.2) 2.4 (1.0) Effect of merger - related and restr
Slide 29: Non-GAAP Reconciliations: Return on Tangible Equity
29 Non - GAAP Reconciliations 1 BB&T’s management believes investors use this measure to evaluate the return on average common shareholders’ equity without t he impact of intangible assets and their related amortization. (Dollars in millions) Quarter Ended Sept 30 June 30 March 31 Dec 31 Sept 30 Ret
Slide 30: Non-GAAP Reconciliations: Net Interest Margin
30 Non - GAAP Reconciliations Quarter Ended Reported net interest margin vs. core net interest margin 1 Sept 30 2012 June 30 2012 March 31 2012 Dec 31 2011 Sept 30 2011 Reported net interest margin - GAAP 3.94 % 3.95 % 3.93 % 4.02 % 4.09 % Adjustments to net interest income for Colonial assets: Effe
Slide 31: Best Bank In Town
Best Bank In Town Since 1872 nu