Truist Financial Corporation · NYSE:TFC
Truist Financial — BB&T — Q3 2015 Earnings Presentation
29 slides from Truist Financial's earnings presentation, Oct 15, 2015
Slide 1: BB&T Third Quarter 2015 Earnings Conference Call
BB&T Third Quarter 2015 Earnings Conference Call October 15, 2015 Kelly S. King Chairman and Chief Executive Officer Daryl N. Bible Chief Financial Officer
Slide 2: Forward-Looking Information
Forward - Looking Information This presentation contains “forward - looking statements” within the meaning of the Private Securities Litigation Reform Act of 19 95, regarding the financial condition, results of operations, business plans and the future performance of BB&T that are based on the belie
Slide 3: 2015 Third Quarter Performance Highlights
3 3 2015 Third Quarter Performance Highlights 1 ▪ Net income totaled $492 million 2 ▪ Diluted EPS totaled $0.64, up an annualized 12.8% vs. 2Q15 ▪ Adjusted diluted EPS totaled $ 0.70 excluding merger - related charges, up an annualized 5.7% vs. 2Q15 ▪ Adjusted ROA 4 improved to 1.13% and adjusted RO
Slide 4: Seasonally Stronger Loan Growth
4 4 Seasonally Stronger Loan Growth 1 ▪ Average loan growth, excluding Susquehanna and The Bank of Kentucky, was 3.2% annualized and 6.7% excluding Residential mortgage, vs. 2Q15 ▪ Experienced strong loan growth vs. 2Q15 in several categories (excludes acquisitions): Grandbridge, up 83.4% annualiz
Slide 5: Improved Deposit Mix and Cost
5 5 Improved Deposit Mix and Cost $130.6 $130.3 $129.5 $131.9 $ 143.8 1 0.26% 0.25% 0.25% 0.24% 0.24% 0.20% 0.25% 0.30% 0.35% 0.40% $100.0 $110.0 $120.0 $130.0 $140.0 $150.0 3Q14 4Q14 1Q15 2Q15 3Q15 Total Interest-Bearing Deposit Cost ▪ Average deposits grew $1.2 billion, or 3.6% annualized, excludi
Slide 6: Credit Quality Remains Excellent
6 6 Credit Quality Remains Excellent 1 ▪ Loans 90 days or more past due and still accruing increased 42.9% vs. 2Q15 Excluding Susquehanna, loans 90 days or more past due decreased 10.5% 3 ▪ Loans 30 - 89 days increased 8.6% vs. 2Q15 Excluding Susquehanna, loans 30 - 89 days past due increased 5.
Slide 7: Allowance Coverage Ratios Remain Strong
7 7 Allowance Coverage Ratios Remain Strong 2.67x 3.21x 3.60x 3.71x 3.44x 1.92x 2.39x 2.45x 2.55x 2.49x 0.00 1.00 2.00 3.00 4.00 5.00 3Q14 4Q14 1Q15 2Q15 3Q15 ALLL to Net Charge-offs ALLL to NPLs HFI ▪ Coverage ratios remain strong at 3.44x and 2.49x for the allowance to net charge - offs and NPLs,
Slide 8: Net Interest Margin Increases
8 8 Net Interest Margin Increases 3.38% 3.36% 3.33% 3.27% 3.35% 3.20% 3.20% 3.18% 3.16% 3.15% 2.50% 3.00% 3.50% 4.00% 3Q14 4Q14 1Q15 2Q15 3Q15 Reported NIM Core NIM ▪ 3 Q15 NIM increased 8 bps vs. 2Q15 as a result of: Purchase accounting impact (+9 bps) Lower yields on new loans and other earnin
Slide 9: Fee Income Seasonally Lower
9 9 Fee Income Seasonally Lower ▪ Insurance income declined $68 million vs. 2Q15 primarily due to seasonality, a softer insurance pricing market and the sale of American Coastal in the second quarter ▪ Mortgage banking income decreased $19 million vs. 2Q15 primarily reflecting lower net mortgage ser
Slide 10: Noninterest Expense Reflects Acquisitions
10 10 Noninterest Expense Reflects Acquisitions 3Q15 3Q15 v. 2Q15 2 Increase (Decrease) 3Q15 v. 3Q14 Increase (Decrease) Personnel expense $ 882 8.3 % 10.9 % Occupancy and equipment expense 183 40.6 7.6 Loan - related expense 38 10.7 (41.5) Software expense 50 34.5 13.6 Professional services 42 79.3
Slide 11: Capital and Liquidity Strength
11 11 Capital and Liquidity Strength 10.5% 10.6% 10.5% 10.4% 10.1% 9.0% 10.0% 11.0% 3Q14 4Q14 1Q15 2Q15 3Q15 ▪ The Susquehanna transaction used approximately 0.6% in Common Equity Tier 1 capital ▪ The fully phased - in Common Equity Tier 1 ratio was 9.8% ▪ BB&T’s 3Q15 LCR was 136% driven by strong d
Slide 12: Community Banking Segment
12 12 ($ in millions) Inc/(Dec) vs 2Q15 Inc/(Dec) vs 3Q14 3Q15 4 Comments Net Interest Income Noninterest Income 1 Provision for Credit Losses Noninterest Expense 2 Income Tax Expense Segment Net Income Highlighted Metrics $ 772 339 4 690 153 $ 264 $ 35 10 (7) 5 17 $ 30 $ 39 - (48) 29 22 $ 36 ($ in
Slide 13: Residential Mortgage Banking Segment
13 13 Retains and services mortgage loans originated by the Residential Mortgage Lending Division and through its referral relation shi p with the Community Bank and referral partners as well as those purchased from various correspondent originators ($ in millions) Inc /(Dec) vs 2Q15 Inc/(Dec) vs 3Q
Slide 14: Dealer Financial Services Segment
14 14 Primarily originates indirect loans to consumers on a prime and nonprime basis for the purchase of automobiles and other vehi cle s through approved dealers both in BB&T’s market and nationally (through Regional Acceptance Corporation) Comments 4 ($ in millions) Inc /(Dec) vs 2Q15 Inc /(Dec) v
Slide 15: Specialized Lending Segment
15 15 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 Comments 4 ($ in millions) Inc/(De
Slide 16: Insurance Services Segment
16 16 Comments 4 ($ in millions) Inc/(Dec) vs 2Q15 Inc/(Dec) 3Q14 3Q15 8 Net Interest Income Noninterest Income 1 Provision for Credit Losses Noninterest Expense 2 Income Tax Expense Segment Net Income Highlighted Metrics Noninterest Income Number of Stores 3 EBITDA Margin 6 3Q15 Like Provides prope
Slide 17: Financial Services Segment
17 17 Provides trust services, wealth management, investment counseling, asset management, estate planning, employee benefits, corporate banking, and capital market services to individuals, corporations, governments, and other organizations Comments 4 ($ in millions) Inc/(Dec) vs 2Q15 Inc/(Dec) vs 3
Slide 18: 18
18
Slide 19: Appendix
Appendix
Slide 20: Capital Measures
Capital Measures 1 (Dollars in millions, except per share data) 1 2 Current quarter regulatory capital is preliminary Risk - weighted assets are determined based on regulatory capital requirements in effect for the period presented 3 4 Tangible common equity and related ratios are non - GAAP measure
Slide 21: Non-GAAP Reconciliations
Non - GAAP Reconciliations 1 21 (Dollars in millions, except per share data) 1 2 Current quarter regulatory capital is preliminary Tangible common equity and related ratios are non - GAAP measures. BB&T's management uses these measures to assess the quality of capital and believes that investors may
Slide 22: Non-GAAP Reconciliations
Non - GAAP Reconciliations 1 22 1 BB&T’s management uses these measures in their analysis of the Corporation’s performance and believes these measures pro vide a greater understanding of ongoing operations and enhance comparability of results with prior periods, as well as demonstrating the effects
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 withou t t he impact of intangible assets and their related amortization. Non - GAAP Reconciliations 1 (Dollars in millions) Quarter Ended Sept. 30 June 30 March 31 2015 Dec. 31 2
Slide 24: Non-GAAP Reconciliations
Non - GAAP Reconciliations 1 Quarter Ended Reported net interest margin vs. core net interest margin Sept. 30 2015 June 30 2015 March 31 2015 Dec. 31 2014 Sept. 30 2014 Reported net interest margin - GAAP 3.35% 3.27% 3.33% 3.36% 3.38% Adjustments to interest income for assets acquired: Effect of sec
Slide 25: Non-GAAP Reconciliations
Non - GAAP Reconciliations 1 25 1 BB&T’s management uses these measures in their analysis of the Corporation’s performance and believes these measures provide a g reater understanding of ongoing operations and enhance comparability of results with prior periods, as well as demonstrating the effects
Slide 26: Non-GAAP Reconciliations
Non - GAAP Reconciliations 1 26 (Dollars in millions) As of Loans 30 - 89 days past due as a % of loans held for investment Sept. 30 2015 June 30 2015 % Change Reported $905 $833 8.6 % Less: the impact of Susquehanna (30) - - Loans 30 - 89 days past due loans held for investment, adjusted $875 $833
Slide 27: Non-GAAP Reconciliations
Non - GAAP Reconciliations 1 27 (Dollars in millions) 1 BB&T’s management uses these measures in their analysis of the Corporation’s performance and believes these measures provide a g reater understanding of ongoing operations and enhance comparability of results with prior periods, as well as demo
Slide 28: Non-GAAP Reconciliations
Non - GAAP Reconciliations 1 28 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 o
Slide 29: Non-GAAP Reconciliations
Non - GAAP Reconciliations 1 29 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 o