Investor Presentation

Transcription

1 Investor Presentation First Quarter 2017 Daryl N. Bible Chief Financial Officer

2 Forward-Looking Information This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, regarding the financial condition, results of operations, business plans and the future performance of BB&T. Forward-looking statements are not based on historical facts but instead represent management's expectations and assumptions regarding BB&T's business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances difficult to predict. BB&T's actual results may differ materially from those contemplated by the forward-looking statements. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "projects," "may," "will," "should," "could," and other similar expressions are intended to identify these forward-looking statements. Such statements are subject to factors that could cause actual results to differ materially from anticipated results. While there is no assurance any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation: general economic or business conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit, insurance or other services; disruptions to the national or global financial markets, including the impact of a downgrade of U.S. government obligations by one of the credit ratings agencies, the adverse effects of economic instability and recessionary conditions or market disruptions in Europe, China or other global markets, including, but not limited to the potential exit of the United Kingdom from the European Union; changes in the interest rate environment, including interest rate changes made by the Federal Reserve or the possibility of a negative interest rate scenario, as well as cash flow reassessments may reduce net interest margin and/or the volumes and values of loans made or held as well as the value of other financial assets held; competitive pressures among depository and other financial institutions may increase significantly; legislative, regulatory or accounting changes, including changes resulting from the adoption and implementation of the Dodd-Frank Act may adversely affect the businesses in which BB&T is engaged; local, state or federal taxing authorities may take tax positions that are adverse to BB&T; a reduction may occur in BB&T's credit ratings; adverse changes may occur in the securities markets; competitors of BB&T may have greater financial resources or develop products that enable them to compete more successfully than BB&T and may be subject to different regulatory standards than BB&T; cybersecurity risks, including "denial of service," "hacking" and "identity theft," could adversely affect BB&T's business and financial performance or reputation, and BB&T could be liable for financial losses incurred by third parties due to breaches of data shared between financial institutions; natural or other disasters, including acts of terrorism, could have an adverse effect on BB&T, materially disrupting BB&T's operations or the ability or willingness of customers to access BB&T's products and services; costs related to the integration of the businesses of BB&T and its merger partners may be greater than expected; failure to execute on strategic or operational plans, including the ability to successfully complete and/or integrate mergers and acquisitions or fully achieve expected cost savings or revenue growth associated with mergers and acquisitions within the expected time frames could adversely impact financial condition and results of operations; significant litigation and regulatory proceedings could have a material adverse effect on BB&T; unfavorable resolution of legal proceedings or other claims and regulatory and other governmental investigations or other inquiries could result in negative publicity, protests, fines, penalties, restrictions on BB&T's operations or ability to expand its business and other negative consequences, all of which could cause reputational damage and adversely impact BB&T's financial conditions and results of operations; risks resulting from the extensive use of models; risk management measures may not be fully effective; deposit attrition, customer loss and/or revenue loss following completed mergers/acquisitions may exceed expectations; higher-than-expected costs related to information technology infrastructure or a failure to successfully implement future system enhancements could adversely impact BB&T's financial condition and results of operations and could result in significant additional costs to BB&T; and widespread system outages, caused by the failure of critical internal systems or critical services provided by third parties, could adversely impact BB&T's financial condition and results of operations. Capital ratios are preliminary. 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 analysis of the Corporation's performance and the efficiency of its operations. Management believes these non-gaap measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods as well as demonstrate the effects of significant gains and charges in the current period. The company believes a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. BB&T's management believes investors may use these non-gaap financial measures to analyze financial performance without the impact of unusual items that may obscure trends in the company's underlying performance. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-gaap performance measures that may be presented by other companies. Below is a listing of the types of non-gaap measures used in this news release: Tangible common equity and related measures are non-gaap measures that exclude the impact of intangible assets and their related amortization. These measures are useful for evaluating the performance of a business consistently, whether acquired or developed internally. The return on average risk-weighted assets is a non-gaap measure. BB&T's management uses these measures to assess the quality of capital and returns relative to balance sheet risk and believes investors may find them useful in their analysis of the Corporation. The ratio of loans greater than 90 days and still accruing interest as a percentage of loans held for investment has been adjusted to remove the impact of loans that were covered by FDIC loss sharing agreements and purchased credit impaired ("PCI") loans as well as government guaranteed loans. Management believes their inclusion may result in distortion of these ratios such that they might not be comparable to other periods presented or to other portfolios not impacted by purchase accounting or reflective of asset collectibility. The adjusted efficiency ratio is non-gaap in that it excludes securities gains (losses), amortization of intangible assets, merger-related and restructuring charges and other selected items. BB&T's management uses this measure in their analysis of the Corporation's performance. BB&T's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges. Core net interest margin is a non-gaap measure that adjusts net interest margin to exclude the impact of interest income and funding costs associated with loans and securities acquired in the Colonial acquisition and PCI loans acquired from Susquehanna and National Penn. Core net interest margin is also adjusted to remove the purchase accounting marks and related amortization for non-pci loans, deposits and long-term debt acquired from Susquehanna and National Penn. BB&T's management believes the adjustments to the calculation of net interest margin for certain assets and deposits acquired provide investors with useful information related to the performance of BB&T's earning assets. A reconciliation of these non-gaap measures to the most directly comparable GAAP measure is included in BB&T's Fourth Quarter 2016 Quarterly Performance Summary, which is available at BBT.com.

3 Agenda BB&T s vision and mission BB&T overview Revenue diversification BB&T Insurance Holdings First quarter outlook 2016 performance vs. peers Digital strategies Investing in our communities and environment Strong corporate governance Well-positioned for the future 3

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5 Among Leaders in Key Performance Measures Most Recent Quarter Results BB&T Peer Rank Return on average assets 1.16% Return on average tangible common equity % 2 nd 2 nd Return on risk - weighted assets 1.45% 2 nd Net interest margin 3.32% 2 nd GAAP efficiency 61.1% Adjusted efficiency % 5 th 4 th Dividend yield 2.55% 2 nd Nonperforming assets as a % of loan-related assets 0.57% 1 st 1 See non-gaap reconciliations included in the attached Appendix Peers include CFG, CMA, FITB, HBAN, KEY, MTB, PNC, RF, STI, USB, WFC and ZION; RWA excludes MTB and WFC Source: SNL and Company Reports 5

6 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 markets. Recognizing value is a function of quality to price, our focus is on delivering high quality client service resulting in the Perfect Client Experience. Our over-arching purpose is to achieve our vision and mission, consistent with our values, with the ultimate goal of maximizing shareholder returns. 6

7 BB&T Corporation: A Growing Franchise 8 th Largest U.S. Financial Institution 2 State # of Deposits Branches 2 State Rank North Carolina $ 28.7 bn Virginia 344 $ 22.6 bn Florida 318 $ 17.5 bn Pennsylvania 262 $ 14.8 bn Georgia 155 $ 12.4 bn Maryland 165 $ 10.1 bn South Carolina 111 $ 7.9 bn Kentucky 110 $ 6.3 bn Texas 124 $ 5.8 bn West Virginia 73 $ 5.0 bn Alabama 84 $ 4.0 bn New Jersey 33 $ 2.5 bn Tennessee 48 $ 2.4 bn District of Columbia 13 $ 1.2 bn Indiana 2 NM Ohio 2 NM NM NM Total # of Branches 2,196 1 Excludes home office deposits 2 Deposit Market Share data as of December 31, 2016 Source: FactSet, FDIC, SNL DataSource 7

8 Premier Model for Community Banking 26 Banking Regions Local decisionmaking Centralized support system Foundation for our relationship management culture model and Diverse Non-Bank Businesses 8

9 Diversification Drives Revenue and Productivity Revenue/average assets 10-year average Revenue Diversification by Segment** Superior Performance Insurance Holdings 16% 2.0% 1.7% 1.6% Financial Services 15% Community Banking 48% BB&T National Peers Largest 4 Banks Specialized Lending 7% Revenue/average assets 10-year standard deviation With Less Volatility 1 Dealer Financial Services 7% Residential Mortgage Banking 7% 0.3% 0.4% 0.6% **Based on segment revenues, excluding other, treasury and corporate for period ending 12/31/2016 Data per S&P Global as of 12/31/2016 National peer group: CFG, CMA, FITB, HBAN, KEY, MTB, PNC, RF, STI, USB, WFC and ZION Largest 4 BHCs: BAC, C, JPM, WFC 1 Volatility measured as standard deviation of PPNR/Average Asset ratios BB&T National Peers Largest 4 Banks 9

10 Portfolio De-Risking and Re-positioning Largely Complete BB&T Loan Portfolio Mix Improvement Over Time Growing Risk/Return Advantaged Portfolios C&I Over the Long - term - term CRE IPP CRE C&D Dealer floor plan lending Direct retail lending Sales finance Revolving credit Residential mortgage Other lending subsidiaries 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 10

11 Purchase Accounting Summary ($ in millions) Acc. Yield 1 PCI Loans PA Mark 2 Non - PCI Loans PA Mark 3 Liabilities PA Mark 4 Securities Balance, Sept. 30, 2016 $ (421) $ (318) $ (54) $ (404) Interest income: Normal accretion Cash recoveries/early payoffs/ duration adjustments (23) Total interest income (14) Other (36) Balance, Dec. 31, 2016 $ (408) $ (285) $ (48) $ (418) NBV/amortized cost of related assets/liabilities at Dec. 31, 2016 $ 910 $ 13,866 $ 2,938 $ Accretable yield represents the difference between total expected cash flows and the carrying value of the related loan pools. It is recognized using level-yield method over the remaining expected life of the pools (subject to future cash-flow reassessments). 2 Purchase accounting loan marks on Susquehanna and National Penn non-pci loans represents the total mark, including credit and interest, and are recognized using level-yield method over the remaining life of the individual loans or recognized in full in the event of prepayment. Not subject to future cash flow reassessments. 3 Purchase accounting marks on liabilities represents interest rate marks on Susquehanna and National Penn time deposits and long-term debt and are recognized using level-yield method over the term of the liability. 4 Purchase accounting securities marks represents securities acquired in the Colonial acquisition and are recognized using level-yield method over the expected maturity of the underlying securities. Subject to reassessment of prepayments, as applicable. The mark is also used for payment shortfalls and credit losses. 11

12 Insurance Holdings Provides revenue diversification and stability in down markets Retail BB&T Insurance Services, Inc. BB&T Insurance Services of California, Inc. McGriff, Seibels and Williams, Inc. BB&T Assurance Wholesale CRC Insurance Services Inc. Delivery Channels & Subsidiaries Swett & Crawford AmRisc, LLP Crump Life Insurance Services, Inc. 5 th largest broker in the US and 6 th largest in the World FTE count = 7,004 BB&T Insurance Services 26% BB&T Insurance Services of California 5% McGriff 15% 2016 Revenue Mix Assurance 1% Crump 11% 47% Retail / 53% Wholesale CRC / SC 1 35% AmRisc 7% 1 Swett & Crawford was acquired April 1st, 2016 Based on segment revenues, excluding other, treasury and corporate for quarter ending 12/31/

13 Insurance Holdings - Diversification of BB&T s Revenues Revenues are not interest sensitive, providing stability to BB&T s revenues Not subject to the dynamics of credit cycles contributes to our strong CCAR stress scenarios Provides broader product offering to clients and improves the ability to increase share of wallet complementary financial product, valued risk management expertise Increases stability of BB&T s revenues as insurance contribution has increased in recent years commercial/corporate client penetration; Wealth/Life partnership 60% Revenue Contribution % 30% 33% 35% 39% 43% 40% 39% 20% 12% 12% 14% 16% 18% 17% 16% 0% % of Core Non-Interest Income % of Core Revenue Source: Wells Fargo Equity Research 13

14 Insurance Holdings Performance Peer Comparison 25.0% EBITDA margins % 20.0% 21.5% 19.6% 19.3% 20.2% 21.0% 20.4% 21.4% 19.5% 20.3% 18.6% 17.3% 15.0% BB&T Peer Median Note: Peers include AJ Gallagher, Aon, Brown & Brown, Marsh & McLennan and Willis. (1): EBITDA margin calculated as EBITDA as a percentage of total revenues. BB&T EBITDA margin excludes American Coastal, one time events which effected 2014 results, 2015 merger related charges, and includes 45.75% of Intercompany charges in FY2011 and FY through YTD 9/30/16 Source: SNL, Company filings, 14

15 Strong Funding and Liquidity $25 $20 $15 $10 $5 $0 Long-term Funding $ in billions $19.0 $17.5 $17.5 $17.6 $16.4 $3.1 $3.1 $2.4 $2.4 $3.1 $4.4 $6.1 $5.3 $4.5 $4.3 $1.2 $1.2 $1.2 $1.2 $1.2 $8.8 $7.8 $8.6 $8.6 $9.5 4Q15 1Q16 2Q16 3Q16 4Q16 Parent Sources of Liquidity Cash on Deposit at Bank = $6.7 billion Annual Expected Dividends from Bank = $1.4 billion Parent Uses of Liquidity Annual Debt Service and Retirements = $2.1 billion Annual Preferred Dividends = $174 million Annual Common Dividends = $971 million HoldCo Sr Bank Sr HoldCo Subordinated Bank Subordinated 15

16 Among the Lowest Debt Costs $100 Global Excess Liquidity Sources ($ in billions) 30 Parent Company Time to Required Funding (months) $75 $50 $25 $77.6 $79.5 $79.4 $70.7 $77.4 $19.0 $18.4 $19.3 $19.4 $19.4 $28.7 $28.5 $28.2 $24.4 $25.5 $26.2 $30.5 $31.7 $31.8 $ $0 4Q15 1Q16 2Q16 3Q16 4Q Q15 1Q16 2Q16 3Q16 4Q16 Borrowing Capacity at Discount Window Securities Available and Eligible as Collateral FHLB Borrowing Available Capacity 16

17 First Quarter 2017 Outlook Loans Average loans are expected to be flat to up slightly vs. 4Q16 due largely to seasonality Credit Quality 1Q17 net charge-offs to be in the range of 35 to 45 bps NPA levels expected to remain in a similar range in 1Q17 Continue to expect the loan loss provision to approximate charge-offs in addition to providing for incremental loan growth Core net interest margin expected to increase 8 10 bps GAAP net interest margin expected to increase bps Margin Fee Income Total noninterest income expected to be relatively flat vs. 4Q16 Expenses Excluding merger-related and restructuring charges and the FHLB restructuring charge, expenses should be slightly below $1.7 billion Capital Continue share repurchase program with up to $160 million in share repurchases in the 1st quarter Management is currently targeting a meaningfully significant increase in total return to shareholders compared with CCAR

18 2016 Performance vs. Peers

19 2016 Key Performance Results vs. Peers 30.0% Average Loan Growth vs. Peers 26.1% 24.0% 21.4% 18.0% 18.1% 12.0% 10.9% 6.0% 8.6% 7.5% 7.3% 6.9% 5.7% 4.7% 2.1% 1.7% 1.1% 0.8% 0.0% Peer 1 Peer 2 Peer 3 BBT Peer Median Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Source: S&P Global Includes the impact of acquisitions Peers include CFG, CMA, FITB, HBAN, KEY, MTB, PNC, RF, STI, USB, WFC and ZION 19

20 2016 Key Performance Results vs. Peers 20.0% Average Noninterest-bearing Deposit Growth vs. Peers 16.5% 15.0% 15.0% 10.0% 10.4% 7.4% 6.1% 5.9% 5.0% 5.2% 5.1% 4.9% 3.9% 3.1% 2.5% 2.2% 2.0% 0.0% Peer 1 BBT Peer 2 Peer 3 Peer 4 Peer 5 Peer Average Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Source: S&P Global Includes the impact of acquisitions Peers include CFG, CMA, FITB, HBAN, KEY, MTB, PNC, RF, STI, USB, WFC and ZION 20

21 2016 Key Performance Results vs. Peers 1.50% Nonperforming Assets / (EOPL + ORE) 1.34% 1.37% 1.25% 1.22% 1.12% 1.12% 1.15% 1.00% 1.02% 0.79% 0.81% 0.75% 0.72% 0.64% 0.57% 0.58% 0.50% BBT Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Source: S&P Global Peers include CFG, CMA, FITB, HBAN, KEY, MTB, PNC, RF, STI, USB, WFC and ZION 21

22 2016 Key Performance Results vs. Peers 3.50% Net Interest Margin 3.39% 3.37% 3.25% 3.16% 3.14% 3.11% 3.00% 3.01% 3.00% 2.92% 2.88% 2.88% 2.86% 2.75% 2.73% 2.70% 2.50% BBT Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Source: S&P Global Peers include CFG, CMA, FITB, HBAN, KEY, MTB, PNC, RF, STI, USB, WFC and ZION 22

23 2016 Key Performance Results vs. Peers 50.0% Fee Income 44.9% 44.7% 44.3% 42.5% 41.4% 41.3% 40.0% 38.9% 38.0% 37.1% 33.9% 32.7% 30.0% 27.4% 21.4% 20.0% Peer 1 Peer 2 Peer 3 Peer 4 BBT Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Source: S&P Global Peers include CFG, CMA, FITB, HBAN, KEY, MTB, PNC, RF, STI, USB, WFC and ZION 23

24 2016 Key Performance Results vs. Peers 70.0% Efficiency Ratio 65.0% 62.8% 63.8% 64.4% 64.5% 65.2% 65.6% 60.0% 59.2% 60.0% 60.7% 61.0% 61.7% 56.1% 55.0% 54.5% 50.0% Peer 1 Peer 2 BBT Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Source: S&P Global Peers include CFG, CMA, FITB, HBAN, KEY, MTB, PNC, RF, STI, USB, WFC and ZION 24

25 2016 Key Performance Results vs. Peers 2.00% Return on Risk-Weighted Assets 1.69% 1.50% 1.41% 1.34% 1.29% 1.11% 1.11% 1.00% 1.02% 0.97% 0.88% 0.78% 0.69% 0.50% Peer 1 BBT Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Source: S&P Global Peers include CFG, CMA, FITB, HBAN, KEY, PNC, RF, STI, USB and ZION 25

26 2016 Key Performance Results vs. Peers 20.00% Return on Average Tangible Common Equity 18.00% 15.00% 14.59% 13.85% 12.25% 10.00% 11.56% 11.49% 10.91% 10.36% 9.69% 8.05% 7.39% 7.07% 6.77% 5.00% Peer 1 BBT Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Source: S&P Global Peers include CFG, CMA, FITB, HBAN, KEY, MTB, PNC, RF, STI, USB, WFC and ZION 26

27 2016 Key Performance Results vs. Peers 13.0% Common Equity Tier % 12.1% 11.2% 11.2% 11.1% 11.1% 11.0% 10.7% 10.6% 10.4% 10.2% 10.0% 9.6% 9.6% 9.5% 9.4% 9.0% Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 BBT Peer 9 Peer 10 Peer 11 Peer 12 Source: S&P Global Peers include CFG, CMA, FITB, HBAN, KEY, MTB, PNC, RF, STI, USB, WFC and ZION 27

28 2016 Key Performance Results vs. Peers 14.0% Tier 1 Ratio 13.5% 13.0% 12.8% 12.0% 12.0% 12.0% 12.0% 11.9% 11.5% 11.4% 11.0% 11.1% 11.0% 10.9% 10.9% 10.3% 10.0% Peer 1 Peer 2 Peer 3 Peer 4 BBT Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Source: S&P Global Peers include CFG, CMA, FITB, HBAN, KEY, MTB, PNC, RF, STI, USB, WFC and ZION 28

29 2016 Key Performance Results vs. Peers 3.00% 2.76% Dividend Yield 2.40% 2.55% 2.42% 2.18% 2.08% 1.80% 1.90% 1.88% 1.86% 1.81% 1.79% 1.35% 1.35% 1.20% 0.74% 0.60% 0.00% Peer 1 BBT Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Source: S&P Global Peers include CFG, CMA, FITB, HBAN, KEY, MTB, PNC, RF, STI, USB, WFC and ZION 29

30 Total Shareholder Return 1 YEAR 5 YEAR 10 YEAR 15 YEAR 20 YEAR 40.0% (percent) % (percent) % (percent) 4.4 6% 5.4 (percent) 9% (percent) % 24.0% % % 3% 4% 3.6 6% % % 2% 2% 3% 8.0% 6% 1% % 0% 0% % 0% BBT Peer Average S&P Financials Index Peers include CFG, CMA, FITB, HBAN, KEY, MTB, PNC, RF, STI, USB, WFC and ZION For periods ended December 31, 2016 Source: Bloomberg 30

31 Performance Comparison Relative to All-Time High Share Prices BB&T is currently trading at its alltime highs 6 of its 12 proxy peers are trading at or near their alltime highs Price Performance Comparison Sorted by % of All-Time High 2/23/2017 % of All- All-Time High Current Time High Name Ticker Date Price ($) Price ($) (%) BB&T BBT 2/23/ % Proxy Peers M&T Bank MTB 2/23/ % PNC Financial PNC 2/23/ % U.S. Bancorp USB 2/23/ % Wells Fargo WFC 2/15/ % Comerica CMA 2/15/ % Citizens CFG 2/15/ % SunTrust STI 5/22/ % Zions ZION 2/20/ % Huntington HBAN 6/17/ % KeyCorp KEY 4/14/ % Fifth Third FITB 3/19/ % Regions RF 10/13/ % Median - Proxy Peers 82% Other Banks in BKX Capital One COF 2/23/ % JPMorgan JPM 2/23/ % SVB Financial SIVB 2/23/ % First Republic FRC 2/15/ % Northern Trust NTRS 1/4/ % State Street STT 1/3/ % People's United PBCT 2/21/ % Bank of New York Mellon BK 11/7/ % Bank of America BAC 11/20/ % New York Community NYCB 2/27/ % Citigroup C 8/28/ % Median - Other Banks in BKX 93% Overall Median 93% Source: Morgan Stanley and S&P Global; market data as of 02/23/

32 Cost of Equity Comparison BB&T trades with a lower beta (1.15x) than its peers Proxy peer median of 1.35x Overall median of 1.32x Cost of Equity Comparison Sorted by Beta / Cost of Equity 10-Year Market Risk Cost of UST Rate Beta Premium Equity Name Ticker (%) (x) (%) (%) BB&T BBT Proxy Peers Regions RF Comerica CMA Zions ZION Citizens CFG Huntington HBAN Fifth Third FITB SunTrust STI KeyCorp KEY Wells Fargo WFC PNC Financial PNC M&T Bank MTB U.S. Bancorp USB Median - Proxy Peers Other Banks in BKX SVB Financial SIVB Bank of America BAC Citigroup C Capital One COF State Street STT Bank of New York Mellon BK First Republic FRC Northern Trust NTRS JPMorgan JPM People's United PBCT New York Community NYCB Median - Other Banks in BKX Overall Median Source: Morgan Stanley and S&P Global, CapIQ; market data as of 02/23/2017. Beta based on Barra predicted beta per CapIQ 32

33 Among the Highest Rated Banks Average Peer Group Debt Ratings Sources: Bloomberg, SNL As of 02/24/17 Averages reflect ratings by Moody s, S&P, Fitch, and DBRS BB&T has a strong risk profile A track record of forgoing excessive growth in overheated markets BB&T has not been active in the leveraged loan market BB&T performs very well in forward-looking stress tests BB&T s capital position is resilient under stress - Even during the crisis, BB&T grew capital, largely organically BB&T has the second most granular loan portfolio of the 67 banks surveyed by Moody s Moody's S&P Fitch DBRS S&P/Fitch Equivalent USB A1 A+ AA AA AA- WFC A2 A AA- AA A+ BBT A2 A- A+ AH A PNC A3 A- A+ AH A CMA A3 BBB+ A A A- MTB A3 A- A AL A- FITB Baa1 BBB+ A AL A- STI Baa1 BBB+ A- AL A- KEY Baa1 BBB+ A- BBBH BBB+ HBAN Baa1 BBB A- BBBH BBB+ CFG N/A BBB+ BBB+ BBBH BBB+ RF Baa2 BBB BBB BBBH BBB ZION Baa3 BBB- BBB- BBB BBB- 33

34 A Digital Strategy and Mindset For the Future Invested in differentiated digital capabilities Introduced a new digital banking platform U by BB&T in 2015 to offer a differentiated digital banking experience and provide a foundation for future innovation Established the role of Chief Client Experience Officer To provide the Perfect Client Experience by delivering the BB&T Value Promise, to include being empathetic and passionate with clients enterprise-wide; thereby creating client delight Established objective to accelerate BB&T s digital transformation program Demonstrated a commitment to accelerating BB&T s digital transformation program by establishing it is as a corporate objective Created a structure to provide focus and alignment for digital strategy, client experience, and delivery Created Chief Digital Officer and Chief Client Experience Officer roles and aligned Digital, Data, and Technology under the leadership of the CIO Dontá Wilson Chief Client Experience Officer Bennett Bradley Chief Digital Officer Barbara Duck Chief Information Officer 34

35 U Summary Through December 31st 1.92MM active U clients* 25% of these are new Retail digital clients since U launch 74% of Active Retail Digital Banking Clients are active U clients Our goal is to transition all existing Retail Digital clients to the U platform as soon as the platform has had its internal and external assessments completed and appropriate remediation completed. As a new date is set for migration to restart, we will communicate with the teams. 2,500 U by BB&T Active Client Growth (in thousands) How are Clients using U? 20% 41% 2,000 1,500 1, Susquehanna / Legacy Mobile App Upgrade messaging All Associates begin using U Legacy App sunset completed National Penn 39% U Mobile App only U Browser only Both 0 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Total Active U Active New U * Includes approximately 93k SBO clients who have used U Mobile App 35

36 Committed To Our Communities Lighthouse Project The BB&T Lighthouse Project provides associates with an opportunity to make a difference in their communities through company supported and funded service projects. The purpose of the Lighthouse Project is to be involved in positive change. It s about seeing a need and then working with a local nonprofit to address the need. It s about living out our mission to make the communities we serve a better place to live and work. Since we began the BB&T Lighthouse Project in 2009, we have completed more than 9,000 community service projects, provided more than 475,000 volunteer hours, and helped change the lives of more than 13 million people! 36

37 Committed To Our Communities BB&T Financial Foundations Since 2010, BB&T has underwritten the cost of the EverFi - Financial Literacy TM platform, which provides an interactive, web-based financial management program to high school students throughout our footprint at no cost to the schools or taxpayers. Length of program: 6 8 hours The ten module course covers 600 financial literacy concepts on savings, banking, credit cards and interest rates, credit score, financing higher education, renting versus owning, taxes and insurance, consumer fraud, and investing. Course curriculum aligns with both state and national financial literacy standards and Common Core State Math Standards. Students experienced an 86% increase in financial knowledge after completing the BB&T curriculum 1 314,749 students in 15 states and the District of Columbia certified on the BB&T platform as of 12/1/16 37

38 Environmental Sustainability BB&T is proud to share our efforts to reduce our environmental footprint. From the way we construct our workplaces to choices we make in their operation, we closely consider our affect on the neighborhoods and communities where we live alongside our clients and associates. Bank-wide facilities initiatives Corporate paper shredding and recycling Commercial print (achieved 14% reduction in the volume of paper) Purchase of copy paper recycled using sustainable forestry practices Environmentally-friendly janitorial cleaning products Eliminated routine carpet cleaning to conserve resources Drive thru concrete cleaning 38

39 Environmental Sustainability In building construction, BB&T is an advocate for the environment and sustainable design. We promote the incorporation of sustainable design strategies where applicable, practical, economically feasible and consistent with the function and operations of the facility. Bank-wide building construction initiatives Maximizing the use of natural light reducing electricity consumption Use of native plants to reduce irrigation requirements Specification of construction materials with recycled content Specification of low-voc content materials New flooring and new furniture contains recycled content Use of white building roof system to reduce heat island effect Energy-efficient appliances and lighting High-performance low-e glazing on windows and doors Use of high-efficiency HVAC units 39

40 Strong Corporate Governance Proxy access Shareholder engagement Active, independent board of directors Strong independent lead director Strategic direction and planning Stock ownership guidelines for CEO/Board Board oversight of risk management Compensation clawbacks and executive risk scorecard Restrictions on pledging/hedging of shares Statement of political activity Corporate Social Responsibility Report Majority voting for director elections 40

41 Well-Positioned For the Future Diversification drives long-term stability / less volatility Maintaining long-term performance advantages Most diversified insurance brokerage platform in the industry Achieving targeted cost savings / intense focus on expenses Accelerating digital transformation U by BB&T Strong dividend Among the highest dividend payout ratios Management is currently targeting a meaningfully significant increase in total return to shareholders compared with CCAR 2016 Focus on improving loan and revenue growth Unique and non-negotiable culture 41

42 Culture Matters Values Are Consistent and Important Value System Value System Attract / Train and Retain the Right People Perfect Client Experience Revenues Superior Shareholder Long-term Returns 42

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44 Appendix

45 45 Non-GAAP Reconciliations 1 (Dollars in millions) Quarter Ended Dec. 31 Sept. 30 June 30 March 31 Dec. 31 Efficiency Ratio (1) Efficiency Ratio Numerator - Noninterest Expense - GAAP $ 1,668 $ 1,711 $ 1,797 $ 1,545 $ 1,597 Amortization of intangibles (38) (38) (42) (32) (32) Merger-related and restructuring charges, net (13) (43) (92) (23) (50) Gain (loss) on early extinguishment of debt Mortgage reserve adjustments Charitable contribution - (50) Settlement of FHA-insured loan matters and related recovery Efficiency Ratio Numerator - Adjusted $ 1,648 $ 1,653 $ 1,663 $ 1,491 $ 1,515 Efficiency Ratio Denominator Revenue 2 GAAP $ 2,727 $ 2,774 $ 2,747 $ 2,545 $ 2,519 Taxable equivalent adjustment Securities (gains) losses, net (1) - - (45) - Efficiency Ratio Denominator - Adjusted $ 2,767 $ 2,814 $ 2,787 $ 2,539 $ 2,557 Efficiency Ratio - GAAP 61.1% 61.7% 65.4% 60.7% 63.4% Efficiency Ratio - Adjusted 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 significant gains and charges. 2 Revenue is defined as net interest income plus noninterest income

46 46 Non-GAAP Reconciliations 1 (Dollars in millions) Quarter Ended Dec. 31 Sept. 30 June 30 March 31 Dec. 31 Return on Average Tangible Common Shareholders' Equity Net income available to common shareholders $ 592 $ 599 $ 541 $ 527 $ 502 Plus: Amortization of intangibles, net of tax Tangible net income available to common shareholders $ 616 $ 623 $ 567 $ 547 $ 523 Average common shareholders' equity $ 26,962 $ 26,824 $ 26,519 $ 25,076 $ 24,736 Less: Average intangible assets 10,508 10,545 10,574 9,226 9,224 Average tangible common shareholders' equity $ 16,454 $ 16,279 $ 15,945 $ 15,850 $ 15,512 Return on Average Tangible Common Shareholders' Equity 14.91% 15.20% 14.33% 13.87% 13.37% 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.

47 Non-GAAP Reconciliations 1,2 (Dollars in millions) Dec. 31 Sept. 31 June 30 March 31 Dec Net interest income - GAAP $ 1,565 $ 1,610 $ 1,617 $ 1,529 $ 1,504 Taxable-equivalent adjustment Net interest income - taxable-equivalent $ 1,606 $ 1,650 $ 1,657 $ 1,568 $ 1,542 Interest income - PCI loans (49) (52) (48) (59) (56) Accretion of mark on Susquehanna and National Penn non-pci loans (33) (40) (42) (28) (30) Accretion of mark on Susquehanna and National Penn liabilities (6) (7) (9) (8) (9) Accretion of mark on securities acquired from FDIC 14 (8) (21) (18) (7) Net interest income - Core $ 1,532 $ 1,543 $ 1,538 $ 1,455 $ 1,439 Earning assets - GAAP 192, , , , ,151 Average balance - PCI loans (974) (1,052) (1,130) (1,098) (1,070) Average balance of mark on Susquehanna and National Penn non-pci loans Average balance of mark on securities acquired from FDIC Earning assets - Core $ 192,302 $ 193,601 $ 94,461 $183,230 $ 182,967 Annualized net interest margin Quarter Ended Reported 3.32% 3.39% 3.41% 3.43% 3.35% Core Core net interest margin is a non-gaap measure that adjusts net interest margin to exclude the impact of interest income and funding costs associated with loans and securities acquired in the Colonial acquisition and PCI loans acquired from Susquehanna and National Penn. Core net interest margin is also adjusted to remove the purchase accounting marks and related amortization for non-pci loans, deposits and long-term debt acquired from Susquehanna and National Penn. BB&T's management believes that the adjustments to the calculation of net interest margin for certain assets and deposits acquired provide investors with useful information related to the performance of BB&T's earning assets. 2 Amounts may not sum due to rounding 47