• 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 and the adverse effects of recessionary conditions in Europe and the impact of recent market disruptions in China; • changes in the interest rate environment, including interest rate changes made by the Federal Reserve, and cash flow reassessments may reduce NIM 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; • cyber-security risks, including "denial of service," "hacking" and "identity theft," could adversely affect our business and financial performance or our reputation, and we 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 domestic or foreign terrorism, could have an adverse effect on BB&T in that such events could materially disrupt BB&T's operations or the ability or willingness of BB&T's customers to access the financial services BB&T offers; • 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 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; • deposit attrition, customer loss and/or revenue loss following completed mergers and acquisitions may be greater than expected; • 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. This news release 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 that are 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 that 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: Forward-Looking Information Capital ratios are preliminary. This news release 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 that these non-GAAP 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 in the current period. The company believes that a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. BB&T's management believes that 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 ratios 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 that 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 are or were covered by FDIC loss sharing agreements and purchased credit impaired ("PCI") loans as well as government guaranteed loans. Management believes that their inclusion may result in distortion of these ratios such that they might not be comparable to other periods presented or to other portfolios that were not impacted by purchase accounting or reflective of asset collectibility. • Adjusted fee income and adjusted efficiency ratios are non-GAAP in that they exclude securities gains (losses), foreclosed property expense, amortization of intangible assets, merger-related and restructuring charges, the impact of FDIC loss share accounting and other selected items. BB&T's management uses these measures in their analysis of the Corporation's performance. BB&T's management 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. • 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. Non-GAAP Information A reconciliation of these non-GAAP measures to the most directly comparable GAAP measure is included in BB&T's Second Quarter 2016 Quarterly Performance Summary, which is available on BB&T's website at www.bbt.com.
3 2016 Second Quarter Performance Highlights1 Net income totaled $541 million2, up 19.2% vs. 2Q15 and 10.7% vs. 1Q16 Diluted EPS totaled $0.66, up from $0.62 in 2Q15 and down from $0.67 in 1Q16 Adjusted diluted EPS totaled $0.71 excluding merger-related and restructuring charges and benefits from specific tax-advantaged assets GAAP ROA was 1.06% and ROTCE was 14.33% Adjusted ROA3 was 1.16% and adjusted ROTCE3 was 15.76% Earnings1 Loans Credit Quality Average loans and leases held for investment totaled $141.1 billion in 2Q16, an increase of 20.2% vs. 1Q16; excluding the impact of National Penn, growth was 2.6% Excluding residential mortgage loans and National Penn, average loans held for investment grew approximately 4.7% vs. 1Q16 Net charge-offs were 0.28%, the lowest charge-off rate since 2006 Strategic Highlights FRB did not object to CCAR plan Proposed 7.1% increase in quarterly dividend Proposed $640 million in share repurchases Completed conversion of National Penn in mid-July Record Revenues4 Record FTE revenues totaled $2.8 billion, up 17.7% vs. 2Q15 and 31.6% vs. 1Q16 Record net interest income of $1.7 billion, up 22.9% vs. 2Q15 and 22.8% vs. 1Q16 Net interest margin declined 2 bps to 3.41% Expenses3 Efficiency was 59.3% compared to 59.2% in 2Q15 and 58.3% in 1Q16 Noninterest expense increased $252 million vs. 1Q16 led by the impact of National Penn, Swett & Crawford and merger-related and restructuring charges 1 Returns and linked quarter growth rates are annualized, except credit metrics 2 Available to common shareholders 3 Refer to the Appendix for appropriate reconciliations of non-GAAP financial measures 4 Revenues presented on a taxable equivalent basis
4 Pre-Tax After Tax Diluted EPS Impact Merger-related and restructuring charges1 $ (92) $ (58) $ (0.07) Benefits from specific tax-advantaged assets N/A $ 13 $ 0.02 Selected Items Affecting Earnings ($ in millions, except per share impact) 1 Includes $63 million in pretax merger-related charges and $29 million in pretax restructuring costs related to severance and real estate
5 Loans Reflect Seasonal Strength and Targeted Runoff1 Average loans and leases held for investment (excluding National Penn) increased 2.6% in 2Q16 primarily due to growth in C&I, CRE – IPP, and other lending subsidiaries Excluding residential mortgage and National Penn, average loans held for investment grew approximately 4.7% annualized vs. 1Q16 Experienced loan growth vs. 1Q16 in other portfolios3: Sheffield, up 33.1% Dealer floor plan, up 21.4% Premium Finance, up 12.9% Regional Acceptance, up 11.2% 1 Excludes loans held for sale 2 Other lending subsidiaries consist primarily of AFCO/CAFO/Prime Rate, BB&T Equipment Finance, Grandbridge Real Estate Capital, Sheffield Financial and Regional Acceptance 3 Growth rates exclude the impact of National Penn. See non-GAAP reconciliations included in the attached Appendix $120.0 $130.5 $134.8 $134.4 $141.1 $100.0 $110.0 $120.0 $130.0 $140.0 $150.0 2Q15 3Q15 4Q15 1Q16 2Q16 Average Loans Held for Investment ($ in billions) C&I $ 51,646 30.4% 9.4% CRE – IPP 14,786 38.6 4.3 CRE – C&D 3,669 5.6 (8.8) Dealer floor plan 1,305 21.4 21.4 Direct retail lending 12,031 33.5 1.3 Sales finance 9,670 (15.2) (21.3) Revolving credit 2,477 2.3 1.0 Residential mortgage 30,471 8.2 (4.8) Other lending subsidiaries2 13,961 15.6 15.6 Acquired from FDIC and PCI 1,130 11.7 (25.6) Total $ 141,146 20.2% 2.6% 2Q16 Average Balance 2Q16 v. 1Q16 Annualized Increase (Decrease) Average Loans Held for Investment ($ in millions) 3Q16 management expectations Average loan growth of approximately 1% – 3% Organic 2Q16 v. 1Q16 Annualized Increase (Decrease)3
6 Noninterest-Bearing Deposits Reflect Strong Growth $131.9 $143.8 $148.5 $149.9 $160.3 0.24% 0.24% 0.24% 0.25% 0.23% 0.20% 0.25% 0.30% 0.35% 0.40% $115.0 $125.0 $135.0 $145.0 $155.0 $165.0 2Q15 3Q15 4Q15 1Q16 2Q16 Total Interest-Bearing Deposit Cost Total deposits averaged $160.3 billion, an increase of $10.5 billion vs. 1Q16 Excluding acquisitions, total deposits increased $3.9 billion, or 10.5% annualized vs. 1Q16 Personal, up 1.2% Business, up 16.9% Public Funds, down 29.4% Excluding acquisitions, noninterest-bearing deposits increased $1.4 billion, or 12.1% annualized vs. 1Q16 Average Total Deposits ($ in billions) $41.5 $44.2 $45.8 $46.2 $48.8 $30.0 $34.0 $38.0 $42.0 $46.0 $50.0 2Q15 3Q15 4Q15 1Q16 2Q16 Average Noninterest-Bearing Deposits ($ in billions) Noninterest-bearing deposits $ 48,801 22.6% 12.1% Interest checking 28,376 43.5 15.8 Money market & savings 63,195 18.4 2.2 Subtotal $ 140,372 24.8% 8.3% Time deposits 18,101 29.0 1.9 Foreign office deposits – Interest-bearing 1,865 NM NM Total deposits $ 160,338 28.1% 10.5% 2Q16 Average Balance Organic 2Q16 v. 1Q16 Annualized Increase (Decrease)1 Average Deposits ($ in millions) 2Q16 v. 1Q16 Annualized Increase (Decrease) 1 Growth rates exclude the impact of National Penn. See non-GAAP reconciliations included in the attached Appendix
7 Credit Quality Reflects Lower Charge-offs1 Net charge-offs totaled $97 million, down 37.0% vs. 1Q16 Net charge-offs as a percentage of average loans were 0.28%, the lowest percentage since 2006 Loans 90 days or more past due and still accruing were essentially flat vs. 1Q16 Loans 30-89 days past due increased 10.8% vs. 1Q16 Led by seasonal increase in consumer-related portfolios NPAs decreased 1.9% vs. 1Q16 Excluding energy-related loans, NPAs improved to 0.32% of total assets 3Q16 management expectations Management expects 3Q16 net charge-offs to be in the range of 35 to 45 bps NPA levels expected to remain in a similar range in 3Q16 0.38% 0.36% 0.34% 0.33% 0.40% 0.42% 0.32% 0.00% 0.20% 0.40% 0.60% 2Q15 3Q15 4Q15 1Q16 2Q16 Total Nonperforming Assets as a Percentage of Total Assets Total NPAs Energy-related nonperformers Annualized Net Charge-offs / Average Loans 1 Includes acquired from FDIC and PCI; excludes loans held for sale 0.33% 0.32% 0.38% 0.46% 0.28% 0.00% 0.20% 0.40% 0.60% 2Q15 3Q15 4Q15 1Q16 2Q16
8 Energy Portfolio – Stabilized in 2Q16 Total commitments, outstanding balances, nonaccruals and losses decreased vs. 1Q16 41% Utilization rate 42% of the portfolio is Criticized & Classified Allocated reserves = 9.3% 92% of nonperforming Oil and Gas borrowers are paying as agreed Completed spring redeterminations, commitments reduced; collateral and credit agreements enhanced Coal portfolio = $210 million outstanding, 51% utilization with 18% Criticized & Classified Allocated Reserves = 9.7% Support Services $132 9% Oil and Gas Portfolio $ in millions Midstream $493 33% Upstream $870 58% Total $1.5 billion (Approximately 1% of total loans)
9 Allowance Coverage Ratios Remain Strong 3.71x 3.44x 2.83x 2.40x 3.88x 2.55x 2.49x 2.53x 1.89x 1.90x 1.00 2.00 3.00 4.00 2Q15 3Q15 4Q15 1Q16 2Q16 ALLL to Net Charge-offs ALLL to NPLs HFI Coverage ratios remain strong at 3.88x and 1.90x for the allowance to net charge-offs and NPLs, respectively The ALLL to loans ratio was 1.06%, compared to 1.10% last quarter Decline in ratio due to the acquisition of National Penn’s marked loan balances Provision for credit losses was $111 million vs. net charge-offs of $97 million Excluding loans acquired in business acquisitions, the ALLL to loans ratio was 1.16%, compared to 1.17% last quarter Going forward, we expect the loan loss provision to match charge-offs in addition to providing for incremental loan growth ALLL Coverage Ratios
10 Net Interest Margin Decreases Slightly to 3.41% 3.27% 3.35% 3.35% 3.43% 3.41% 3.16% 3.15% 3.12% 3.18% 3.16% 2.50% 3.00% 3.50% 4.00% 2Q15 3Q15 4Q15 1Q16 2Q16 Reported NIM Core NIM 2Q16 NIM decreased 2 bps due to: Lower interest rate environment Higher securities balances acquired from National Penn 3Q16 management expectations GAAP net interest margin expected to decline a few bps due to lower interest rates, a flatter yield curve and a reduction in purchase accounting accretion Core net interest margin expected to remain essentially flat as lower interest rates are offset by: - favorable asset mix changes - favorable funding cost and mix changes Asset sensitivity increased due to: Changes in net free funds and investment and deposit mix changes Net Interest Margin 1 -1.42% 1.44% 2.42% 3.18% -0.85% 0.89% 1.64% 2.09% -2.00% 0.00% 2.00% 4.00% Down 25 Up 50 Up 100 Up 200 Sensitivities as of 06/30/16 Sensitivities as of 03/31/16 Rate Sensitivities 1 See non-GAAP reconciliations included in the attached Appendix
11 Fee Income Reflects Strong Growth From Acquisitions Insurance income increased $46 million driven by $57 million from Swett & Crawford, a $34 million seasonal increase in P&C commissions and a $13 million increase in other insurance revenues Partially offset by: A $36 million seasonal decline in employee benefit commissions and a decrease of $23 million, primarily due to lower bonus commissions Mortgage banking income increased $20 million due to higher gains on sales, increased saleable residential loan volume and seasonally stronger commercial mortgage fee income Other income increased $65 million, primarily due to a $55 million increase in income related to assets for certain post-employment benefits 46.3% 42.1% 41.8% 40.6% 42.8% 35.0% 40.0% 45.0% 50.0% 2Q15 3Q15 4Q15 1Q16 2Q16 Fee Income Ratio1 2Q16 2Q16 v. 1Q162 Increase (Decrease) 2Q16 v. 2Q15 Increase (Decrease) Insurance income $ 465 44.2 % 10.2 % Service charges on deposits 166 31.3 7.8 Mortgage banking income 111 88.4 (14.6) Investment banking and brokerage fees and commissions 102 20.7 (5.6) Trust and investment advisory revenues 67 32.4 17.5 Bankcard fees and merchant discounts 60 28.7 9.1 Checkcard fees 50 44.7 16.3 Operating lease income 35 11.8 16.7 Income from bank-owned life insurance 31 - 14.8 FDIC loss share income, net (64) 26.8 - Securities gains (losses), net - NM (100) Other income 107 NM 84.5 Total noninterest income $ 1,130 45.1 % 10.9 % Noninterest Income ($ in millions) 1 Excludes securities gains (losses), the impact of FDIC loss share accounting and other selected items. See non-GAAP reconciliations included in the attached Appendix 2 Linked quarter percentages are annualized 3Q16 management expectations Total noninterest income expected to be relatively flat due to seasonal decrease in insurance revenues
12 Noninterest Expense Driven by Acquisitions and Restructuring 2Q16 2Q16 v. 1Q162 Increase (Decrease) 2Q16 v. 2Q15 Increase (Decrease) Personnel expense $ 1,039 54.5 % 20.3 % Occupancy and equipment expense 194 6.3 16.9 Software expense 53 15.8 15.2 Loan-related expense 36 50.3 (2.7) Outside IT services 44 29.4 51.7 Professional services 26 73.1 (25.7) Amortization of intangibles 42 125.7 82.6 Regulatory charges 32 26.8 28.0 Foreclosed property expense 8 (109.7) (42.9) Merger-related and restructuring charges, net 92 NM NM Loss (gain) on early extinguishment of debt - NM (100.0) Other expense 231 67.0 6.5 Total noninterest expense $ 1,797 65.6 % 8.7 % Noninterest Expense ($ in millions) 1 Excludes certain items as detailed in non-GAAP reconciliation section 2 Linked quarter percentages are annualized 59.2% 59.2% 58.8% 58.3% 59.3% 50.0% 55.0% 60.0% 65.0% 2Q15 3Q15 4Q15 1Q16 2Q16 Efficiency Ratio1 Personnel expense increased $124 million driven by: $44 million increase in salary expense, which reflects an increase in FTE employees of 1,896 from recent acquisitions - Excluding acquisitions, FTEs were lower by approximately 276 $40 million increase in certain post-employment benefits expense $36 million increase in incentives due to the Swett & Crawford acquisition and higher overall volume Merger-related and restructuring charges include a $69 million increase due to acquisitions and $29 million in restructuring charges related to severance and real estate Other expense increased $33 million primarily due to operating charge-offs, charitable contributions, travel expense, certain checkcard expenses and taxes and licenses 3Q16 management expectations Future quarterly expenses will include approximately $11 million in increased FDIC expenses Excluding merger-related and restructuring charges, expenses are expected to decline 1% - 2% due to cost savings from acquisitions
13 Capital and Liquidity Remain Strong 10.4% 10.1% 10.3% 10.4% 10.0% 9.0% 9.5% 10.0% 10.5% 11.0% 2Q15 3Q15 4Q15 1Q16 2Q16 The common equity tier 1 ratio was 9.8% fully phased-in BB&T’s 2Q16 LCR was 135% BB&T’s 2Q16 liquid asset buffer was 13.7% (high quality liquid assets as a percentage of total assets) 3Q16 management expectation, subject to Board of Directors approval: Quarterly dividend increase of $0.02, or 7.1% to $0.30 per quarter Initiate a share repurchase program up to $160 million in the 3rd quarter 1 Current quarter regulatory capital information is preliminary Common Equity Tier 11
14 ($ in millions) Inc/(Dec) vs 1Q16 Inc/(Dec) vs 2Q15 2Q16 Comments5 Net Interest Income Noninterest Income1 Provision for Credit Losses Noninterest Expense2 Income Tax Expense Segment Net Income Highlighted Metrics5 $ 923 345 23 783 168 $ 294 $ 5 27 33 10 (4) $ (7) ($ in billions) 1 Noninterest Income includes intersegment net referral fees 2 Noninterest Expense includes amortization of intangibles and allocated corporate expense 3 Linked quarter growth rates annualized except for production 4 Commercial production includes C&I, CRE and Dealer Floor Plan 2Q16 Like Total Commercial Loans Direct Retail Lending Money Market & Savings Noninterest Bearing Deposits Link3 (1.3%) 0.9% 2.3% 7.9% Change Community Banking Segment Commercial production4 increased $318 million, or 8.9%, compared to 2Q15 More than half of the net interest income increase compared to 2Q15 attributable to the Susquehanna acquisition Noninterest expense increased vs. 2Q15 primarily due to the Susquehanna acquisition National Penn acquisition completed on April 1, 2016. Systems conversion completed weekend of July 15th Added approximately $7 billion in deposits and $10 billion in assets Added 126 financial centers in Pennsylvania, New Jersey and Maryland Serves individual and business clients by offering a variety of loan and deposit products and other financial services $47.1 $11.1 $46.7 $42.7 5 National Penn results will not be included in this segment until after mid-July conversion . 20.0% 33.2% 15.9% 16.2% $ 188 16 12 94 35 $ 63
15 Retains and services mortgage loans originated by the Residential Mortgage Lending Division and through its referral relationship with the Community Bank and referral partners as well as those purchased from various correspondent originators ($ in millions) Inc/(Dec) vs 1Q16 Inc/(Dec) vs 2Q15 2Q16 Comments 4 Net Interest Income Noninterest Income1 Provision for Credit Losses Noninterest Expense2 Income Tax Expense Segment Net Income Highlighted Metrics $ 110 83 10 112 27 $ 44 ($ in billions) 1 Noninterest Income includes intersegment net referral fees 2 Noninterest Expense includes amortization of intangibles and allocated corporate expense 3 Credit quality metrics are based on Loans Held for Investment 4 Linked quarter growth rates annualized except for production and sales Change Residential Mortgage Banking Segment $ 5 12 (1) 10 3 $ 5 Production mix was 57% purchase / 43% refinance in 2Q16 vs. 55% / 45% in 1Q16 Noninterest income increased vs. 1Q16 due to higher gains on residential mortgage loan production and sales Net interest income increased vs. 1Q16 due primarily to growth in loans held for sale Increase in noninterest expense vs. 1Q16 driven by higher personnel expense associated with increased production volumes Credit quality3 30+ days and still accruing delinquency of 3.64% Nonaccruals of 0.58% Net charge-offs of 0.11% 2Q16 Link4 Like Retail Originations $ 2.2 58.2% (2.6%) Correspondent Purchases $ 3.4 54.0% 5.0% Total Production $ 5.6 55.6% 1.9% Loan Sales $ 3.7 48.3% (8.0%) Loans Serviced for others (EOP) $ 90.0 (2.6%) 0.8% $ (6) (16) 7 11 (15) $ (25)
16 Primarily originates indirect loans 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) Comments4 ($ in millions) Inc/(Dec) vs 1Q16 Inc/(Dec) vs 2Q15 2Q16 Net Interest Income Noninterest Income1 Provision for Credit Losses Noninterest Expense2 Income Tax Expense Segment Net Income Highlighted Metrics 2Q16 Like $ 187 - 58 47 31 $ 51 Retail Loan Production Loan Yield Operating Margin3 Net Charge-offs $ 1.2 6.55% 74.9% 1.5% (3.3%) 0.08% 3.5% 0.24% 1 Noninterest Income includes intersegment net referral fees 2 Noninterest Expense includes amortization of intangibles and allocated corporate expense 3 Operating Margin excludes Provision for Credit Losses 4 Linked quarter growth rates annualized except for production and sales ($ in billions) Link4 18.0% 0.07% (0.9%) (0.45%) Change Dealer Financial Services Segment Asset quality remains in line with management’s seasonal expectations and risk appetite Regional Acceptance 2Q16 net charge-offs decreased to 6.0% vs. 8.0% last quarter Prime auto net charge-offs of 0.15% Prime auto portfolio yield improved by 13 basis points over 2Q15 Production trends are positive for 2Q16 Regional Acceptance point of sale production growth of $23 million vs. 1Q16 Excluding Regional Acceptance, loan production grew $100 million, led by Recreational Lending Regional Acceptance generated stable loan growth 11.2% loan growth vs. 1Q16 and 6.1% vs. 2Q15 Origination terms stable, maximum term of 72 months Program changes over last two years steadily reduced the maximum permitted origination LTV $ (2) (1) (18) 1 5 $ 9 $ 9 - 10 (4) 1 $ 2
17 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 Comments4 ($ in millions) Inc/(Dec) vs 1Q16 Inc/(Dec) vs 2Q15 2Q16 Net Interest Income Noninterest Income1 Provision for Credit Losses Noninterest Expense2 Income Tax Expense Segment Net Income Highlighted Metrics 2Q16 Like $ 117 73 17 92 20 $ 61 $ 7 8 (1) 8 3 $ 5 $ 20 2 6 12 1 $ 3 ($ in billions) Loan Originations Loan Yield Operating Margin3 Net Charge-offs $ 5.8 4.77% 51.6% 0.24% 9.2% 0.24% (0.8%) 0.05% 1 Noninterest Income includes intersegment net referral fees 2 Noninterest Expense includes amortization of intangibles and allocated corporate expense 3 Operating Margin excludes Provision for Credit Losses 4 Linked quarter growth rates annualized except for production and sales 66.8% (0.12%) (0.4%) (0.13%) Link4 Change5 Specialized Lending Segment Specialized Lending continues to enjoy strong loan growth and production Sheffield Financial 14.8% loan growth vs. 2Q15 5.7% production growth vs. 2Q15 Grandbridge Strong production in 2Q16 of $1.9 billion, led by June closings of $919 million. Management expects strong production in subsequent quarters Equipment Finance 12.9% loan growth vs. 2Q15 15.5% production growth vs. 2Q15 5 During the first quarter of 2016, the asset-based lending group was moved to Community Banking, and the supply-chain lending was moved to the Financial Services segment. Prior period amounts have been retrospectively adjusted for these transfers
18 Comments4 ($ in millions) Inc/(Dec) vs 1Q16 Inc/(Dec) 2Q15 2Q16 Net Interest Income Noninterest Income1 Provision for Credit Losses Noninterest Expense2 Income Tax Expense Segment Net Income Highlighted Metrics Noninterest Income Total Agencies3 EBITDA Margin5 2Q16 Like Provides property and casualty, life, and health insurance to business and individual clients. It also provides workers compensation and professional liability, as well as surety coverage and title insurance $ 2 465 - 396 27 $ 44 $ 1 44 - 58 (4) $ (9) $ 1 40 - 50 - $ (9) $ 465 236 20.1% 9.4% 39 (2.3%) Change 42.0% 37 (4.2%) Link4 ($ in millions) Insurance Holdings Segment 4 Linked quarter growth rates annualized except for production and sales 5 Excludes American Coastal and merger related and restructuring charges Insurance Holdings commission and fee revenue growth vs. 2Q15 1.1% for Retail 17.2% for Wholesale 9.6% for total Segment; 0.9% organic growth excluding Swett & Crawford Higher year over year noninterest income was primarily a result of the addition of Swett & Crawford, a wholesale commercial insurance broker, on April 1st Higher noninterest expense vs. 1Q16 and 2Q15 was primarily due to the addition of Swett & Crawford Continue to focus towards achieving synergies presented by the Swett acquisition 1 Noninterest Income includes intersegment net referral fees 2 Noninterest Expense includes amortization of intangibles, allocated corporate expense, and merger related charges 3 U.S. Locations; count includes shared locations
19 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 Comments4 ($ in millions) Inc/(Dec) vs 1Q16 Inc/(Dec) vs 2Q15 2Q16 Net Interest Income Noninterest Income1 Provision for Credit Losses Noninterest Expense2 Income Tax Expense Segment Net Income Highlighted Metrics Average Loan Balances Average Deposits Total Invested Assets Invested Assets Noninterest Income ($ in millions) Operating Margin3 2Q16 Like $ 159 215 6 228 53 $ 87 $ 8 15 (84) 9 38 $ 60 $ 29 (1) (17) 17 11 $ 17 $ 16.2 $30.8 $ 132.8 $ 135.5 39.0% 1 Noninterest Income includes intersegment net referral fees 2 Noninterest Expense includes amortization of intangibles and allocated corporate expense 3 Operating Margin excludes Provision for Credit Losses 4 Linked quarter growth rates annualized except for production and sales ($ in billions) Link4 22.8% 22.1% 2.7% 12.9% 1.4% Change 24.1% 9.0% 3.6% 6.7% 0.0% Financial Services Segment Corporate Banking’s loan growth continued to be strong 24.0% loan growth vs. 1Q16 25.3% loan growth vs. 2Q15 BB&T Wealth generated strong loan and deposit growth 13.4% loan growth and 16.4% transaction deposit growth vs. 1Q16 16.7% loan growth and 17.2% transaction deposit growth vs. 2Q15 Increase in noninterest income vs. 1Q16 driven by client derivative income and investment commission and brokerage fees Provision decrease primarily attributable to higher net charge-offs and increased reserves in the prior quarter related to energy lending exposure
20
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Capital Measures1 (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 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 find them useful in their analysis of the Corporation. These capital measures are not necessarily comparable to similar capital measures that may be presented by other companies. 22 As of / Quarter Ended June 30 March 31 Dec. 31 Sept. 30 June 30 2016 2016 2015 2015 2015 Selected Capital Information Risk-based capital: Common equity tier 1 $ 17,568 $ 17,320 $ 17,081 $ 16,822 $ 16,031 Tier 1 20,620 20,373 19,682 19,422 18,633 Total 24,527 24,355 23,753 23,612 21,896 Risk-weighted assets2 176,232 166,781 166,611 165,990 154,493 Average quarterly tangible assets 214,226 202,200 201,541 195,623 182,444 Risk-based capital ratios: Common equity tier 1 10.0% 10.4% 10.3% 10.1% 10.4% Tier 1 11.7 12.2 11.8 11.7 12.1 Total 13.9 14.6 14.3 14.2 14.2 Leverage capital ratio 9.6 10.1 9.8 9.9 10.2 Equity as a percentage of total assets 13.4 13.3 13.0 13.1 13.2 Common equity per common share $ 32.72 $ 32.14 $ 31.66 $ 31.56 $ 30.64 Selected non-GAAP Capital Information3 Tangible common equity as a percentage of tangible assets 7.6% 7.8% 7.7% 7.7% 8.1% Tangible common equity per common share $ 19.75 $ 20.36 $ 19.82 $ 19.77 $ 20.21
Non-GAAP Reconciliations1 23 (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 find them useful in their analysis of the Corporation. These capital measures are not necessarily comparable to similar capital measures that may be presented by other companies. Calculations of tangible common equity, tangible assets and related measures2: Total shareholders' equity $ 29,743 $ 28,239 $ 27,340 $ 27,264 $ 25,132 Less: Preferred stock 3,053 3,054 2,603 2,603 2,603 Noncontrolling interests 39 39 34 40 52 Intangible assets 10,567 9,215 9,234 9,198 7,655 Tangible common equity $ 16,084 $ 15,931 $ 15,469 $ 15,423 $ 14,822 Total assets $ 221,859 $ 212,405 $ 209,947 $ 208,809 $ 191,017 Less: Intangible assets 10,567 9,215 9,234 9,198 7,655 Tangible assets $ 211,292 $ 203,190 $ 200,713 $ 199,611 $ 183,362 Tangible common equity as a percentage of tangible assets 7.6% 7.8% 7.7% 7.7% 8.1% Tangible common equity $ 16,084 $ 15,931 $ 15,469 $ 15,423 $ 14,822 Outstanding shares at end of period (in thousands) 814,500 782,379 780,337 780,150 733,481 Tangible common equity per common share $ 19.75 $ 20.36 $ 19.82 $ 19.77 $ 20.21 As of / Quarter Ended June 30 March 31 Dec. 31 Sept. 30 June 30 2016 2016 2015 2015 2015
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 significant gains and charges. Quarter Ended June 30 March 31 Dec. 31 Sept. 30 June 30 Efficiency and Fee Income Ratios 2016 2016 2015 2015 2015 Efficiency ratio - GAAP 64.5% 59.8% 62.4% 64.1% 69.8% Effect of merger-related and restructuring charges, net (3.4) (0.9) (1.9) (3.1) (1.1) Effect of loss on early extinguishment of debt - - - - (7.1) Effect of foreclosed property expense (0.3) (0.4) (0.4) (0.6) (0.6) Effect of amortization of intangibles (1.5) (1.3) (1.3) (1.2) (0.9) Effect of securities gains (losses), net - 1.1 - - - Effect of FDIC loss share accounting - - - - (0.1) Effect of loss on sale of American Coastal - - - - (0.8) Efficiency ratio - reported 59.3% 58.3% 58.8% 59.2% 59.2% Fee Income ratio - GAAP 40.6% 39.3% 39.7% 39.7% 43.0% Effect of securities gains (losses), net - (1.1) - - - Effect of FDIC loss share accounting 2.2 2.4 2.1 2.4 2.7 Effect of loss on sale of American Coastal - - - - 0.6 Fee Income ratio - reported 42.8% 40.6% 41.8% 42.1% 46.3%
25 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 June 30 March 31 Dec. 31 Sept. 30 June 30 Return on Average Tangible Common Shareholders' Equity 2016 2016 2015 2015 2015 Net income available to common shareholders $ 541 $ 527 $ 502 $ 492 $ 454 Plus: Amortization of intangibles, net of tax 26 20 21 18 14 Tangible net income available to common shareholders $ 567 $ 547 $ 523 $ 510 $ 468 Average common shareholders' equity $ 26,519 $ 25,076 $ 24,736 $ 23,957 $ 22,210 Less: Average intangible assets 10,574 9,226 9,224 8,666 7,496 Average tangible common shareholders' equity $ 15,945 $ 15,850 $ 15,512 $ 15,291 $ 14,714 Return on Average Tangible Common Shareholders' Equity 14.33% 13.87% 13.37% 13.23% 12.76%
Non-GAAP Reconciliations1 Quarter Ended Reported net interest margin vs. core net interest margin June 30 2016 March 31 2016 Dec. 31 2015 Sept. 30 2015 June 30 2015 Reported net interest margin - GAAP 3.41% 3.43% 3.35% 3.35% 3.27% Adjustments to interest income for assets acquired: Effect of securities acquired from FDIC (0.06) (0.06) (0.03) (0.04) (0.04) Effect of loans acquired from FDIC and PCI (0.08) (0.11) (0.11) (0.07) (0.08) Effect of purchase accounting marks on non-PCI loans acquired from Susquehanna and National Penn (0.09) (0.06) (0.07) (0.08) - Adjustments to interest expense: Effect of purchase accounting marks on deposits and long-term debt assumed from Susquehanna and National Penn (0.02) (0.02) (0.02) (0.01) - Effect of interest expense related to acquired assets - - - 0.01 Core net interest margin 3.16% 3.18% 3.12% 3.15% 3.16% 26 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. 1
Non-GAAP Reconciliations1 27 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 significant gains and charges. (Dollars in millions) Adjusted return on average assets Net income $587 Plus: merger-related and restructuring charges, net of tax 58 Adjusted net income $645 Average assets $223,399 Plus: impact of merger-related and restructuring charges, net of tax 29 Adjusted average assets $223,428 Return on average assets (excluding merger-related and restructuring charges), as adjusted 1.16% For the Quarter Ended June 30 2016
Non-GAAP Reconciliations1 28 (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 greater understanding of ongoing operations and enhance comparability of results with prior periods, as well as demonstrating the effects of significant gains and charges. Adjusted return on average tangible common shareholders’ equity Net Income Available to Common Shareholders $541 Plus: Amortization of intangibles, net of tax 26 Merger-related and restructuring charges, net of tax 58 Adjusted tangible net income available to common shareholders $625 Average common shareholders' equity $26,519 LESS: Average intangible assets 10,574 PLUS: Average merger-related and restructuring charges, net of tax 29 Adjusted average tangible shareholders' equity $15,974 Adjusted return on average tangible common shareholders' equity 15.76% For the quarter ended June 30 2016
29 Non-GAAP Reconciliations1 (Dollars in millions) Link Quarter Average Balance Growth Adjusted for Acquisitions June 30, 2016 Link Qtr. Loans and Leases: Reported Acquired Adjusted Adj. Growth Ann.% Commercial and industrial $51,646 $(2,505) $49,141 $1,128 9.4% CRE-income producing properties 14,786 (1,151) 13,635 145 4.3% CRE-construction and development 3,669 (129) 3,540 (79) (8.8%) Dealer floor plan 1,305 - 1,305 66 21.4% Direct retail lending 12,031 (889) 11,142 35 1.3% Sales finance 9,670 (154) 9,516 (533) (21.3%) Revolving credit 2,477 (8) 2,469 6 1.0% Residential mortgage 30,471 (967) 29,504 (360) (4.8%) Other lending subsidiaries 13,961 - 13,961 522 15.6% Acquired from FDIC and PCI 1,130 (102) 1,028 (70) (25.6%) Total loans and leases held for investment $141,146 $(5,905) $135,241 $860 2.6% June 30, 2016 Link Qtr. Deposits: Reported Acquired Adjusted Adj. Growth Ann.% Noninterest-bearing deposits $48,801 $(1,210) $47,591 $1,388 12.1% Interest checking 28,376 (1,765) 26,611 1,007 15.8% Money market and savings 63,195 (2,445) 60,750 326 2.2% Time deposits 18,101 (1,136) 16,965 81 1.9% Foreign office deposits - interest-bearing 1,865 - 1,865 1,113 NM Total deposits $160,338 $(6,556) $153,782 $3,915 10.5%
