BB&T Earnings 2019-09-30

BBT 10Q Quarterly Report

Balance Sheet	Income Statement	Cash Flow

Comparables ($MM TTM)
Ticker	M Cap	Assets	Liab	Rev	G Profit	Net Inc	EBITDA	EV	G Margin	EV/EBITDA	ROA
UBS	47,073	958,489	905,624	0	0	0	0	47,073			0%
ITUB	44,823	1,552,797	1,402,331	0	0	0	0	7,664			0%
COF	42,277	373,619	317,852	22,056	0	5,800	14,765	75,330	0%	5.1	2%
BK	41,672	381,168	339,333	0	0	3,972	8,984	34,463		3.8	1%
BBT	37,437	230,872	199,108	0	0	3,327	5,887	57,376		9.7	1%
STI	27,622	222,288	196,426	1,822	0	2,684	4,772	42,794	0%	9.0	1%
STT	25,295	228,332	203,294	11,895	0	2,446	4,002	32,008	0%	8.0	1%
MTB	22,545	121,555	105,863	0	0	2,028	3,506	28,929		8.3	2%
FITB	20,257	168,802	148,131	548	0	2,133	4,224	36,041	0%	8.5	1%
NTRS	19,168	126,551	115,745	956	0	1,521	2,922	19,168	0%	6.6	1%

Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________

FORM 10-Q

_____________________________

☒ Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

For the quarterly period ended: September 30, 2019

Commission File Number: 1-10853

_____________________________

BB&T CORPORATION

(Exact name of registrant as specified in its charter)

_____________________________



North Carolina		56-0939887
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

200 West Second Street
Winston-Salem,	North Carolina	27101
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code:		(336)	733-2000

______________________________

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $5 par value	BBT	New York Stock Exchange
Depositary Shares each representing 1/1,000th interest in a share of Series F Non-Cumulative Perpetual Preferred Stock	BBT PrF	New York Stock Exchange
Depositary Shares each representing 1/1,000th interest in a share of Series G Non-Cumulative Perpetual Preferred Stock	BBT PrG	New York Stock Exchange
Depositary Shares each representing 1/1,000th interest in a share of Series H Non-Cumulative Perpetual Preferred Stock	BBT PrH	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At September 30, 2019, 766,303,490 shares of the registrant's common stock, $5 par value, were outstanding.



TABLE OF CONTENTS
BB&T CORPORATION
FORM 10-Q
September 30, 2019
		Page No.
PART I - Financial Information
	Glossary of Defined Terms	1
	Forward-Looking Statements	3
Item 1.	Financial Statements
	Consolidated Balance Sheets (Unaudited)	4
	Consolidated Statements of Income (Unaudited)	5
	Consolidated Statements of Comprehensive Income (Unaudited)	6
	Consolidated Statements of Changes in Shareholders' Equity (Unaudited)	7
	Consolidated Statements of Cash Flows (Unaudited)	8
	Notes to Consolidated Financial Statements (Unaudited)
	Note 1. Basis of Presentation	9
	Note 2. Business Combinations	10
	Note 3. Securities	11
	Note 4. Loans and ACL	13
	Note 5. Other Assets and Liabilities	18
	Note 6. Goodwill and Other Intangible Assets	18
	Note 7. Loan Servicing	19
	Note 8. Deposits	20
	Note 9. Long-Term Debt	20
	Note 10. Shareholders' Equity	21
	Note 11. AOCI	22
	Note 12. Income Taxes	23
	Note 13. Benefit Plans	23
	Note 14. Commitments and Contingencies	23
	Note 15. Fair Value Disclosures	25
	Note 16. Derivative Financial Instruments	30
	Note 17. Computation of EPS	34
	Note 18. Operating Segments	34
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	36
Item 3.	Quantitative and Qualitative Disclosures About Market Risk (see Market Risk Management)	54
Item 4.	Controls and Procedures	59
PART II - Other Information
Item 1.	Legal Proceedings	59
Item 1A.	Risk Factors	59
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	59
Item 3.	Defaults Upon Senior Securities - (none)
Item 4.	Mine Safety Disclosures - (not applicable)
Item 5.	Other Information - (none to be reported)
Item 6.	Exhibits	60

Glossary of Defined Terms

The following terms may be used throughout this Report, including the consolidated financial statements and related notes.



Term	Definition
ACL	Allowance for credit losses
AFS	Available-for-sale
Agency MBS	Mortgage-backed securities issued by a U.S. government agency or GSE
ALLL	Allowance for loan and lease losses
ARRC	Alternative Reference Rates Committee of the FRB and the Federal Reserve Bank of New York
AOCI	Accumulated other comprehensive income (loss)
Basel III	Global regulatory standards on bank capital adequacy and liquidity published by the BCBS
BB&T	BB&T Corporation and subsidiaries
BCBS	Basel Committee on Banking Supervision
BHC	Bank holding company
Branch Bank	Branch Banking and Trust Company
BU	Business Unit
CB-Commercial	Community Banking Commercial, an operating segment
CB-Retail	Community Banking Retail and Consumer Finance, an operating segment
CCAR	Comprehensive Capital Analysis and Review
CCRC	Culture and Conduct Risk Committee
CD	Certificate of deposit
CDI	Core deposit intangible assets
CEO	Chief Executive Officer
CFO	Chief Financial Officer
CET1	Common equity Tier 1
CMO	Collateralized mortgage obligation
Company	BB&T Corporation and subsidiaries (interchangeable with "BB&T" above)
CRE	Commercial real estate
DIF	Deposit Insurance Fund administered by the FDIC
EGRRCPA	Economic Growth, Regulatory Relief, and Consumer Protection Act
EPS	Earnings per common share
EVE	Economic value of equity
Exchange Act	Securities Exchange Act of 1934, as amended
FASB	Financial Accounting Standards Board
FDIC	Federal Deposit Insurance Corporation
FHA	Federal Housing Administration
FHC	Financial Holding Company
FHLB	Federal Home Loan Bank
FHLMC	Federal Home Loan Mortgage Corporation
FNMA	Federal National Mortgage Association
FRB	Board of Governors of the Federal Reserve System
FS&CF	Financial Services and Commercial Finance, an operating segment
FTE	Full-time equivalent employee
GAAP	Accounting principles generally accepted in the United States of America
GNMA	Government National Mortgage Association
Grandbridge	Grandbridge Real Estate Capital, LLC
GSE	U.S. government-sponsored enterprise
HFI	Held for investment
HQLA	High-quality liquid assets
HTM	Held-to-maturity
IDI	Insured depository institution
IH	Insurance Holdings, an operating segment
IPV	Independent price verification
LCR	Liquidity Coverage Ratio
LHFS	Loans held for sale
LIBOR	London Interbank Offered Rate
MBS	Mortgage-backed securities
MRLCC	Market Risk, Liquidity and Capital Committee

BB&T Corporation 1



Term	Definition
MRM	Model Risk Management
MSR	Mortgage servicing right
MSRB	Municipal Securities Rulemaking Board
N/A	Not applicable
NCCOB	North Carolina Office of the Commissioner of Banks
NIM	Net interest margin, computed on a TE basis
NM	Not meaningful
NPA	Nonperforming asset
NPL	Nonperforming loan
NYSE	NYSE Euronext, Inc.
OAS	Option adjusted spread
OCI	Other comprehensive income (loss)
OPEB	Other post-employment benefit
OREO	Other real estate owned
ORMC	Operational Risk Management Committee
OT&C	Other, Treasury and Corporate
OTTI	Other-than-temporary impairment
Parent Company	BB&T Corporation, the parent company of Branch Bank and other subsidiaries
PCI	Purchased credit impaired loans
Peer Group	Financial holding companies included in the industry peer group index
PSU	Performance share units
Re-REMICs	Re-securitizations of Real Estate Mortgage Investment Conduits
Regions Insurance	Regions Insurance Group, acquired by BB&T effective July 2, 2018
ROU Assets	Right-of-use assets
RSU	Restricted stock unit
RUFC	Reserve for unfunded lending commitments
SBIC	Small Business Investment Company
SEC	Securities and Exchange Commission
Short-Term Borrowings	Federal funds purchased, securities sold under repurchase agreements and other short-term borrowed funds with original maturities of less than one year
Simulation	Interest sensitivity simulation analysis
SunTrust	SunTrust Banks, Inc.
TBA	To be announced
TDR	Troubled debt restructuring
TE	Taxable-equivalent
Truist	Truist Financial Corporation
U.S.	United States of America
U.S. Treasury	United States Department of the Treasury
UPB	Unpaid principal balance
VaR	Value-at-risk
VIE	Variable interest entity

2 BB&T Corporation

Forward-Looking Statements

This Quarterly Report on Form 10-Q 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 that are based on the beliefs and assumptions of the management of BB&T and the information available to management at the time that these disclosures were prepared. 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. Such factors include, but are not limited to, the following:



l	risks, uncertainties and other factors relating to the merger of SunTrust with and into BB&T, including the ability to obtain regulatory approvals and meet other closing conditions to the merger, and delay in closing the merger;
l	general economic or business conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, slower deposit and/or asset growth, and a deterioration in credit quality and/or a reduced demand for credit, insurance or other services;
l	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 economic instability and recessionary conditions in Europe;
l	changes in the interest rate environment, including interest rate changes made by the Federal Reserve, the discontinuation of LIBOR as an interest rate benchmark, as well as cash flow reassessments may reduce net interest margin and/or the volumes and values of loans and deposits as well as the value of other financial assets and liabilities;
l	competitive pressures among depository and other financial institutions may increase significantly;
l	legislative, regulatory or accounting changes may adversely affect the businesses in which BB&T is engaged;
l	local, state or federal taxing authorities may take tax positions that are adverse to BB&T;
l	a reduction may occur in BB&T's credit ratings;
l	adverse changes may occur in the securities markets;
l	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;
l	cyber security risks 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;
l	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;
l	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;
l	costs related to the integration of the businesses of BB&T and its merger partners may be greater than expected;
l	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;
l	significant litigation and regulatory proceedings could have a material adverse effect on BB&T;
l	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;
l	risks resulting from the extensive use of models;
l	risk management measures may not be fully effective;
l	fraud or misconduct by internal or external parties, which BB&T may not be able to prevent, detect or mitigate;
l	deposit attrition, customer loss and/or revenue loss following completed mergers/acquisitions may exceed expectations; and
l	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.

These and other risk factors are more fully described in this report and in BB&T's Annual Report on Form 10-K for the year ended December 31, 2018 under the sections entitled "Item 1A. Risk Factors" and from time to time, in other filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Actual results may differ materially from those expressed in or implied by any forward-looking statement. Except to the extent required by applicable law or regulation, BB&T undertakes no obligation to revise or update publicly any forward-looking statements for any reason. Readers should, however, consult any further disclosures of a forward-looking nature BB&T may make in any subsequent Annual Reports on Form 10‑K, Quarterly Reports on Form 10‑Q, or Current Reports on Form 8‑K.

BB&T Corporation 3

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

BB&T CORPORATION AND SUBSIDIARIES



Unaudited (Dollars in millions, except per share data, shares in thousands)	September 30, 2019			December 31, 2018
Assets
Cash and due from banks	$	2,027		$	2,753
Interest-bearing deposits with banks	866			984
Cash equivalents	114			143
Restricted cash	11			107
AFS securities at fair value	35,997			25,038
HTM securities (fair value of $18,970 and $20,047 at September 30, 2019 and December 31, 2018, respectively)	18,768			20,552
LHFS at fair value	1,442			988
Loans and leases	149,413			149,013
ALLL	(1,573		)	(1,558		)
Loans and leases, net of ALLL	147,840			147,455
Premises and equipment	2,022			2,118
Goodwill	9,832			9,818
CDI and other intangible assets	678			758
MSRs at fair value	919			1,108
Other assets	16,234			13,875
Total assets	$	236,750		$	225,697
Liabilities
Deposits	$	162,280		$	161,199
Short-term borrowings	10,405			5,178
Long-term debt	25,520			23,709
Accounts payable and other liabilities	6,242			5,433
Total liabilities	204,447			195,519
Commitments and contingencies (Note 14)
Shareholders' Equity
Preferred stock, $5 par, liquidation preference of $25,000 per share	3,057			3,053
Common stock, $5 par	3,832			3,817
Additional paid-in capital	6,931			6,849
Retained earnings	19,440			18,118
AOCI, net of deferred income taxes	(1,026		)	(1,715		)
Noncontrolling interests	69			56
Total shareholders' equity	32,303			30,178
Total liabilities and shareholders' equity	$	236,750		$	225,697
Common shares outstanding	766,303			763,326
Common shares authorized	2,000,000			2,000,000
Preferred shares outstanding	125			126
Preferred shares authorized	5,000			5,000

The accompanying notes are an integral part of these consolidated financial statements.

4 BB&T Corporation

CONSOLIDATED STATEMENTS OF INCOME

BB&T CORPORATION AND SUBSIDIARIES



Unaudited (Dollars in millions, except per share data, shares in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Interest Income
Interest and fees on loans and leases	$	1,886	$	1,772	$	5,611	$	5,064
Interest and dividends on securities	315		283		917		868
Interest on other earning assets	17		14		69		52
Total interest income	2,218		2,069		6,597		5,984
Interest Expense
Interest on deposits	271

Closing Price ($)	Shares Out (MM)	Market Cap ($MM)
$0.00	775	$37,437

10-Q	2019-10-25	Quarter: 2019-09-30
10-Q	2019-07-31	Quarter: 2019-06-30
10-Q	2019-04-30	Quarter: 2019-03-31
10-K	2019-02-26	Annual: 2018-12-31
10-Q	2018-10-26	Quarter: 2018-09-30
10-Q	2018-07-27	Quarter: 2018-06-30
10-Q	2018-04-30	Quarter: 2018-03-31
10-K	2018-02-21	Annual: 2017-12-31
10-Q	2017-10-27	Quarter: 2017-09-30
10-Q	2017-07-28	Quarter: 2017-06-30
10-Q	2017-04-24	Quarter: 2017-03-31
10-K	2017-02-21	Annual: 2016-12-31
10-Q	2016-10-24	Quarter: 2016-09-30
10-Q	2016-07-27	Quarter: 2016-06-30
10-Q	2016-04-29	Quarter: 2016-03-31
10-K	2016-02-25	Annual: 2015-12-31
10-Q	2015-10-30	Quarter: 2015-09-30
10-Q	2015-07-30	Quarter: 2015-06-30
10-Q	2015-04-27	Quarter: 2015-03-31
10-K	2015-02-25	Annual: 2014-12-31
10-Q	2014-10-27	Quarter: 2014-09-30
10-Q	2014-07-28	Quarter: 2014-06-30
10-Q	2014-04-30	Quarter: 2014-03-31
10-K	2014-02-26	Annual: 2013-12-31
10-Q	2013-10-31	Quarter: 2013-09-30
10-Q	2013-08-08	Quarter: 2013-06-30
10-Q	2013-05-02	Quarter: 2013-03-31
10-K	2013-03-01	Annual: 2012-12-31
10-Q	2012-11-02	Quarter: 2012-09-30
10-Q	2012-08-07	Quarter: 2012-06-30
10-Q	2012-05-04	Quarter: 2012-03-31
10-K	2012-02-27	Annual: 2011-12-31
10-Q	2011-11-09	Quarter: 2011-09-30
10-Q	2011-08-08	Quarter: 2011-06-30
10-Q	2011-05-06	Quarter: 2011-03-31
10-K	2011-02-25	Annual: 2010-12-31
10-Q	2010-11-09	Quarter: 2010-09-30
10-Q	2010-08-09	Quarter: 2010-06-30
10-Q	2010-05-07	Quarter: 2010-03-31
10-K	2010-02-26	Annual: 2009-12-31

8-K	2019-12-23	Regulation FD, Exhibits
8-K	2019-12-05	M&A, Officers, Amend Bylaw, Other Events, Exhibits
8-K	2019-12-03	Other Events, Exhibits
8-K	2019-11-19	Other Events, Exhibits
8-K	2019-11-08	Regulation FD, Exhibits
8-K	2019-09-16	Other Events, Exhibits
8-K	2019-09-10	Regulation FD, Exhibits
8-K	2019-08-27	Other Events, Exhibits
8-K	2019-08-01	Other Events, Exhibits
8-K	2019-07-30	Shareholder Vote, Other Events, Exhibits
8-K	2019-07-24	Amend Bylaw, Other Events, Exhibits
8-K	2019-07-22	Other Events, Exhibits
8-K	2019-07-18	Earnings, Exhibits
8-K	2019-06-14	Enter Agreement, Exhibits
8-K	2019-06-12	Other Events, Exhibits
8-K	2019-05-28	Officers, Exhibits
8-K	2019-04-30	Shareholder Vote
8-K	2019-04-18	Other Events, Exhibits
8-K	2019-04-18	Earnings, Exhibits
8-K	2019-03-18	Other Events, Exhibits
8-K	2019-03-11	Other Events, Exhibits
8-K	2019-03-01	Officers, Other Events, Exhibits
8-K	2019-02-07	Other Events, Exhibits
8-K	2019-02-07	Enter Agreement, Officers, Exhibits
8-K	2019-01-29	Amend Bylaw, Exhibits
8-K	2019-01-17	Earnings, Exhibits
8-K	2018-12-31	Officers
8-K	2018-12-10	Regulation FD, Exhibits
8-K	2018-12-06	Other Events, Exhibits
8-K	2018-10-22	Officers, Exhibits
8-K	2018-10-18	Earnings, Exhibits
8-K	2018-09-13	Regulation FD, Exhibits
8-K	2018-08-07	Regulation FD, Exhibits
8-K	2018-07-19	Earnings, Exhibits
8-K	2018-06-28	Other Events
8-K	2018-06-05	Other Events, Exhibits
8-K	2018-06-01	Other Events, Exhibits
8-K	2018-04-24	Shareholder Vote, Exhibits
8-K	2018-04-19	Earnings, Exhibits
8-K	2018-01-18	Earnings, Exhibits
8-K	2017-12-31

EX-31.1	ex311-certification3q19.htm
EX-31.2	ex312-certification3q19.htm
EX-32	ex32-certification3q19.htm