BB&T 2012 Annual Report Download - page 5

2012 Annual Report
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as they navigate an uncertain economy. Our mortgage banking
business generated record revenues in 2012 with the boom in
refinancings, and is positioned to continue bolstering our fee
income as the home-purchase market recovers. A diverse group
of other non-traditional, national businesses add to the revenue
mix, ranging from AFCO/CAFO/Prime Rate insurance premium
finance and Grandbridge Real Estate Capital commercial real
estate mortgage to our commercial leasing business and Sheffield
Financial power and sports equipment finance.
Our revenue is balanced between our national, non-banking
businesses and our community bank regions centered in the
fast-growing Southeast and Mid-Atlantic markets. We have
built strong market shares in those banking states and are
benefiting from long-term in-migration driven by economic
opportunity, lifestyle advantages and warm weather. BB&T’s
community bank structure offers a key competitive advantage
by encouraging our bankers to make most decisions locally
while also offering clients the diverse products and efficiency of
the nation’s sixth-largest branch network.
To gauge the power of BB&T’s multi-cylinder revenue engine,
consider this: Over the last five turbulent years, our adjusted
revenue increased by 32% while the median of our peer
group was 7%.
None of this would be possible without BB&T’s value proposition,
which delivers the absolute best service quality in the
marketplace. Independent surveys of our key lines of business
consistently rank BB&T at the top of the industry. We rank No. 1
among our in-market peers in overall satisfaction in Maritz
Research’s survey of retail clients. For an unprecedented third
consecutive year, BB&T ranked highest among primary U.S.
mortgage servicing companies by J.D. Power and Associates.
BB&T’s website ranked first for best client experience in online
banking in Keynote’s 2012 Competitive Study, and the list goes on.
While we appreciate the accolades, we recognize that they last
only as long as we deliver an equally strong value proposition to
our associates who take such good care of our clients. That’s why
we devote so much attention to building trusting relationships
with our associates, based on our long-held values. Behind
the values is the simple but powerful premise that strong
character and judgment lead to success and, most importantly,
happiness – a sense of self-esteem and pride in our work. We do
not take any of this for granted. In a recent anonymous survey
of associates, BB&T scored higher in virtually every category
than a year earlier. One finding that I am most proud of:
92% of our associates – up 2 percentage points – say they
are proud to work at BB&T. While this is an extraordinary
testament to the commitment and passion of our associates,
we will not be satisfied until we reach 100%.
Thanks largely to our associates, BB&T never loses sight of our
commitment to help the communities where we live and work.
During times of economic hardship over the last five years,
our associates have touched the lives of more than 6.7 million
people in need with more than 4,400 community service projects
as part of our Lighthouse Project.
These challenging years have been a powerful reminder that,
first and foremost, our clients expect and deserve safety and
security in their bank. We are proud that BB&T has emerged
from this period stronger than ever with capital levels well
exceeding regulatory requirements. That strength gives us the
flexibility to meet our bottom-line commitment: optimizing
the long-term return to our shareholders by seizing organic
growth opportunities and paying stable, growing dividends –
BB&T’s top two priorities in deploying our capital. In addition,
we have made major investments in building even stronger risk
management systems while aggressively reducing our problem
assets, now at the lowest levels since the beginning of the “Great
Recession.” Another imperative in our still-sluggish economy
is tightly controlling costs. BB&T continues to outperform our
peers in efficiency measures. At the same time, we have avoided
the large layoffs suffered by other banks, and in fact have been
selectively hiring new associates to take advantage of growth
opportunities in Texas and elsewhere.
While we believe our strategy positions BB&T to outperform
our peers regardless of the economic environment, we must
remain vigilant in a global economy that remains fragile and
an interest-rate environment that is squeezing net interest
margins. My biggest concern is businesses remain reluctant
to borrow and invest because of uncertainty and indecision
about important fiscal issues by our nation’s political leaders.
Moreover, the decisions Congress has made in response to
excess leveraging and other abuses by some Wall Street
banks and mortgage lenders have hamstrung Main Street
banks, including BB&T, which avoided the excesses. We do
need to learn from and remedy our mistakes – and we have
with sensible regulations such as limiting “too big to fail”
and requiring stronger capital and liquidity, while market
forces have punished the worst violators. But we need to be
careful about overreaction and creating so many regulatory
constraints that we hamstring businesses and restrict their
ability to take risk and earn a just reward.
We are seizing opportunities to increase the value of our banking
and non-banking businesses with revenue-generating initiatives that will
assure BB&T’s prosperity in any economic environment.