BB&T 2012 Annual Report Download - page 52

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Executive Overview
Significant accomplishments in 2012
The Company’ s more significant accomplishments during 2012 were:
 Record net income available to common shareholders of $1.9 billion represented a 48.6% increase over the prior
year
 Strong growth in noninterest income was driven by record insurance, mortgage banking and investment banking and
brokerage commission revenues
 Continued improvement in credit quality with NPAs, excluding covered foreclosed property, declining $914 million,
or 37.3%. NPAs are now at their lowest level since June 30, 2008
 Strong results from the FRB’ s 2012 CCAR process, which resulted in a 25% increase to the quarterly dividend in
2012 and a 15% increase to the quarterly dividend in the first quarter of 2013. Highlights of the stress test results
include:
o One of the strongest Tier 1 common ratios (excluding capital issuances) among traditional banks
o Lowest loan loss rate under the stress scenario among traditional banks
 Total end of period loans held for investment increased 6.6% driven by growth in the residential mortgage,
commercial and industrial, other lending subsidiaries and direct retail lending portfolios
 Continued improvement in deposit mix and average cost, as evidenced by a 26.4% increase in noninterest-bearing
deposits, and a 25 basis point reduction in the average cost of interest-bearing deposits, during 2012
 Successful acquisition of Crump Insurance in April 2012 resulted in BB&T establishing a #1 market share in
wholesale life and a #2 market share in wholesale property and casualty in U.S. markets
 Successful acquisition of BankAtlantic in July 2012, which enhanced BB&T’ s presence in the Southeast Florida
market and resulted in a $3.5 billion increase in deposits
Challenges
BB&T’ s business has become more dynamic and complex in recent years. Consequently, management has annually
evaluated and, as necessary, adjusted the Company’ s business strategy in the context of the current operating environment.
During this process, management considers the current financial condition and performance of the Company and its
expectations for future economic activity from both a national and local market perspective. The achievement of BB&T’ s
key strategic objectives and established long-term financial goals is subject to many uncertainties and challenges. In the
opinion of management, the challenges that are most relevant and likely to have a near term impact on performance are
presented below:
 The impact of U.S. fiscal debt, budget and tax negotiations
 Intense competition within the financial services industry
 Cost and risk associated with the regulatory initiatives
Overview of Significant Events and Financial Results
Despite challenging market conditions throughout the year, BB&T produced record annual earnings for 2012. These results
were driven by broad-based loan growth, improvements in deposit mix and cost, a significant increase in noninterest income,
and a continued focus on controlling noninterest expense. In addition, BB&T continued to make significant progress towards
reducing the level of NPAs, which had a beneficial impact on credit costs incurred during the year.