The Road Ahead Brant Standridge President, Retail Banking. Investor Day 2018

Transcription

1 The Road Ahead Brant Standridge President, Retail Banking Investor Day 2018

2 Key Takeaways 1Organizing for exceptionalism Enhancing the 2client experience 3Capitalizing on untapped revenue opportunities 4Optimizing and streamlining our businesses while building the roadmap for the new retail bank 2

3 Diversification Drives Revenue and Net Income Revenue Diversification by Segment Net Income Mix by Segment Financial Services & Commercial Finance 17% Insurance Holdings & Premium Finance 16% Community Banking Retail & Consumer Finance 44% Insurance Holdings & Financial Premium Services & Finance Commercial 7% Finance 17% Community Banking Retail & Consumer Finance 43% Community Banking Commercial 23% Community Banking Commercial 33% YTD as of 09/30/2018 Total segments excluding Other, Treasury & Corporate 3

4 Retail Bank Overview Lines of Business Community Banking Retail Provides Consumer and Small Business clients with a full service, consultative banking experience through deposits, lending and fee-based products and services Card Based Services Provides credit/debit/prepaid cards and bill pay products for Retail and Commercial clients as well as payment processing through its three lines of business: BankCard Services, Retail Payments and Merchant Services Mortgage Provides mortgage products and services through Home Mortgage Retail Lending, Correspondent, Mortgage Servicing and Mortgage Warehouse Lending (MWL) Dealer Retail Services Provides financing for the purchase of new and used automobiles, as well as marine and recreational vehicles through its lines of businesses: Dealer Finance, Regional Acceptance Corporation (RAC), BB&T Recreational Lending and Hann Financial Services Sheffield Provides consumer financing for the purchase of outdoor power equipment, powersports and trailers through established original equipment manufacturer relationships and an expansive dealer network Commercial Equipment Capital (CEC) Provides small ticket financing structures and programs for commercial equipment as well as software for businesses, non-profits and municipalities nationwide Sheffield 5% Dealer Retail Services 15% Mortgage 14% Card Based Services 15% Revenue Mix CEC 1% Community Banking Retail 50% Revenue Mix as of YTD 09/30/2018 4

5 Financial Overview 5

6 Turning to Stronger Performance $ in billions Loan Production Average Loan Balances $8.0 $7.0 $7.7 $7.1 $70.0 $64.3 $63.6 $62.8 $63.5 $65.4 $6.0 $5.7 $6.0 $5.4 $60.0 $5.0 3Q17 4Q17 1Q18 2Q18 3Q18 $50.0 3Q17 4Q17 1Q18 2Q18 3Q18 Revenues (TE) Average Deposits $5.2 $5.0 $4.7 $4.8 $5.0 $5.1 $80.0 $70.0 $76.0 $78.6 $78.8 $14.0 $15.7 $16.8 $4.5 $60.0 $62.0 $62.9 $62.0 $ est $ YTD 2018 Interest-bearing Deposits DDA 2018 estimated is 09/30/2018 annualized 6

7 Turning to Stronger Performance $ in billions Efficiency Ratio Expenses 60.0% 40.0% 50.5% 53.9% 51.3% $3.00 $2.75 $2.50 $2.47 $2.73 $ % $ % YTD 2018 $ est Branch Count Net New Accounts* 2,500 2,000 2,196 2,049 1,958 75,000 50,000 61,865 3MM+ active digital users 1,500 25,000 6,384 13,205 1, /30/ YTD 2018 *Includes retail and commercial 2018 estimated is 09/30/2018 annualized 7

8 Organizing for Exceptionalism 8

9 Organizing for Exceptionalism: Client-Focused Retail Bank Home Mortgage 747K Mortgages Community Banking Retail 4.3MM Households Card Based Services 3.8MM/54K Cardholders/ Merchants Client Care Center 15,000 client contacts daily Sheffield BB&T Retail & Small Business Clients 950K Clients Commercial Equipment Capital 17K Clients Dealer Retail Services 787K Indirect Loans 9

10 Organizing for Exceptionalism: Responding to the Client Leadership Regional Visits Voice of the Client 1 Client Experience Client Feedback 6 Payments 2 Lending 5 Digital/ Omnichannel 3 Deposits and New Household 4 Generation Fee Generation ATM Roadmap New Lending Products & Processes Branch Channel Roadmap R 3 Digital Migration Small Business Enhancements New Deposit Products Client Problem Resolution 10

11 Enhancing the Client Experience 11

12 Enhancing the Client Experience: A Holistic View of Our Clients Journeys Digital Branch Client Service Centers ATM Preferences Voice of the Client Platform 12

13 Enhancing the Client Experience: Through Digital Self Service Card Based Services Building consistent client experience across card products Dealer Retail Services Phase 1: Released RAC mobile app in early 2018 Phase 2: Including biometric functionality Touch ID and face recognition ACH enrollment, alerts & notifications App store rating requests CARD CONTROLS INTERACTIVE FRAUD ALERTS MOVING TOWARD OMNICHANNEL EXPERIENCE 13

14 Enhancing the Client Experience: Through Digital Self Service, Moving the Home Mortgage Process Online Shopping Website Fulfillment Client Portal Pre-Qual Digital App 23.5% of applications currently received via Digital App Application Digital App 14

15 Capitalizing on Untapped Revenue Opportunities 15

16 Capitalizing on Untapped Revenue Opportunities New products and enhancements launched in 2018 fulfilling client needs profitably Enhanced Money Market Account FHA Re-Entry Mortgage Retail Regional Pricing New Retail & Business BankCards Enhanced Business Checking Home Equity Select Enhanced Unsecured Lending Near-Prime Auto Sheffield Marine Lending Expansion Secured Credit Card Savings Accounts Commercial Equipment Capital Correspondent Lending Bid Tape Mortgage HH Penetration Improvement 16

17 Capitalizing on Untapped Revenue Opportunities: Financial Wellness Totals 2018 Expanded program to college students SAV 55% $3.4 Billion DDA 45% $2.8 Billion Focused on perks and savings on banking services and products $7.0 $6.0 $5.0 Portfolio Avg. Balances Launched program and Sales Officer role 2017 Relaunched to focus on Financial Wellness 1-on-1 consultations Financial education via BB&T Financial Foundations U platform money management tools Benefit-rich banking package $3.0 $2.0 $ $ DDA Work Total $ Deposits Work Total Current Contribution 16% of total retail DDA portfolio #s 18% of total retail DDA production #s 125,000 participating companies 17

18 Capitalizing on Untapped Revenue Opportunities Reconceptualizing Auto Lending One Product with Multiple Distribution Channels Single Underwriting Process All Community Bank auto loans underwritten using Dealer Finance processes and Origenate system Document Prep Vendor manages documents and compliance content elending Web-based user interface for associates and consumers Includes online closing and esignatures Shopping Title processing moved to DealerTrack Online Car Buying Speed Efficiency Online Integrate shopping tool and intelligent marketing to help consumers find the right car at the right price and be the obvious financing partner 18

19 Capitalizing on Untapped Revenue Opportunities: Small Business Branch Focus Market Leader Outbound Face-to-Face Contacts per Day 3MM+ Small Businesses in branch network trade radius Focus on increasing Planned Purposeful Calls Leadership participation and demonstrations Synergy with Commercial Equipment Capital to capture Small Business wallet share x increase yielding ~10,000 more calls per week Q17 1Q18 2Q18 3Q18 19

20 Optimizing and Streamlining Our Businesses 20

21 Optimizing and Streamlining Our Businesses: Approach to Branch Optimization 2,400 Branch Network Optimization: Count Trend 2,200 2,000 1,800 1,600 1,400 1,200 1,000 BB&T expects to add branches in select markets If industry context is unchanged and closed branch performance metrics remain strong, closure trends will continue through

22 Optimizing and Streamlining Our Businesses: Approach to Branch Optimization Branch Viability Scoring Current performance metrics of the branch Client usage metrics of the branch Risk of revenue loss vs. cost savings MicroMarket Attractiveness Scoring For each branch s defined target market Density of businesses, employees and population Target market growth prospects Competitive landscape Branch Viability Tiers 1-5 Market Attractiveness Tiers % 0% 1% 0% 0% 4 2% 3% 3% 0% 0% 3 4% 7% 4% 2% 0% 2 9% 7% 7% 3% 1% 1 11% 13% 11% 9% 2% Lower opportunity branches remain a high percentage of potential future closures 22

23 Optimizing and Streamlining Our Businesses: Approach to Branch Optimization Optimized Branch Net Retention Rates 100.0% 99.5% 99.0% 98.5% 98.0% 97.5% 97.0% 96.5% December 2016 August 2017 May 2018 Weighted Avg. May 2017 December 2017 August % Net client retention rates tied to closed branches remain high due to: Branch Site Selection Process Client Outreach Retention Incentives Digital Self Service Education Leave-Behind ATMs 23

24 Optimizing and Streamlining Our Businesses: Robotics Process Automation & Scalable Processes Branch Network Automating branch operations Upgrading branch scheduling tools Enabling esignature capabilities Card Based Services Automating Visa fraud reporting Automating BankCard credit balance refunds and debit card low dollar chargebacks Expanding automated credit card underwriting across more products Dealer Retail Services Automating loan underwriting process Digitizing loan funding process Simplifying dealer onboarding process Home Mortgage Enabling full esignature and evault Automating asset and income verification Automating Retail workflow management 24

25 Roadmap to Building the New Retail Bank 25

26 Roadmap to Building the New Retail Bank Dealer Retail Services Road to Greatness Home Mortgage s Strategic Pillars Creating a More Efficient Model Welcome Home Driving Enhanced Margins Grow Retail Originations Improve point of sale origination technology Increase Retail sales force Exploring Untapped Opportunities Decreasing Volatility of Losses Optimize Correspondent and MWL Maximize Servicing Operations Capitalize on Quality, Risk Controls, and Economics Streamline and automate loan review Increase client base Digitize the servicing experience Leverage robotics for efficiency Replace core origination platform Strengthen risk controls Improving Sales Effectiveness Attract, Retain, and Develop Top Talent Improve talent development Enhance talent acquisition tools and process 26

27 Roadmap to Building the New Retail Bank: Card Based Services Strategic Pillars & Areas of Focus Strategic Pillars IMPROVE CLIENT ENGAGEMENT INCREASE SALES EFFECTIVENESS EXPAND SHARE OF WALLET OPTIMIZE BUSINESS EFFECTIVENESS Card Payment Focus Areas World-Class Products and Services Merchant Focus Areas Sales Model Transformation Distribution Model Capabilities Virtual Merchant Center Activation, Usage and Retention Technology Investment Roadmap Business Intelligence and Analytics Business Efficiency and Effectiveness BB&T Retail & Small Business Clients Process Automation; Online Capabilities Market Competitive Products and Solutions 27

28 Roadmap to Building the New Retail Bank: Community Bank s Retail Reimagine and Reinvestment R3 Marketing Increased more targeted investments to enhance brand and drive household growth Identifying Optimization Opportunities Digital/Omnichannel Advancing our Digital Storefront Client Care Center Leveraging technology and increasing FTEs to better and more efficiently serve clients Virtual Banking Center Extending BB&T s reach beyond the branch by expanding client relationships virtually Branch Channel Investing in a distinct branch experience and driving digital engagement ATM Channel Expanding technology capabilities to offer clients more self-service options 28

29 Key Takeaways 1Organizing for exceptionalism Enhancing the 2client experience 3Capitalizing on untapped revenue opportunities 4Optimizing and streamlining our businesses while building the roadmap for the new retail bank 29