BB&T 1Q16 Earnings Call Notes

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BB&T (BBT) Kelly S. King on Q1 2016 Results

Economy is good but not great

“just a couple of comments about the economy. It is what I would call good but not great. It’s okay. It’s rocking along about like it’s been rocking along, 2% to 2.5%. It’ll vary a little bit quarter-to-quarter. But we, the United States economy is on a sustained 2% to 2.5% kind of growth pattern. And it will stay that way in my humble opinion for a good while.”

We see no practical possibility of recession because there is pent up demand for continuing investment

“We see no practical possibilities of recession, notwithstanding the fact there’s been a lot of conversation about that. And the reason is because we think there is a very, very strong solid pent-up need for continuing investment. When I talk to business people, they’re investing in a way that I call passive investment. That is to say, they’re not excited enough about the future to go out and make major expansions and so forth. But they’re driving trucks that have 250,000 miles on it. They got ten-year old equipment, and so stuff just wears out. And so, that’s why you have to keep investing.”

Made a decision to be in the energy business. Oil more likely to be at $50 than $30

“So we made a decision, Betsy, some time ago to be a long-term player in the energy market. We are not going to change that long-term strategy. Energy is an important business for the country, for the world and for us. We enter into relationships on a very conservative selection basis and a conservative underwriting basis. Obviously everybody is really energized about – no pun intended – about concerns about energy now. But – and we’re taking it very seriously. And we’re marking our book really aggressively and all that. But look, I think there’s a much higher chance that oil will be at $50 by the end of this year than $30. And I think over the long term, the energy business still will be a really good business.”

Not focusing on bank or insurance M&A anymore

“I’m not trying to say that we wouldn’t dare do any tiny little bitty something. But as a practical matter, we are just not focusing on M&A now in insurance or bank, which is our two primary areas. The truth is we just got a lot going on in both of them. We’ve just (47:31). And there’s a time to buy, and there’s time to run. And the last 24 months was a time to buy, because the times were right. There was a window for us, and there was some really good opportunities. And we’re really happy about what we did. And now is the time to take time and to adjust what we’ve done and run it really, really well and get the benefit for the benefit of our shareholder.”