BB&T 1Q17 Earnings Call Notes

Kelly King – Chairman and Chief Executive Officer

Main street has been struggling for eight years

“I just want to make sure you understand with regard to Community Bank, this is a bit esoteric, but over the last eight years, Main Street has really struggled and we are primarily a Main Street lender. As you know, most of the growth in the market over the last several years has been by large companies who have been to a large capital type restructurings and have just paid it actively a very strong international market, which we don’t participate in, but relative to a lot of our competitors, we had a harder go of it, because our focus on Main Street. Now we believe Main Street is changing, which I will talk about in a moment and getting better and so if it does, if it does get better and you should expect to see BB&T’s loan potential do relatively better than many of our competitors who have been depending on the long growth coming from a lot of the largest corporations and their international exposure.”

Things are happening to improve the hard data

“Well, I think there is kind of the big – really big question for us all right now. First of all with regard to why has the increased optimism not yet shown up in hard data, that’s not pricing it all to me because remember a period of time, we’re going to have 90 or sort of days, and it takes a period of time for that optimism to translate into evaluating what kind of projects you’re going to do or you’re going to buy, et cetera. But as I said earlier, we are already seeing that. We are seeing actual hard data were clients are talking to us about expansions, I can loan requests for expansions, but frankly out of rate we haven’t seen in eight years so that’s why we said our community banks having it’s best production ever, it is happening for us on Main Street.”

If DC doesn’t do anything could that stop it?

” Now the question implicit in your question is, if they don’t do anything in Washington do that chill it could stop it. And the answer is obviously yes. If they make no progress in Washington at all then eventually that optimism will turn to pessimism and now return into the reduction and spending and that were return into has more economic growth, and is it do really do a badly business sort of capable of then all return into recession.”

Companies want to invest and need to invest

“But here is the reason that the resiliency of the activity in the marketplace will be stronger than you might think. Remember that eight plus years these companies have not been investing. They’re using 20 year old computers. They’re driving trucks of 300,000 plus miles. At some point regardless of how frugal you want to believe you can’t got a replacement of few computer and buy few trucks. And then the other thing is kind of a psychology and that is after feeling bad and conservative and not invest in fair reviews [ph] you kind of want to invest. So number one, they need to invest, number two, they want to invest. So that’s why you’re seeing this really little excitement out there today.”

I would be worried if we do’t have progress by the end of the year

” I don’t think it will wine immediately, but by the end of the year let’s say if there’s been no positive movement on taxes regulation, healthcare and all that combined then I will be very worried to be honest. And so my message to Congress which I sent chance I get is, there’s a lot riding on them get their right together and you know we’re talking about a future for our kids and our grandkids, we have a wonderful opportunity here to grow this country at much faster pace and shame on them if they don’t execute.”