BB&T 2Q17 Earnings Call Notes

Kelly King – Chairman and Chief Executive Officer

Main street continues to rebound

“I just want to mention to you again that Main Street continues to rebound. Our confidence is up. I’ve been in 23 of our 26 regions in the last few months. Every single region is reporting in terms of – and I’m talking to the people that are making the loans, everyone is talking about increased optimism on the part of small- and medium-sized businesses. Main Street, as I’ve talked about over the years, has been kind of dead in the water for the last seven or eight years.”

Using AI and robotics to reduce costs

“Finally, with regard to expenses, we are laser-focused on expenses. We have a number of expense initiatives. We are using, for example, artificial intelligence, AI, robotics and moving across our backroom. Just to give you a flavor for that, Daryl did a really nice job earlier this year in taking just one project, one smaller project where we have in the accounting area, account reconciliation one person with a computer, one software reconciling account that took two hours. We put robotics on top of that. And in a virtual period of time, the new robotics software could do it in 15 minutes. So we now have six or seven more substantial projects that we are moving through to further improve the case, after which we will be going enterprise-wide in terms of finding ways to take these repetitious activities and apply good digitization and artificial intelligence to find more efficient and effective ways to reduce our cost.”

Regulatory pressure is lifting

“We believe we have been through eight years of having to deal with an extreme amount of micro management regulatory pressure. We believe that is lifting. And we are going to be focusing on how to run our business based on what makes sense to us. And so I’m challenging everybody to go back and reconceptualize their business and, frankly, be prepared to run their businesses with less resources.”

Our current portfolio is clean as a whistle

“There are no credit issues. Our current portfolio is clean as a whistle. We just have these two portfolios, about $30 billion in mortgages and about $10 billion in auto, that are sub-optimizing in terms of performance. And so in a rising rate environment, you don’t exactly want to keep growing real fast your mortgage fixed rate portfolio, and I think everybody understands that. And the auto portfolio, we started 1.5 years so ago changing the nature of how we have our revenue-sharing arrangement with these dealers. We are an outlier in the industry, but it is a better, more consumer-friendly approach that we are taking.”

People are optimistic

“Everything we’re seeing in terms of commentary from the client, this is I’m getting from talking to our lenders. I’m getting it from talking to the business people. I’ve had 23 lunches where I’m sitting and talking to six to eight business people over the last few months. I’ve gotten this across our entire footprint. I’ve got a pretty good feel what the clients are directly saying. I’ve got a really good feel of what our production people are saying. And I’ve got a good feel for what the actual pipeline shows.

Can’t guarantee that Washington wont derail it but people not focusing on it. People are expecting a tax deal though

All of that is very, very positive. And can I guarantee that all the craziness in Washington will not derail that? No. But I’ll be honest with you as I’ve talked to business people out there, they’re not worried about all this craziness going on in Washington. They’re just focusing on growing their business. Now I will say I think they are expecting a tax reduction deal and, to a lesser degree, they’re counting on infrastructure. But if we get the tax reduction deal, they’ll continue.”