Enhancing BB&T’s Risk / Return Advantage

in a ‘Disrupt or Die’ EnvironmentClarke R. Starnes, IIIChief Risk Officer

Investor Day 2018

2

Key Takeaways

1Consistent best in

class risk adjusted returns

New risks are

resulting fromindustry

innovations23

Adapting risk and

control programs

while taking

advantage of current and future

opportunities 4BB&T will maintain

its conservativethrough-the-

cycle approachto credit risk, with

a focus on

diversification

and granularity

3

BB&T’s Fundamental Approach to Risk

Management

4

BB&T’s Consistent, Disciplined View of Risk Appetite...

Through-the-Cycle

Perspective: Attractive returns generated by a

business unit should not be

entirely dependent on a

growing economy

Low Variability and High

Resiliency: Favor business activities that do not have

large swings in profitability

and can bounce back

quickly from a recession

or stress period

Diversification and

Granularity: Cannot be overly dependent on a

particular sector, loan

type, business unit, or

geography to generate

revenues and earnings

...consistently yields best in class risk adjusted returns

5

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

BB&T Peers

$0

$50

$100

$150

$200

$250

$300

$350

$400

Net Loss Total - BB&T

Net Loss Total - Average

(Participating Banks*)

Consistently Lower Nonaccrual Loans and

Operational Losses

Nonaccrual Loans / Loans

Source: S&P Global, regulatory reportsPeers include BAC, CFG, COF, FITB, WFC, HBAN, KEY, MTB, PNC, RF, STI and USBABA Loss Data Sharing Consortium: BBT, BMO, BOKF, BPOP, CFG, CMA, DFS, FHN, FITB, FRC, HBAN, HWC, KEY, MS, MUFG, RF, SAN, STI, SYF, TCF, USAA, USB, ZION; BBT joined 2008

Net Operational Losses per $1 Million in Assets

6

DFAST Results Support BB&T’s Best-in-Class

Risk / Return Positioning

BB&T Risk / Return Positioning vs Peers (2018 DFAST)

Only bank in higher return / lower risk quadrant for each DFAST cycle (2014-2018)

CCAR Peers: CFG, FITB, HBAN, KEY, MTB, PNC, RF, STI, USB and WFC

Source: S&P Global, Dodd-Frank Act Stress Test 2018: Supervisory Stress Test Methodology and Results

Average Return

Ave

rag

e R

isk

(Higher Return, Lower Risk)

(Lower Return, Lower Risk)

(Higher Return,

Higher Risk)

(Lower Return,

Higher Risk)0.50%

0.75%

1.00%

1.25%

1.50%

1.75%

2.00%

2.25%

1.0% 1.5% 2.0% 2.5% 3.0%

% R

etu

rn2

01

7 A

ctu

al P

PN

R L

ess

20

17

Act

ual

Lo

ss R

ate

% Risk(Difference between FRB Severely Adverse Stress Loss Rate and 2017Actual Loss Rate)

7

Structural Innovation Requires Risk

Management Programs To Adapt and Evolve

8

BB&T is Embracing Structural Changes That are

Significantly Impacting the Banking Industry

Technological

Capabilities

Regulatory

Requirements

Demographics

Economics

Client

Expectations

Non-traditional

Market Entrants

Fintech

Partnerships

Evolving Client and Market Participant

Experience

9

BB&T’s Risk Management Framework Is Evolving to Take

Advantage of These New Opportunities

New Technology and Expanded Ecosystems

Continuous Development

Enterprise Risk Transformation

Journey led,proposition based

products with

integrated risk and

controls

Secure data-driven

digital frameworks and monitoring

techniques to identify

and assess emerging

risks utilizing platform approaches

Updated and

integrated governance

operating models and practices to

enable and manage

continuous development risks

Risk management capability

transformation to

enable and manage

business transformation and new digital banking

10

Change Risk

Compliance Risk

Credit Risk

Cybersecurity Risk

Data Risk

Financial Crimes Risk

Fraud Risk

Privacy Risk

Reputation Risk

Strategic Risk

Technology Risk

Vendor Risk

Industry Innovation Introduces New and Emerging Risk

Considerations...

...and requires comprehensive evaluation and rigorous control programs

APIs

3rd Party

Aggregators

Open

Banking

4th Party

Vendor

Providers

Agile

Development

Public

Cloud

Faster

Payments

Fintech

Partnerships

RPA

11

Enhancing BB&T’s Risk and Control Programs

12

Prevalent in Nearly All Disrupt or Die Initiatives

Change

Risk

Vendor

Risk

▪ Changes in products/services/processes are

evaluated comprehensively to ensure risk is

managed within appetite

▪ Change risk management integrates risk

specialties and risk centers of excellence

▪ Iterative approach supports speed to market

▪ Increasing use of vendors to deliver new

products, services, and technologies

▪ Risks such as cyber and 4th party

concentrations require enhanced risk

management practices

Evaluation of proposed industry/shared utilities and consistent certification standards

▪ Risk Governance

▪ Cyber Security

▪ Operational Resilience

▪ Application Development

▪ Digital Strategy

▪ Data Governance

13

▪ Advanced Behavioral Analysis

▪ Biometric Authentication

▪ Data Tokenization

▪ Next Generation Data Protection

▪ Encryption

▪ Innovative Authentication Options

Digitization and Adoption of New Technologies Require

an Integrated View of Technology Risks

Established new independent Chief Technology Risk Officer role

Covert Sound-printing

Improve Detection

Capabilities

Align CapabilitiesAdvanced Link Analysis

14

A Paradigm Shift Is Required for Managing Financial

Crimes Related Risk

Machine LearningEnterprise Authentication

Data Enrichment

Robotic Process

Automation

Automated Transaction

Monitoring

Visual Metric Reporting

Integrated Case

Management

Robust Client Risk Scoring

Convergence and greater integration of BSA/AML, Fraud, and Cyber Threat programs

15

Compliance Risk Requires Continuous, Data Driven Surveillance and Monitoring Systems

▪ Technology enabled

surveillance allows

Compliance to be

more nimble to

support the pace

and degree of

change

▪ Heightened

awareness of privacy

risk comes with

digital, ‘always on’

products and

services

Implementation of new enterprise

GRC platform in progress

Board & Management

Oversight

Policies & Procedures

Training

Monitoring & Testing

Consumer Complaint Response

Risk Assessment

Reporting

▪ Culture and conduct risk are

significant issues in the financial

services industry

▪ BB&T’s long standing culture

demands high ethical standards

and is key to BB&T’s success

▪ Culture and Conduct Risk Committee

serves as a consolidation point for

existing efforts aimed at reputation

risk, sales practices risk, culture,

ethics, and conduct

Maintaining Strong Culture and Ethical Conduct is

Paramount to BB&T’s Success and Lowers Overall Risk Profile

16

Culture > Informs > Leadership > Drives > Engagement > Produces > Results

17

Maintaining Disciplined Approach to Credit Risk

Management While Executing on Opportunities

18

BB&T’s Consistent, Disciplined Approach to Credit Risk

Management...

Po

rtfolio

Ma

na

ge

me

nt E

lem

en

ts

Alignment of

Vision / Mission / Values

with consistent risk

appetite

Conservative,

transaction

based

underwriting

Client selection

and long-

standing

relationships

Prudent risk

appetite and

risk selection

Disciplined

account

servicing and

portfolio

management

0%

2%

4%

6%

8%

10%

12%

14%

Net Charge-Off (NCO) %

19

...Drives Consistent Loan Portfolio Outperformance; Especially Critical During Latter Stages of an Economic

Cycle

– Similarity in performance / increasing ‘herd’ mentality

– Fixation with loan and revenue growth

– Loosening underwriting standards

– When costly credit mistakes tend to be made

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

BB&T Range of Peer results

Latter Stage Cycle Credit Dynamics

Tightening of peer

performance

occurred at ‘peak’

of last cycle

All-time

tightest

range for

peers

Tightening of peer

performance

occurred at ‘peak’

of last cycleNo peer

above

50bps

post Q3

2015

Source: S&P Global, regulatory reports

Peers include CFG, CMA FITB, WFC, HBAN, KEY, MTB, PNC, RF, STI, USB and ZION

Risk Adjusted Loan Yield % (Yield – NCO)

Peer Average

20

Target Portfolio Mix Guides Diversified, Profitable Growth

4% 3%

11%15% 18%

23%

37%40%8%

12%11%

34%

27% 25%21%

4% 3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

20

07

Q1

20

18

Q3

Ta

rge

t

Government Consumer Other

C&I + OORE CRE IPP

Consumer RE CRE ADC

BB&T Loan Mix Comparison

Consumer Other

Indirect Retail,

Wealth, Bankcard

Commercial

Real Estate

IPP and ADC

Consumer Real

Estate

Mortgage, HELOC

Government

Loan

Category

Growth to Achieve

Target MixRationale

Through-the-Cycle

Earnings and

Returns

Variability

Resiliency

Diversification

MetricImpact of Achieving Target Mix

C&I + OORE

Corporate Banking,

Community Banking,

Floorplan, Leasing,

Premium Finance

Source: S&P Global, regulatory reports

21

Comprehensive Limits Framework…

Retail Business

Unit Limits

▪ Concentration Limits – Enforce diversification, control concentration risk; guides progress towards target mix

▪ Internal Lending Limits - Enforce granularity, control idiosyncratic risk

CRE Property

Type LimitsC&I Sector Limits Super Sector

Limits

Loan Category

Limits

Single Name Limits Single Project Limits

22

Community

Bank 21%

Corporate

Banking 11%

Gov't Finance

3%

Equip. Finance

2%

Prem. Finance

2%

Dealer Floor

Plan 1%

MWL 1%

Comm. Equip.

Capital 1%Commercial

Bankcard 1%

CRE IPP 10%CRE C&D 3%

Grandbridge

1%

Resi.

Mortgage

21%

Direct Retail

8%

Dealer

Finance - Auto

4%

DF - Rec

Lending 1%

RAC 4%

Sheffield Retail

3%

Bankcard -

Retail 2%

North Carolina 18%

Florida

11%

Virginia 9%

Pennsylvania 8%

Georgia 7%Texas 7%

Maryland 6%

South Carolina 5%

California 3%

Kentucky 2%

Tennessee 2%

Other 22%

Note: Based on EOP balances 9/30/2018 excluding purchase credit impaired loans; C&I includes Leasing

Source: Company reports, regulatory reports

Portfolio balances in each state in the Other category are under 2% of the total

Total Loan Portfolio by Geography

…Enforces Diversification of Total Loan Portfolio by

Business Unit Loan Type and Geography

Total Loan Portfolio by Loan Type

Total: $146B

C&I $63B

CRE $22B

Mortgage $31B

Retail $31B

23

Mining and

O&G

Extraction 2%Utilities 2%

Construction

2%

Manufacturing

10%

Wholesale

4%

Retail 7%

Transportation

and WH 3%

Finance 8%

Real estate

3%Scientific

services 2%

Administrative

and waste

mgmt 2%Education

services 3%

Healthcare 8%

Hospitality

and food

svcs 1%

Other

services

(except

public

admin) 2%

Public admin 7%

Owner

occupied

23%

Not classified

8%

Agriculture

1%

C&I Portfolios Are Well-Diversified and

Client-Focused – $62.5B*

▪ Centered around Community Bank

relationships

– Average funded C&I loan < $1MM

– SNCs = 9.8% of total loan outstandings

▪ Diversification and granularity:

– Top 20 relationship commitments are only 35% of TCE

– Covariant risks further monitored and managed at super-sector levels

▪ Disciplined client selection avoids:

– Leveraged loan transactions only 0.7% of total loans

– Second-lien structures

– Term loan B tranches

– Loans to fund dividend recaps and share repurchases

– Bridge financing

– Fully underwritten syndication risk

*Includes Bankcard Commercial, Equipment Finance, Premium Finance, Sheffield Commercial, and Commercial Equipment Capital

Chart excludes Bankcard Commercial not classified includes Premium Finance and Lease Financing

Note: Based on EOP balances 09/30/2018 excluding purchase credit impaired loans

C&I Sectors

24

Multifamily

18%

Industrial

13%

Retail

24%

Office

20%

Hotel

14%

Single

Family

11%

▪ Direct lending to relationship-oriented sponsors

▪ Very granular portfolio:

– Average CRE loan < $2 million

– Largest single CRE loan < $70MM

– Top 20 commitments = 6.2% of TCE

– Top 10 MSAs combined < 40% of total CRE

loans

▪ CRE-ADC and IPP lending limits 50-80% of C&I limits, respectively

▪ Single project limits further reduced based on MSA and loan type

▪ Modest exposure to regional malls (<$100MM), seniors and student

▪ Disciplined loan sizing utilizes

conservative stressed interest rates and property-specific coverage ratios

▪ Avoid extended interest-only and non-recourse terms

CRE Portfolio is Intentionally Balanced

and Granular – $21.5B*

*Includes Grandbridge Real Estate Capital

Note: Based on EOP balances 09/30/2018 excluding purchase credit impaired loans

Well-Balanced by Sector

25

Full Spectrum National Auto Platform – $12.0B*

▪ Regional Acceptance Corporation (“RAC”) has provided consistent returns to

BB&T through the credit cycle since its acquisition in 1997

▪ Intensive underwriting process including client interview, employment/income verification and rigorous collateral assessment

Note: Based on EOP balances 09/30/2018 excluding purchase credit impaired loans

7.43%8.12% 8.31%

5.18%

4.06%4.59%

5.56%

6.89% 6.68%7.33% 7.40%

5.82%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

RAC - Subprime Dealer Finance

Portfolio View 9/30/2018 9/30/2017 9/30/2018 9/30/2017

Outstanding $'s (MM) $5.0B $4.0B $6.2B $7.8B

NCO (YTD) 5.82% 7.51% 0.19% 0.17%

Loan Margin 12.57% 14.67% 1.30% 1.24%

Orig

ina

tio

n M

etr

ics

Average Term 69 69 68 67

Max Term 72 72 75 75

Average DTI 35.9% 35.7% 31.9% 31.2%

Average FICO 564 560 743 751

Average LTV - Line3 104.5% 105.2% 97.4% 94.7%

▪ Auto Sector leadership is risk aware, data driven, and operational control minded

– Deliver best in class auto

finance program

– Avoid score only adverse

selection

Primary Auto Delivery Channels

RAC Loss History

26

▪ Average FICO 754

▪ Very diversified portfolio:

– No state greater than 19%

– Correspondent Lending provides geographic diversification

▪ Jumbo exposures support Wealth strategy

▪ Pre-crisis vintages less than 15% of the portfolio

Residential Mortgage and In-Bank

Direct Retail Lending – $42.4B*

CP

2%

Conforming

32%

DRL Loans

9%

Jumbo

55%

Affordable

& Others

2%

HELOC-1st

33%

HELOC-

2nd 39%

Other Real

Estate 6%

Securities

7%

Unsecured

6%

Other

Non-RE 9%

$11.6 Billion

▪ Average FICO 757

▪ Branch originated portfolio

▪ Primarily real estate secured (HELOC) with

originations under 85% LTV

▪ Wealth lending represents high growth segment

▪ Not participating in 3rd party unsecured lending

Based on EOP balances 09/30/2018, excluding loans held for sale and purchase credit impaired

Mortgage Direct Retail Lending

$30.8 Billion

27

▪ Average retail FICO 751

▪ 69% of Retail Bankcard

commitments have 4 or more Bank

products

▪ No active origination program for

subprime credit cards

▪ No national delivery of credit cards

to non-BB&T clients (no mass

solicitations)

Relationship Based Prime Bankcard Portfolio

Note: Based on EOP balances 9/30/2018 excluding purchase credit impaired loans

Retail

70%

Commercial

24%

Overdraft

6%

Bankcard by Segment

$3.1 Billion

BusinessOutstanding (Billions)

Description

Sheffield Financial $4.9B

▪ Manufacturer based small ticket

finance─ Powersports─ Outdoor power equipment─ Trailers

BB&T Equipment Finance $3.0B▪ Full range commercial equipment

finance

AFCO/CAFO $2.7B▪ Commercial insurance premium

finance

BB&T Recreational Lending $1.9B▪ Marine and Recreational Vehicle

finance

Grandbridge Real Estate Capital

$1.8B▪ National commercial real estate

finance and servicing

Commercial Equipment Capital

$1.1B▪ Small ticket commercial equipment

finance

28

Specialized Lending: High Margin, Prime Based,

Cycle Tested National Business Models Provide

Diversified Growth Opportunities – $15.4B

Note: Based on EOP balances 9/30/2018 excluding purchase credit impaired loans; Sheffield Commercial, Equipment Finance, Premium Finance, and Commercial Equipment Capital are

included in the total C&I balance, Grandbridge is included in total CRE balance

29

BB&T is Adapting Its Proven Approach to Credit Risk

Management to Execute on Current and Future

Opportunities

Maintaining disciplined, consistent approach to credit risk management

Creating seamless end-to-end credit

processes through innovation and

re-conceptualization

Investment bias for businesses with proven through-the-cycle results

Careful evaluation of alternative credit

origination and delivery areas

30

Risk Management:

Now More Critical Than Ever

31

Key Takeaways

1Consistent best in

class risk adjusted returns

New risks are

resulting fromindustry

innovations23

Adapting risk and

control programs

while taking

advantage of current and future

opportunities 4BB&T will maintain

its conservativethrough-the-

cycle approachto credit risk, with

a focus on

diversification

and granularity