Greetings ladies and gentlemen, and welcome to the BB&T Corporation First Quarter Earnings Conference. Currently, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this event is being recorded. And it is now my pleasure to introduce your host, Alan Greer of Investor Relations, for BB&T Corporation. Please go ahead, sir.

Thank you, Ebony, and good morning everyone. Thanks to all of our listeners for joining us today. We have with us today Kelly King, our Chairman and Chief Executive Officer and Daryl Bible, our Chief Financial Officer, who will review the results for the first quarter of 2016. We also have with us other members of executive management who are with us to participate in the Q&A session, Chris Henson, our Chief Operating Officer; Clarke Starnes, Chief Risk Officer; and Ricky Brown, Community Banking President. We will be referencing a slide presentation during our comments. A copy of the presentation as well as our earnings release and supplemental financial information are available on the BB&T website. Before we begin, let me remind you that BBT does not provide public earnings predictions or forecasts. However, there may be statements made during the course of this call that express management's intentions, beliefs or expectations. BB&T's actual results may differ materially from those contemplated by these forward-looking statements. Please refer to the cautionary statements regarding forward-looking information in our presentation and our SEC filings. Please also note that our presentation includes certain non-GAAP disclosures. Please refer to page two in the appendix of our presentation for the appropriate reconciliations to GAAP. And now, I'll turn it over to Kelly. Kelly S. King - Chairman, President & Chief Executive Officer: Thank you, Alan. Good morning everybody and thank you very much for taking time to join our call. Overall, we had a what I'd call a solid quarter with nice increase in net income and record net interest income. Net income was $527 million, up 8% versus first quarter and 20% annualized versus the fourth, so solid performance. Diluted EPS was $0.67 which was flat to the first quarter 2015 but was up an…

Thank you, Kelly. At this time, we'll begin our Q&A session. Ebony, if you could please come back on the line and explain how our listeners can participate and ask questions.

Absolutely. Thank you. And we will take our first question from Matt O'Connor. Please go ahead.

Matt? Matt, we can't hear you. You're on mute.

One moment. And Matt, your line is open. Please go ahead.

Can you, guys hear me?

We can hear you. Kelly S. King - Chairman, President & Chief Executive Officer: Yeah, Matt.

All right. Great. Okay. Just starting on the cost saves, could you just remind us how much is still to come from all the deals that have closed, and then will these fall to the bottom line or are there some offsets as we think about, call it core BB&T or legacy BB&T? Daryl N. Bible - Chief Financial Officer & Senior Executive Vice President: So Matt, if you go back a year-plus ago, the Citi branches and Bank of Kentucky, all those have basically come in, both the cost saves and revenues and all that. From Susquehanna's perspectives, we are probably 85% to 90% through the cost saves from that. So the rest of the cost saves will probably bleed in into our run rate over the next couple quarters or out of the community bank area. But that's where we stand there. As far as the two deals that we just closed April 1, there's really no cost saves in those transactions. We expect National Penn had systems conversion third quarter, so you might see a little bit third quarter but more of that in fourth quarter and first quarter. And Swett & Crawford, maybe a little bit on revenue synergies this year but their systems conversion is the first part of 2017, and their cost saves and efficiencies will come in in probably in the first half of 2017.

Okay. That's helpful. And then just on the revenue side, I mean bigger picture, like how should we think about what areas you're trying to cross sell into, just the broader Mid-Atlantic franchise? Obviously there is the scale benefit, but what other product sets do you think can get ramped up in that franchise, and when do we start seeing some of those benefits in a more meaningful manner? Kelly S. King - Chairman, President & Chief Executive Officer: So, Matt, we think the number, it's kind of pervasive, but the standout ones are continuing to expand the benefits from our corporate banking relationships. Recall that over the last several years, we've been starting those relationships on the credit side, and then the follow on residual benefits in terms of deposits and other fee services come. So that will be a big one. Our wealth management continues to integrate very, very well in terms of loan balances and other fee balances that are coming in. Our retail banking, retail lending is coming on very, very strong, and then the huge benefit from the insurance area as we integrate Swett & Crawford and continue to integrate Crump, and continue to use the Crump cross-sell abilities throughout the entire community bank in terms of selling life insurance. All of those are some of the ones that are really big standouts.

Okay. Thank you very much.

And we'll now take our next question from Michael Rose with Raymond James. Michael Rose - Raymond James & Associates, Inc.: Hey. Thanks for taking my questions. Kelly, I just wanted to touch on the efficiency ratio. You may not hit your target this year, but that's okay. You obviously announced another insurance acquisition. Can you just give us your thoughts in light of the environment in terms of what we could expect for the insurance – or for the efficiency ratio, both maybe in the nearer term and then longer term, if there's any changes? Thanks. Kelly S. King - Chairman, President & Chief Executive Officer: Yeah. I think we will end up this year with improvement. It may be in the 57%-ish kind of range. Feel pretty confident about that. We still think over the next two years or three years, we'll get to the mid-50s%. And I know some people talk about the low 50s%. That is not going to happen unless you get a substantial ramp-up in the yield curve. Remember this is a numerator/denominator problem. So we're assuming that the economy will grow at 2% to 2.5%. There'll be a slow ramp-up in the yield curve, but not dramatic. Therefore, it makes it harder to grind out efficiency improvements. Still though, with opportunities that we have to generate additional revenues out of our investments we've made, and the ability to generate additional efficiencies from the investments we've made, we think we'll be able to hit those targets. Michael Rose - Raymond James & Associates, Inc.: Okay. That's helpful. And then just as a follow-up. How should we think about the dividend payout ratio going forward? You guys are trending a little higher than you have historically. You mentioned in the prepared remarks about CCAR being…

And we'll move next to Betsy Graseck with Morgan Stanley. Elizabeth Lynn Graseck - Morgan Stanley & Co. LLC: Hi. Good morning. Kelly S. King - Chairman, President & Chief Executive Officer: Good morning.

Hey, Betsy. Elizabeth Lynn Graseck - Morgan Stanley & Co. LLC: So a question, just one follow-up to the question on energy, is you did indicate – and I appreciate the color around the percentage of the portfolio that's criticized and classified. That's against a denominator that is both funded and unfunded? Or is that just a denominator that is funded?

Betsy, that's based on funded balances. Elizabeth Lynn Graseck - Morgan Stanley & Co. LLC: Right. Okay. Got it. That's great. And then separately as you're thinking about how the industry progresses from here, can you give us a sense as to how you work with your clients? And how you're making the decisions to either continue to reinvest with them or to potentially help them shrink or sell or exit or reduce your exposure with them? Or is it too late for that, and what you have is what you have? Kelly S. King - Chairman, President & Chief Executive Officer: Betsy, are you talking about primarily the energy area? Elizabeth Lynn Graseck - Morgan Stanley & Co. LLC: Correct. Kelly S. King - Chairman, President & Chief Executive Officer: 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. And so we will stick with it. And we will stick with our really good clients. And we'll continue to be supportive to the industry. Elizabeth Lynn Graseck - Morgan Stanley & Co. LLC: And so – and do…

And we'll move next to Lana Chan with BMO Capital Markets.

Hi. Good morning. Two follow-up questions. One, on the CCAR ask for 2016 and prioritizing buybacks and dividends, is that just for the second half of this year or does that go extend into 2017? Kelly S. King - Chairman, President & Chief Executive Officer: Yeah. That would be for entire CCAR period, which would extend into 2017.

Okay. Thank you. And Daryl, if you could help me run through how we get from the first quarter expense level to the $1.75 billion in the second quarter. It just seems a little bit higher than what I would have modeled in with the adds-on. I know you gave the Swett inclusion. What else is going up in terms of the step up and what's coming from Nat Penn? Daryl N. Bible - Chief Financial Officer & Senior Executive Vice President: Yeah. I mean, if you look at National Penn and Swett & Crawford, those two add in approximately $100 million to $110 million in expenses into the second quarter off their base. And if you add in maybe an additional $30 million more in expense saves, then that leaves about $60 million left approximately. And I would say second quarter, usually we have higher revenues, so you pay out higher commissions. That's a percentage there. And then probably then the next biggest increase that we have across the board is probably just in technology and IT. We continue to invest in those areas and those areas continue to increase some. But I feel that we are very focused on our expenses. I think we have a chance of maybe exceeding what we're saying, beating it. But right now we're just putting out conservative numbers from an expense base. But as Kelly said, we will focus on improving efficiency throughout the year. With all these acquisitions closing first of this quarter, it's going to be really messy trying to put it all together.

Okay. And then that starts really stepping down starting in the fourth quarter? Daryl N. Bible - Chief Financial Officer & Senior Executive Vice President: Yes. Correct.

Thank you, Daryl.

We'll move next to Gerard Cassidy with RBC.

Good morning, Kelly. Good morning, Daryl. Daryl N. Bible - Chief Financial Officer & Senior Executive Vice President: Hey, Gerard. Kelly S. King - Chairman, President & Chief Executive Officer: Morning.

This question maybe is more for Clarke. Clearly, BB&T has done a very good job in improving its credit quality post the financial crisis. And BB&T, along with many of the other banks, all have built up the reserves this quarter for the energy, SNC exam that took place very recently. And so the question is, what did the regulators do that was so different that none of the banks had anticipated back in the fourth quarter? I know energy prices fell to below $30 in February, but were they doing stuff that just was unusual and we have not seen before which forced everybody to build up these reserves? Clarke R. Starnes III - Chief Risk Officer & Senior Executive Vice President: I think, Gerard, what I think the fundamental – my opinion – the fundamental change in the guidance. Historically as you know, reserve based lending, asset classifications, accrual status, impairment view was based more from a senior secured collateral asset base coverage standpoint against that primary bank debt. What's happened with this boom in the shale production with this cycle is you have a lot more secondary bond financing behind the bank grew. And the new regulatory guidance is very explicit around you have to make sure that you have sufficient cash flow coverage and asset coverage for the total debt including the secondary debt. And obviously, with the plunge in prices that nobody could have predicted, it puts enormous pressure on those ratios. So that's really the big sea change. We still believe, given all that, with enough time and with recovery in the prices that we have a good shot at getting, having better recoveries. But we have to prudently reserve in the meantime.

Thank you. And then speaking of Shared National Credit exams, obviously we have the national one going on right now for all loan categories. Clarke, are you hearing of any sea changes there? Excluding the energy since you guys all just did that, but is there any talk of looking at different categories of loans quite a bit differently? Clarke R. Starnes III - Chief Risk Officer & Senior Executive Vice President: We are not hearing anything yet, any sort of chatter like that like we had heard with the first exam around energy. So at this point, we are not.

Okay. And then, Kelly, in looking at your slide 11 in the presentation where you focus on the fee income ratio, it's dropped down quite a bit. And one of the hallmarks of your company has always been a 45% or so fee revenue to total revenue. Is this a new change that we're going to be seeing it now closer to 40% or is this a temporary change? Kelly S. King - Chairman, President & Chief Executive Officer: No, Gerard, I think this is more temporary. I think that we've had a range of 41%, 42%, to 40% has been kind of high, frankly. But we think in terms of 42%, 43% as kind of normal. We don't want to get too far out of balance one way or the other. So and it depends on, again, the interest rate environment. So if your interest rates go down, then your non-interest income goes up as a percentage. But on a normalized basis I'm fairly comfortable with our non-interest income, meaning we're in the 40%, 42%, 43% kind of level. Right now so you got – recently you had the net interest income being down, which would drive the ratio up. On the other hand, insurance is not at the level that it would be relatively, because of the pace of business. And so that would affect it. And the temporary impact has been the removal of American Coastal last year, which of course will come right back now when we added Swett & Crawford. So it's not a change, Gerard, from a long-term point of view at all. It'll be right back where we wanted to be, 42%, 43%. And then probably, hopefully, hang at that level, because hopefully the net interest income comes back up.

Great. Appreciate the color. Thank you.

And we'll move next to Paul Miller with FBR & Company. Paul J. Miller - FBR Capital Markets & Co.: Hey, thank you very much. Hey, can you – Kelly, can you talk a little bit more – the comments, you mentioned that you're going to focus less on M&A going forward. Does that mean both in the insurance side and the banking side? And you're going to focus more on capital management through buybacks? Kelly S. King - Chairman, President & Chief Executive Officer: Yeah, Paul. That's exactly right. 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. I mean this is a shareholder-driven strategy, gearing our profitability up and reaping some of the benefits of the previous investments we've made. And that applies to insurance and banking and basically everything else. Paul J. Miller - FBR Capital Markets & Co.: So should we be modeling a higher buyback level? Or should we wait to – the Fed comes out with their tests where – what's got approved? Kelly S. King - Chairman, President & Chief Executive Officer: Well, I mean all of us have to wait to see what the Fed approves. But I mean as a practical manner, if I were you modeling, I'd be modeling for higher buybacks. Paul J. Miller - FBR Capital Markets & Co.: Thank you very much, guys.

And we'll move next to Stephen Scouten with Sandler O'Neill. Please go ahead. Stephen Kendall Scouten - Sandler O'Neill & Partners LP: Hey, guys. Thanks. I had a question for you on the forward loan growth expectations. I see you put 1% to 3% kind of guidance for 2Q. Is that an expectation of slower kind of resi runoff and sales finance runoff? Or is that just higher overall originations? What's going to drive that delta quarter over quarter? Kelly S. King - Chairman, President & Chief Executive Officer: Yeah, it's lower. The resi runoff is cleaning out if you will, and then you get the seasonal activity buildup in the second. Stephen Kendall Scouten - Sandler O'Neill & Partners LP: Okay, makes sense. And is that kind of what you expect for the full year as well, in that 1% to 3% range? Daryl N. Bible - Chief Financial Officer & Senior Executive Vice President: So it's going to be – from an organic basis I would say we'd have a little bit more loan growth from second to third, how we sit now. I mean visibility out a couple quarters is not perfect. But if we're 1% to 3%, you might add another 1% or 2% to that for second to third. But we'll see how the economy plays out. Stephen Kendall Scouten - Sandler O'Neill & Partners LP: Okay. Great. And then one follow-up just on the kind of uses of capital, buyback versus M&A. I mean is that something that you would consider to be a hard and fast kind of decision at this point through the next CCAR request? Or will you still have flexibility like you had kind of this year to either do repurchases or M&A, depending upon opportunities? Or is your request even submitted as simply buybacks, and we won't see them change it back? Kelly S. King - Chairman, President & Chief Executive Officer: No, no. Our request has the same flexibility in it that we've always had. But the guidance I'm giving you with regard to our focus on profitability management versus M&A is very hard. Stephen Kendall Scouten - Sandler O'Neill & Partners LP: Got you. Thanks, guys. I appreciate it.

And we'll move next to John Pancari with Evercore ISI.

Good morning, guys.

Morning, John.

On the buyback topic could you help us in how to size it up? And if it is something that's much more of a – that we could have much greater confidence in now, Kelly, how should we think about the magnitude of it? I mean you're at a 40% payout right now on the dividend. You indicated that could go up a little bit. Where could we go on the buyback? And could we be approaching somewhere in the 80s% or 90s% in terms of a combined payout when you factor in the buyback activity? Thanks. Daryl N. Bible - Chief Financial Officer & Senior Executive Vice President: Yeah, John, this is Daryl. What I would say from a CCAR perspective, obviously nothing is approved yet. But last several years we've focused and we've traditionally been one of the higher ones on the payout ratio on dividend. We hope that that would continue with CCAR 2016. Now as far as the total payout ratio goes, I would say we like where our capital ratios are today. So as Kelly said, we're going to probably use 25% plus up in capital for organic growth. So the remaining percentage would probably be in buyback.

Okay. All right. And then separately, Kelly, I just want to get a little bit more color around the change in tone on that front in terms of looking at more of the buyback opportunity with capital deployment versus M&A. Was there anything else that prompted that change in terms of either a regulatory environment and/or anything in terms of your – the trend in your efficiency that you're trying to get on top of something here? Thanks. Kelly S. King - Chairman, President & Chief Executive Officer: John, it's really a matter of looking at the number of deals. Ideally to be honest we wouldn't have done as many deals in as short a period of time as we did. It's just they were available. And you can't – I wish you could, but you can't ideally lay out your M&A plans on a linear basis and project them whenever you want to have them. They come when they come. And you take advantage of them when they're there. So we took a bit more in the last year and a half at one time than I personally would like to have. And so – and you combine that with all of the other activities we have going on, like these huge investments in the back room in terms of systems and processes and so forth. And it's just my very strong intuitive judgment, our collective team's judgment that it's just time to focus on taking advantage of what we have. See, sometimes people think about M&A and all this as a kind of linear upward sloping line. It's not. It's more like a stair step. You ramp up in terms of acquisitions, then you take a period of time and you rationalize them and then you ramp up again. So we're in that flatter part of the stair step where we're going to be focusing on rationalizing what we've already invested in. We think that's shareholder-friendly because if you just continually roll up all the time, you're never getting a real payback till you stop doing M&A for a little while and that's not fair to the shareholders. So this is more about taking advantage of what we did in the last year and a half. When we get that done, we'll be interested in M&A again. But for right now, we're focused on getting the advantages of what we already done.

Okay. Thank you. Then one last thing if I could, on the margin. I know you indicated you got one rate hike modeled in the back part of the year. If that doesn't materialize, is it fair to assume that the margin sees some erosion here if there's no Fed hike this year? Daryl N. Bible - Chief Financial Officer & Senior Executive Vice President: What I would say is right now we would be forecasting margin to probably be in the low 340s, probably for throughout 2016. Our rate hike that we have in November helps us but it's not a huge impact in the fourth quarter. So, and we're pretty much not assuming on any real rate rise help that (54:31). So we feel really good about the mix, the mixes going in our favor, loan mix, funding mix, and our spreads are coming in nicely. So our core margin has stabilized. So I feel GAAP margin in the 340s, low 340s is about right.

Got it. Thanks, Daryl.

And we'll move next to Kevin Barker with Piper Jaffray. Kevin J. Barker - Piper Jaffray & Co. (Broker): Thank you for taking my questions. Regarding net interest income and your expectations going forward, you're modeling a rate hike. Bow are you looking at the long end of the yield curve at the same time? Daryl N. Bible - Chief Financial Officer & Senior Executive Vice President: Good question, Kevin. So the rate hike is in November so it really doesn't have a huge impact on net interest income. You look at the yield curve, we would keep our yield curve relatively constant where it is today. We don't really think it's going to steepen up much in our forecast that we have. If you look at our balance sheet, our balance sheet is pretty balanced. About half of our assets are floating rate, half are fixed. So when the curve actually came down some in the early part of 2016, the fixed portion got hurt a little bit from a net interest income perspective because those get priced off the yield curve. But, and we did a great job with our funding costs, keeping that very stable. All that's very sticky. We're having huge growth in funding and wider margins in our deposit franchise right now. Kevin J. Barker - Piper Jaffray & Co. (Broker): Okay. And then you mentioned that Regional Acceptance had a net charge-off rate of 7.9% and the prime bulk is roughly 19 basis points, which is very good. How does that compare to the year-over-year numbers and then quarter-over-quarter? Clarke R. Starnes III - Chief Risk Officer & Senior Executive Vice President: Yeah, Kevin, this is Clarke. Regional Acceptance's losses are up year-over-year, so they're probably up 50 to 75 basis points or so.…

And we'll move next to Ken Usdin with Jefferies.

Hi. This is Amanda on for Ken. Daryl, given your strong first quarter NII results and the NIM dynamics you discussed, the guide range that you guys gave at the end of last year for plus I think 12% to 14% year-over-year for NII growth. Is the high side of the range in play now? Daryl N. Bible - Chief Financial Officer & Senior Executive Vice President: On a year-over-year basis, Amanda, I think I grew very comfortable that we'll have 12%-plus growth on NII on a year-over-year basis from 2016 to 2015.

Okay. Thanks. And then are you expected to have some NPBC PAA in the second half? Daryl N. Bible - Chief Financial Officer & Senior Executive Vice President: Could you translate that for me a little bit, Amanda?

I guess do you expect to have some purchase accounting accretion from NPBC? Daryl N. Bible - Chief Financial Officer & Senior Executive Vice President: Okay, yeah. So purchase accounting, what I could tell you is, is that the Susquehanna purchase accounting is starting to come off a little bit, but we have National Penn that we have a first time for go on for this quarter. So purchase accounting is going to be pretty robust for most of this year and will trend down over time. But 2016, I feel very comfortable that GAAP margin will be in the low 340s, second, third, fourth quarters and core margin we feel has stabilized, starting to improve some. So that could actually get into the low 320s.

All right. Thank you. Daryl N. Bible - Chief Financial Officer & Senior Executive Vice President: Yeah.

And that concludes today's question-and-answer session. Mr. Greer, at this time, I will turn the conference back over to you for any additional or closing remarks.

Okay. Thank you, Ebony, and thanks to all of our listeners for joining. This concludes our call for the day. If you have further questions, please don't hesitate to call Investor Relations and we hope that you have a good day.

And this concludes today's call. Thank you for your participation. You may now disconnect.