BB&T Corporation (NYSE:BBT) Q4 2017 Earnings Conference Call Transcript

Jan 18, 2018 • 08:00 am ET

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BB&T Corporation (NYSE:BBT) Q4 2017 Earnings Conference Call Transcript

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Q & A
Operator
Operator

Thank you. (Operator Instructions) It appears our first question comes from (technical difficulty).

Analyst
Unidentified Participant

Hi good morning.

Executive
Daryl N. Bible

Hey John, good morning.

Analyst
Unidentified Participant

I was wondering on the expense outlook, for keeping expenses flat. It sounds positive. I was wondering, off of what base should we look for that to be flat? I guess that would be kind of the adjusted basis about 6.65, is that the number that we should look for that to be off of? And then that excludes kind of merger and intangibles, so just kind of what's outside of that number that we should think about?

Executive
Daryl N. Bible

So, John, if you look at our slide deck, on Page 5 in there, Kelly went through and mentioned that, we basically should have reported and all the adjustments coming through. If you look at the very last column on that page, it's the full year, for 2017, the total non-interest expense is $6.8 billion. If you see that, that's the base that we're talking about, being flat on a year-over-year basis.

Analyst
Unidentified Participant

Okay, great and in terms of kind of spending some of the benefits of tax reform, does keeping expenses flat kind of include that as well?

Executive
Kelly S. King

John, this is Kelly. Yes. It will. So, we have substantial investments that we are making in the business. We had said we would invest a substantial portion of the tax advantage in to that and we are. So what you can see is that we're making those investments that we alluded to and we're holding expenses flat. So obviously, if we were not making those expenses, investments and our expenses would be down.

Executive
Daryl N. Bible

John, what you don't know is we put our 2000 plan together. Kelly challenged all the business units to basically cut across the board and what we did as a management team is reallocate all the inappropriate investments. That's how we kept it flat. But we created a pot of money that we basically put into all these investments.

Analyst
Unidentified Participant

And then just as a follow-up, the outlook for the positive operating leverage also sounds good. What would it take to kind of get to the higher end of that, what would we have to assume to kind of be at the higher end of the revenue growth and operating leverage goal for the year?

Executive
Kelly S. King

I think you've got a couple of things there, John, that might -- that could do that. Insurance revenues could be higher than we projected, if the market responds with better pricing. Now, the market is not recommend -- or not seeing huge increases.

Executive
Daryl N. Bible

We differ a bit. We think the insurance price increases will be higher because of all the catastrophes and we compete on loan growth and that could cause more positive operating leverage. And interest rates could be, we think that it's -- we're forecasting, I guess, as Daryl just want and plan, but we think there would be more like 3. So that's going to be by the end of the year, but