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
Executive
Daryl N. Bible

you can really think more about 2 versus 1 in terms of what we really think is going to happen.

Analyst
Unidentified Participant

Got it. So if we got 2 or 3, we could be at the high end of that 2 to 4 kind of revenue outlook?

Executive
Kelly S. King

That's fine.

Analyst
Unidentified Participant

Okay, thanks guys.

Executive
Kelly S. King

Thank you.

Operator
Operator

Our next question comes from Ken Usdin with Jefferies.

Analyst
Ken Usdin

Thanks, good morning guys. I was just wondering, on the fee side, you mentioned some of the headwinds abating and I'm just kind of wondering where you expect to see the growth and specifically if you can comment on insurance and pricing and what you think that key business can do inside the fee growth this year?

Executive
Christopher L. Henson

Sure. This is Chris. We're seeing really good fee growth as you can see across all the categories. We had insurance, service charges, you saw our private equity business, bank card, check card, so we get really good contribution as retail really comes back. Specifically insurance, I think as Kelly mentioned that, could be a lever for us. Just to kind of give you a background today, pricing is still down 2% and 2.5% kind of range, down from sort of the 4% range. And to drive core growth, you get retention, retention is up year over year.

Our business production is up 3.3% in -- which drove organic growth this year at 1.7%, which we're pretty pleased with. But in terms of outlook, what we would expect next quarter is about a 3.5% pickup and Kelly talked about the economy. Economic expansion is really good for the insurance business, because anything that helps drive more units, more exposure to existing clients and more units is very helpful to do business production, but really it's still too early to estimate the full impact of the catastrophes.

There is still excess capital in the market. Everybody is centering on sort of losses in the $130 billion, $135 billion range, which is the largest cat year we've ever had, but offsetting that is the investment income for the carriers that really offset the losses in 2017 and we're still seeing new alternative capital coming into the market, but still reinsurers are seeing rates up about 4% to 5% and what we think that could mean for us is pricing kind of move in for that negative too that stabilized and in the last half of the year and we get another bite of the apple that renewals at mid-year, which should help. But I think you can see pricing up a percent or two, sort of stabilized in the last half of the year and that would be very, very helpful for the business for sure.

Executive
Daryl N. Bible

I mean besides insurance, we expect service charges. We've had a strong year in '17 that continue in '18. Our mortgage area continues to grow as we continued our, keeping our penetration in that market, that should be up and then investment banking and brokerage. So --

Executive
Christopher L. Henson

Yeah.