2005 ANNUAL REVIEW There’s opportunity here
2 0 0 5 A N N U A L R E V I E WT h e r e ’s o p p o r t u n i t y h e r e
32308 3/6/06 12:10 PM Page 2
20BB&T
32308 3/3/06 8:52 AM Page 3
Consolidated Financial Highlights 2
Corporate Profile 4
To Our Shareholders 6
Corporate Board of Directors 22
Executive Management 23
Market Coverage 24
Shareholder Information 26
Consolidated Balance Sheets 28
Consolidated Statements of Income 29
Selected Financial Data 30
Selected Ratios 31
General Information 32
2006 ANNUAL MEETING
BB&T Corporation’s Annual
Meeting of Shareholders will
be held at the Embassy Suites
Winston-Salem at 460 North
Cherry Street, Winston-Salem,
North Carolina, on Tuesday,
April 25, 2006 at 11:00 a.m.
“About the Cover“There’s Opportunity Here” by Bryan Larsen, “special commission for BB&T“© 2006 Bryan Larsen“Quent Cordair Fine Art“1-866-267-3247 – www.cordair.com
TA B L E O F C O N T E N T S
ANNUAL REVIEW0 05
2
Consolidated Financial Highlights
BB&T Corporation and Subsidiaries(Dollars in millions, except per share data)
2005 2004 % Change
Annual ResultsNet income $ 1,654 $ 1,558 6.1 %Net income per common share:
Basic 3.02 2.82 7.1 Diluted 3.00 2.80 7.1
Cash dividends paid per common share 1.46 1.34 9.0
Annual Operating Results (1)Operating earnings $ 1,674 $ 1,562 7.2 %Operating earnings per common share:
Basic 3.06 2.83 8.1 Diluted 3.04 2.81 8.2
Annual Cash Basis Operating Results (1,2)Cash basis operating earnings $ 1,763 $ 1,646 7.1 %Cash basis operating earnings per common share:
Basic 3.22 2.98 8.1 Diluted 3.20 2.96 8.1
Year-End BalancesAssets $ 109,170 $ 100,509 8.6 %Securities, at carrying value 20,489 19,173 6.9Loans and leases 75,023 68,163 10.1Deposits 74,282 67,699 9.7Shareholders’ equity 11,129 10,874 2.3 Book value per common share 20.49 19.76 3.7
Average BalancesAssets $ 104,612 $ 96,276 8.7 %Securities, at amortized cost 20,467 18,218 12.3 Loans and leases 71,517 66,107 8.2 Deposits 70,346 64,816 8.5 Shareholders’ equity 11,065 10,597 4.4
Performance Ratios Based on Net IncomeReturn on average assets 1.58 % 1.62 %Return on average equity 14.95 14.71
3
(1) Information presented on an operating basis excludes the effects of $(6.8 million) and $3.5 million of net after-tax costs associated with the completion of mergers and acquisitions in 2005 and 2004, respectively. In addition, operating results in 2005 exclude the effects of a one-time charge related to the accounting for leases, which totaled $26.6 million, net of tax.
(2) Information presented on a cash basis excludes the effects of intangible assets, purchase accounting adjustments and the related amortization expenses, which totaled $89.4 million and $84.0 million, net of tax, for the years ended December 31, 2005 and 2004, respectively. In addition, cash basis results exclude merger-related and nonrecurring items as discussed in Note 1.
2005 2004
Performance Ratios Based on Operating Earnings (1)Return on average assets 1.60 % 1.62 %Return on average equity 15.12 14.74 Fee income ratio 39.1 37.8 Efficiency ratio 52.5 51.9
Performance Ratios Based on Cash Basis Operating Earnings (1,2)Return on average tangible assets 1.77 % 1.79 %Return on average tangible equity 27.82 27.17 Efficiency ratio 50.4 49.7
Capital RatiosTier 1 risk-based capital ratio 9.3 % 9.2 % Total risk-based capital ratio 14.4 14.5 Tier 1 leverage capital ratio 7.2 7.1 Equity as a percentage of total assets 10.2 10.8
Miscellaneous InformationCommon shares outstanding (in thousands) 543,102 550,406 Basic weighted average shares outstanding (in thousands) 546,916 551,661 Diluted weighted average shares outstanding (in thousands) 551,380 556,041 Shareholders 257,000 255,000 Full-time equivalent employees 27,745 26,148 Banking offices 1,404 1,413 ATMs 1,951 1,930
05BB&T ANNUAL REVIEW
1.00
3.00
2.00
’04’03’02’01 ’05
Diluted Earnings Per Share$ | based on operating earnings
3.04
.00
1.50
1.25
.25
’04’03’02’01 ’05
Dividends Paid Per Share$
1.46
1.00
.75
.50
’00’99’98’97’96’95
0
60
50
10
’04’03’02’01 ’05
Dividend Payout Ratio%
48.3%
40
30
20
’00’99’98’97’96’95
0.00
3.00
2.00
1.00
’04’03’02’01 ’05
Cash Basis Diluted Earnings Per Share$ | based on cash basis operating earnings
3.20
18.00
28.00
23.00
’04’03’02’01 ’05
Cash Basis Return on Average Common Equity% | based on cash basis operating earnings
27.82
0.0
45.0
15.0
’04’03’02’01 ’05
Cash Basis E!ciency Ratio% | based on cash basis operating earnings
50.4
30.0
0.0
’04’03’02’01 ’05
Fee Income Ratio% | based on operating earnings
39.1
30.0
15.0
0
1,800
1,600
200
’04’03’02’01 ’05
Operating EarningsMillion $
1,674
1,200
800
400
’00’99’98’97’96’95
1,400
1,000
600
0
120
100
’04’03’02’01 ’05
Total AssetsBillion $
109
60
20
’00’99’98’97’96’95
80
40
$100
’04’03’02’01 ’05
BB&T$426
$400
$300
$200
’00’99’98’97’96’95
Bank of America
S&P 500 Financials Index
SunTrustWachovia
S&P 500 Index
As originally reported 10-year compound annual growth rate 18.2%
As originally reported 10-year compound annual growth rate 20.7%
BB&T’s 10-year compound annual dividend growth rate is 13.0% compared to 4.9% for the S&P 500.
4
BB&T Corporation (“BB&T” or “the Corporation”) is a financial holding company headquartered in Winston-Salem,
North Carolina. With consolidated assets at December 31, 2005, totaling $109.2 billion, BB&T is the ninth largest
banking organization in the United States. As of December 31, 2005, BB&T’s banking subsidiaries operated more
than 1,400 branch offices in eleven states and Washington, D.C.
BB&T’s largest subsidiary, Branch Banking and Trust Company, was founded in 1872 and is the oldest bank based in
North Carolina. Through its subsidiaries, BB&T offers a wide range of lending and deposit services to businesses and
individuals. BB&T’s subsidiaries also provide trust services, wealth management, retail and wholesale insurance services,
investment and capital markets services, leasing, factoring, treasury services, asset management, international
services, payroll processing and bankcard services.
BB&T’s current organization was formed by a merger-of-equals in 1995 between the former BB&T Financial Corporation
and Southern National Corporation. In the past 15 years, BB&T has consummated acquisitions of 53 banks and thrifts,
77 insurance agencies, and 28 nonbank financial services companies.
CORPORATE PROFILE
5
A B O U T T H E R E V I E W
The BB&T Corporation 2005 Annual Review is presented in a summary format to provide information regarding the
performance of BB&T in a manner that is meaningful and useful to the widest range of readers. The audited consolidated
financial statements of BB&T Corporation and its subsidiaries and other more detailed analytical information regarding
the Corporation are contained in the BB&T Corporation Annual Report on Form 10-K for the year ended December 31,
2005, filed with the Securities and Exchange Commission.
This 2005 Annual Review contains financial information determined by methods other than in accordance with
Generally Accepted Accounting Principles (“GAAP”). BB&T’s management uses these “non-GAAP” measures in their
analysis of the Company’s performance. Non-GAAP measures typically adjust GAAP performance measures to exclude
the effects of charges, expenses or gains related to the consummation of mergers and acquisitions, as well as the
amortization of intangibles and purchase accounting-related adjustments in the case of “cash basis” performance
measures. These non-GAAP measures may also exclude other significant gains, losses or expenses that are unusual in
nature and not expected to recur. Since these items and their impact on BB&T’s performance are difficult to predict,
management believes presentations of financial measures excluding the impact of these items provide useful supple-
mental information that is essential to a proper understanding of BB&T’s core operating results. These disclosures
should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they
necessarily comparable to non-GAAP performance measures that may be presented by other companies.
F O R WA R D - LO O K I N G STAT E M E N T S
This BB&T Corporation 2005 Annual Review contains certain forward-looking statements as defined in the Private
Securities Litigation Reform Act of 1995. These statements may address issues that involve significant risks and
uncertainties. Although we believe that the expectations reflected in this discussion are reasonable, actual results
may be materially different. Please refer to BB&T’s Annual Report on Form 10-K for the year ended December 31,
2005, for a more thorough description of the types of risks and uncertainties that may affect management’s
forward-looking statements.
05BB&T ANNUAL REVIEW
6
I am pleased to report that 2005 was a strong year
for BB&T, a year in which we achieved many important
strategic and financial goals. 2005 marked the end of
a self-imposed two-year period during which we
determined not to announce any new plans for bank
or thrift acquisitions. Instead, we used this hiatus to
strengthen our core operations and focus our atten-
tion on developing strategies to drive BB&T’s organic
growth. Equipped with the lessons of the last two
years and with the significant investments we have
made for the future, we clearly have tremendous
opportunity at BB&T.
Significant Accomplishments During 2005
2005 represents BB&T’s 24th consecutive year of
record operating earnings. Net income for the year
totaled $1.654 billion, or $3.00 per diluted share.
These amounts reflect increases of 6.1% and 7.1%,
respectively, compared to results for 2004. Excluding
the effects of merger-related items and nonrecurring
charges from both 2005 and 2004, BB&T’s operating
earnings for 2005 totaled $1.674 billion, an increase
of 7.2% compared to the prior year. On a diluted per
share basis, operating earnings for 2005 were $3.04,
an increase of 8.2% compared with 2004.
Cash basis measurements of performance exclude the
effects that intangible assets, purchase accounting
adjustments and the related amortization expenses
have on operating earnings. Many of our internal
financial goals are based on cash basis performance
because we believe these results provide a better
indication of the company’s actual economic perform-
ance. On a cash basis, our operating earnings totaled
$1.763 billion for the year, an increase of 7.1% com-
pared to cash basis operating earnings in 2004. On a
diluted per share basis, cash basis earnings for 2005
were $3.20, up 8.1% compared with 2004. Our cash
basis return on average tangible assets was 1.77% for
2005 and the cash basis return on average tangible
equity was 27.82% for the year. Both percentages
reflect very healthy returns.
The core of BB&T’s business was created 11 years
ago by the merger-of-equals between BB&T Financial
Corporation and Southern National Corporation. We
consider this landmark event in our corporate history
to be the beginning, the yardstick by which we meas-
ure our progress, growth and performance. Over the
last 10 years since the first full year of combined
operations following the merger-of-equals, BB&T
has produced phenomenal balance sheet growth, as
TO OUR SHAREHOLDERS:
➡
7
John A. Allison
Chairman and Chief Executive Officer
05BB&T ANNUAL REVIEW
8
With BB&T providing a
strong financial foundation,
the possibilities are infinite.
Our clients come from
all backgrounds and
all walks of life.
They depend on us
to give flight to their dreams,
and we deliver.
Our partnerships are
rooted in careful
money management,
wise investment strategies
and opportunities
to achieve
any goal imaginable.
© 2006 BRYAN LARSEN ALL RIGHTS RESERVED
C O M M U N I T I E SO P P O R T U N I T Y I N O U R
assets have increased from $20.5 billion to $109.2 bil-
lion, a compound annual growth rate of 18.2%. During
that same 10-year period, operating earnings as origi-
nally reported have increased at a compound annual
rate of 20.7%, an exceptional achievement.
Our combined loan and deposit growth during 2005
was among the strongest in our history, with solid
increases in all our loan categories and 10.2% growth
in average noninterest-bearing deposits. Our loans
also continued to reflect excellent credit quality,
as evidenced by a net charge-off rate of .30% for
2005 compared to an industry average of .64%.
Nonperforming assets improved to .27% of total
assets, also substantially better than the industry
average of .48%.
In addition to our improving performance, BB&T made
important progress on other corporate initiatives. Our
banking network generated 90,000 net new client
accounts during 2005 in connection with the imple-
mentation of strategies to improve organic growth,
reflecting a significant advancement in this measure
compared to recent years. Also, we hired a number of
revenue producers throughout our footprint and are in
the early stages of rolling out an exciting new advertis-
ing campaign. Other successful developments included
improving growth rates in our sales finance business
and success moving market share in our insurance
operations. Combined with investments in our de novo
branch building process, we are positioning the organi-
zation to react more quickly to the marketplace and to
grow core revenues.
9
05BB&T ANNUAL REVIEW
1.00
3.00
2.00
’04’03’02’01 ’05
Diluted Earnings Per Share$ | based on operating earnings
3.04
.00
1.50
1.25
.25
’04’03’02’01 ’05
Dividends Paid Per Share$
1.46
1.00
.75
.50
’00’99’98’97’96’95
0
60
50
10
’04’03’02’01 ’05
Dividend Payout Ratio%
48.3%
40
30
20
’00’99’98’97’96’95
0.00
3.00
2.00
1.00
’04’03’02’01 ’05
Cash Basis Diluted Earnings Per Share$ | based on cash basis operating earnings
3.20
18.00
28.00
23.00
’04’03’02’01 ’05
Cash Basis Return on Average Common Equity% | based on cash basis operating earnings
27.82
0.0
45.0
15.0
’04’03’02’01 ’05
Cash Basis E!ciency Ratio% | based on cash basis operating earnings
50.4
30.0
0.0
’04’03’02’01 ’05
Fee Income Ratio% | based on operating earnings
39.1
30.0
15.0
0
1,800
1,600
200
’04’03’02’01 ’05
Operating EarningsMillion $
1,674
1,200
800
400
’00’99’98’97’96’95
1,400
1,000
600
0
120
100
’04’03’02’01 ’05
Total AssetsBillion $
109
60
20
’00’99’98’97’96’95
80
40
$100
’04’03’02’01 ’05
BB&T$426
$400
$300
$200
’00’99’98’97’96’95
Bank of America
S&P 500 Financials Index
SunTrustWachovia
S&P 500 Index
As originally reported 10-year compound annual growth rate 18.2%
As originally reported 10-year compound annual growth rate 20.7%
BB&T’s 10-year compound annual dividend growth rate is 13.0% compared to 4.9% for the S&P 500.
➡
➡
RETURNS TO INVESTORS
BB&T has been a rewarding long-term investment for our shareholders. Unfortunately,
fluctuations in our share price were generally in line with the banking sector during
2005, largely driven by market fears of an interest rate envi-
ronment that has grown more difficult for banks throughout the
year. However, as you can see in the adjacent table, BB&T’s
total return to shareholders has outperformed the S&P 500 and
the S&P Financials over the last 5, 10, 15 and 20 years.
At BB&T, one of our most important objectives is to reward our
shareholders with a growing and dependable cash dividend. To
that end, during 2005 we increased the annual cash dividend
9.0% per share, marking the 34th consecutive year that BB&T
has increased its dividend. We have paid a dividend every year
since 1903. The compound annual growth rate in BB&T’s cash
dividends has been 13.0% over the last 10 years compared to a
4.9% increase in dividends for the S&P 500 Index. Our goal is to pay out between
40% and 50% of our cash basis operating earnings per share in dividends.
10
Total Compound Annual ReturnDecember 31, 2005
BB&T S&P 500 S&P Financials
5 Year 5.7 % .6 % 3.8 %10 Year 15.6 9.1 13.315 Year 18.8 11.5 17.020 Year 14.8 11.9 N/A
For publicly traded companies over the last 20 years 63%, and over the last 78 years 96%, of the total return to shareholders has comefrom dividends and dividend reinvestment.*
*Brandes Institute
In recognition of BB&T’s outstanding track record
of paying dividends, the Company was again
designated as a “Dividend Achiever” by
Mergent, Inc., a provider of global financial
information. Only 2.0% of the 14,000 publicly-
traded companies in the Mergent study
received this recognition. In addition, BB&T
was named to the S&P 500 Index “Dividend
Aristocrats” and S&P’s “High-Yield Dividend
Aristocrats.” The latter designation is designed
to measure the performance of the 50 highest
dividend yielding stocks in the S&P Composite
1500 that have consistently increased their div-
idend for at least 25 years. We are very proud
of these recognitions and remain committed to
rewarding our shareholders.
1.00
3.00
2.00
’04’03’02’01 ’05
Diluted Earnings Per Share$ | based on operating earnings
3.04
.00
1.50
1.25
.25
’04’03’02’01 ’05
Dividends Paid Per Share$
1.46
1.00
.75
.50
’00’99’98’97’96’95
0
60
50
10
’04’03’02’01 ’05
Dividend Payout Ratio%
48.3%
40
30
20
’00’99’98’97’96’95
0.00
3.00
2.00
1.00
’04’03’02’01 ’05
Cash Basis Diluted Earnings Per Share$ | based on cash basis operating earnings
3.20
18.00
28.00
23.00
’04’03’02’01 ’05
Cash Basis Return on Average Common Equity% | based on cash basis operating earnings
27.82
0.0
45.0
15.0
’04’03’02’01 ’05
Cash Basis E!ciency Ratio% | based on cash basis operating earnings
50.4
30.0
0.0
’04’03’02’01 ’05
Fee Income Ratio% | based on operating earnings
39.1
30.0
15.0
0
1,800
1,600
200
’04’03’02’01 ’05
Operating EarningsMillion $
1,674
1,200
800
400
’00’99’98’97’96’95
1,400
1,000
600
0
120
100
’04’03’02’01 ’05
Total AssetsBillion $
109
60
20
’00’99’98’97’96’95
80
40
$100
’04’03’02’01 ’05
BB&T$426
$400
$300
$200
’00’99’98’97’96’95
Bank of America
S&P 500 Financials Index
SunTrustWachovia
S&P 500 Index
As originally reported 10-year compound annual growth rate 18.2%
As originally reported 10-year compound annual growth rate 20.7%
BB&T’s 10-year compound annual dividend growth rate is 13.0% compared to 4.9% for the S&P 500.
➡
➡
11
O U R P E O P L EO P P O R T U N I T Y S T A R T S W I T H
People come first at BB&T.
By developing strong.
relationships internally,
we are well-equipped to.
develop equally strong.
relationships with clients.
across our markets.
The fundamental.
difference between.
BB&T and our competitors.
is the commitment.
from each employee.
to make a difference.
in every client relationship.
© 2006 BRYAN LARSEN ALL RIGHTS RESERVED
12
O U R M I S S I O NTo Make the World a Better Place to Live, by:
Helping our Clients Achieve Economic Successand Financial Security;
Creating a Place Where our Employees canLearn, Grow and be Fulfilled in their Work;
Making the Communities in which we WorkBetter Places to be; and thereby:
Optimizing the Long-Term Return to ourShareholders, while Providing a Safe andSound Investment.
05BB&T ANNUAL REVIEW
13
OUR VALUES
Values are practical habits that enable us as individ-
uals to live, be successful and achieve happiness in
our lives. At every level of BB&T, our values empower
us to achieve our mission and corporate purpose. We
emphasize 10 core values that are the foundation of
our business philosophy.
1. REALITY. What is, is. If we want to improve, we
must act within the context of reality. The foundation
for quality decision-making is a careful understanding
of the facts.
2. REASON (Objectivity). There is only one “natural
resource” – the human mind. We must be able to
think in an integrated way, thereby avoiding logical
contradictions. Our goal is to objectively make the
best decisions to accomplish our purpose.
3. INDEPENDENT THINKING. We challenge our
employees to use their individual minds to their opti-
mum to make rational decisions. In this context, each
of us is responsible for what we do and who we are.
Creativity is strongly encouraged and is only possible
with independent thought. There is infinite oppor-
tunity for each of us to do whatever we do better.
1.00
3.00
2.00
’04’03’02’01 ’05
Diluted Earnings Per Share$ | based on operating earnings
3.04
.00
1.50
1.25
.25
’04’03’02’01 ’05
Dividends Paid Per Share$
1.46
1.00
.75
.50
’00’99’98’97’96’95
0
60
50
10
’04’03’02’01 ’05
Dividend Payout Ratio%
48.3%
40
30
20
’00’99’98’97’96’95
0.00
3.00
2.00
1.00
’04’03’02’01 ’05
Cash Basis Diluted Earnings Per Share$ | based on cash basis operating earnings
3.20
18.00
28.00
23.00
’04’03’02’01 ’05
Cash Basis Return on Average Common Equity% | based on cash basis operating earnings
27.82
0.0
45.0
15.0
’04’03’02’01 ’05
Cash Basis E!ciency Ratio% | based on cash basis operating earnings
50.4
30.0
0.0
’04’03’02’01 ’05
Fee Income Ratio% | based on operating earnings
39.1
30.0
15.0
0
1,800
1,600
200
’04’03’02’01 ’05
Operating EarningsMillion $
1,674
1,200
800
400
’00’99’98’97’96’95
1,400
1,000
600
0
120
100
’04’03’02’01 ’05
Total AssetsBillion $
109
60
20
’00’99’98’97’96’95
80
40
$100
’04’03’02’01 ’05
BB&T$426
$400
$300
$200
’00’99’98’97’96’95
Bank of America
S&P 500 Financials Index
SunTrustWachovia
S&P 500 Index
As originally reported 10-year compound annual growth rate 18.2%
As originally reported 10-year compound annual growth rate 20.7%
BB&T’s 10-year compound annual dividend growth rate is 13.0% compared to 4.9% for the S&P 500.
THE BB&T CULTURE
BB&T is a company that has largely been built through acquisitions of existing companies.
Since 1980, we have acquired 72 banking or thrift organizations with approximately $70
billion in assets. Not surprisingly, it is a tremendous challenge to unify the employees of so
many acquired companies to create a culture of common purpose. While we have been
careful to pursue acquisitions of companies with cultures similar to our own, it takes a
committed effort to encourage our employees to embrace and live the BB&T values. We
guide this process by continually emphasizing the meaning and importance of our values,
and as a result, we have seen our company’s culture flourish.
The way we reward our shareholders is by growing revenues and earnings based on the
relationships we build with our clients. Our business is fundamentally about people building
trusting relationships with other people because we care about and are personally committed
to helping our clients achieve their financial goals. Our corporate mission and core values are
ultimately about instilling this basic principle in our people. We believe the strength of our
culture translates into superior performance over time because our employees are self-
motivated to provide excellent service for our clients.
➡
➡
A significant aspect of self-fulfilling work comes from
creative thought and action.
4. PRODUCTIVITY. We are committed to be producers
of wealth and well-being by taking the actions neces-
sary to accomplish our mission.
5. HONESTY. Being honest is simply being consistent
with reality. To be dishonest is to be in conflict with
reality and is, therefore, self-defeating. We must keep
our agreements with all our constituents.
6. INTEGRITY. BB&T strives to be an organization that
demonstrates the highest level of integrity. Because
we have developed our principles logically, based on
reality, we will always act consistently with our princi-
ples. Regardless of any short-term benefits, acting
inconsistently with our principles is to our long-term
detriment. Therefore, we will not compromise our
principles in any situation.
7. JUSTICE (Fairness). Individuals should be evalu-
ated and rewarded objectively (for better or worse)
based on their contribution to accomplishing our
mission and their adherence to our values. Those who
contribute the most must receive the most. If we treat
our employees justly, we will retain the best employ-
ees and create a long-term competitive advantage.
8. PRIDE. Pride is the psychological reward we earn
from living by our values. Each of us must perform our
work in such a manner that permits us to be justly
proud of what we have accomplished.
9. SELF-ESTEEM (Self-Motivation). We want employ-
ees who have strong personal goals and who expect
to accomplish their goals within the context of our
mission. We want our employees to achieve a high
level of justly earned self-esteem through excellence
in their work.
10. TEAMWORK / MUTUAL SUPPORTIVENESS. While
independent thought and strong personal goals are
critically important, our work is accomplished within
teams. Each of us must consistently act to achieve the
agreed-upon objectives of the team, while acting in a
mutually supportive manner.
14
Our values are more than words on paper. Earlier this year, we publicly announced
a lending policy that is reflective of the impact our corporate values have on our
day-to-day operations. We announced that BB&T would not lend to commercial
developers who plan to build private projects on land taken from private citizens by
government entities using eminent domain. The decision to adopt this policy was
not based on a financial analysis, but rather on what we, as a values-driven com-
pany, believed was the right thing to do. The response to this announcement has
been overwhelmingly positive, as we have received supportive comments from
thousands of clients and shareholders.
➡
➡
15
“All of our employees are focused on helping our clients achieve economic successand financial security. We consider it a great opportunity to serve our clients byproviding reliable, responsive, empathetic service. Our goal is to provide everyonewe serve with the Perfect Client Experience and for our clients to benefit from themany opportunities at BB&T.”
Kelly S. King
Chief Operating Officer
16
1.00
3.00
2.00
’04’03’02’01 ’05
Diluted Earnings Per Share$ | based on operating earnings
3.04
.00
1.50
1.25
.25
’04’03’02’01 ’05
Dividends Paid Per Share$
1.46
1.00
.75
.50
’00’99’98’97’96’95
0
60
50
10
’04’03’02’01 ’05
Dividend Payout Ratio%
48.3%
40
30
20
’00’99’98’97’96’95
0.00
3.00
2.00
1.00
’04’03’02’01 ’05
Cash Basis Diluted Earnings Per Share$ | based on cash basis operating earnings
3.20
18.00
28.00
23.00
’04’03’02’01 ’05
Cash Basis Return on Average Common Equity% | based on cash basis operating earnings
27.82
0.0
45.0
15.0
’04’03’02’01 ’05
Cash Basis E!ciency Ratio% | based on cash basis operating earnings
50.4
30.0
0.0
’04’03’02’01 ’05
Fee Income Ratio% | based on operating earnings
39.1
30.0
15.0
0
1,800
1,600
200
’04’03’02’01 ’05
Operating EarningsMillion $
1,674
1,200
800
400
’00’99’98’97’96’95
1,400
1,000
600
0
120
100
’04’03’02’01 ’05
Total AssetsBillion $
109
60
20
’00’99’98’97’96’95
80
40
$100
’04’03’02’01 ’05
BB&T$426
$400
$300
$200
’00’99’98’97’96’95
Bank of America
S&P 500 Financials Index
SunTrustWachovia
S&P 500 Index
As originally reported 10-year compound annual growth rate 18.2%
As originally reported 10-year compound annual growth rate 20.7%
BB&T’s 10-year compound annual dividend growth rate is 13.0% compared to 4.9% for the S&P 500.
2006 KEY STRATEGIC OBJECTIVES
During our self-imposed hiatus from bank and thrift
acquisitions, we carefully examined our businesses
and identified a number of areas where we can
improve our performance. In 2006 we will focus on
four broad objectives to drive improved results.
1. Achieve Superior Revenue Growth
Organically growing revenues continues to be our
greatest challenge and remains our highest priority in
2006. In addition to continuing to execute on our
world-class sales system (the BB&T Decathlon), we are
implementing a number of additional strategies to
meet this objective. For example, we plan to initiate
the building of 60 new branches throughout our foot-
print in selective high-growth and high-return mar-
kets. In connection with these plans, we are working
to optimize the effectiveness of our branch delivery
system and are developing a centralized strategy to
identify the best locations to open new branches, to
implement customized marketing plans and to staff
the new branches with specially trained financial cen-
ter managers who are particularly skilled in starting
up new locations. With these elements in place, we
will be able to react much more quickly to opportuni-
ties in the marketplace and will have a consistent and
easily replicated “template” for building branches
that will improve our market coverage and drive
growth in market share.
While we have rapidly grown in recent years and
entered a number of new markets, BB&T has only
spent a fraction of what our competitors spend on
advertising and marketing. In the first quarter of 2006
we launched an exciting new advertising and market-
ing campaign led by the positioning statement,
➡
17
“There’s opportunity here.” With the energy of this
campaign, we will work much harder to communicate
the BB&T difference – that we offer a combination of
market-competitive financial services and expertise to
serve our clients’ most complex financial needs, along
with a culture that places relentless emphasis on
exceptional client service. Our approach includes a
community banking model that places decision-mak-
ing closer to the client than does any other large
financial institution. BB&T combines the personality,
client loyalty and sincerity of a community bank with
the sophisticated, comprehensive expertise of the
biggest banking systems. Our approach is unique and
uniquely beneficial to our clients. Given our successes
in new markets without significant advertising, we
are confident that this new campaign will greatly
strengthen our sales efforts and improve brand
recognition throughout our markets.
We have also made significant investments in the
number of our production personnel. We are investing
in the payroll services business, where we believe
we have an opportunity to capture small business
accounts, providing both payroll processing and
human systems services. We believe these invest-
ments will drive faster revenue growth rates in 2006.
2. Provide World-Standard Client Service
Sales and service are inextricably connected. The fun-
damental difference between BB&T and our competi-
tors is the commitment from each employee to make
a difference in every client relationship. In 2006, we
will strive for excellent execution of the Perfect Client
Experience initiative, which involves fully understand-
ing what our clients expect and aligning our training,
coaching and rewards systems to meet those expecta-
tions. We are also implementing or strengthening
We encourage our employees to see their work as a fundamental purpose in their lives and to pursue it with intensity and excellence.
We are committed to developing our people, because if we have employees who are passionate about providing excellent service and building trusting relationships to help our clients be successful, BB&T and our clients will win in the long term.
05BB&T ANNUAL REVIEW
➡
18
strategies to improve our problem resolution processes, to provide
excellent execution for transactional services and to deliver excellence in
consultative services.
While we have traditionally enjoyed lower employee turnover than our
competitors, ensuring that we maintain and increase this advantage is
critical to our future success. Quality client service is a function of pro-
viding reliable, empathetic, responsive and competent service – the key
is developing relationships, to know and understand our clients.
Employee turnover is obviously a significant obstacle to developing these
meaningful relationships. We are now more proactive than ever in
reducing turnover in key client contact positions. Our employees in lead-
ership positions will receive special training and will be evaluated based
on specific goals for employee retention.
Ultimately, the success of our
business will be determined by
our ability to fulfill one of the fundamental
commitments of our mission: to help our clients
achieve economic success and financial security.
Fulfilling this commitment requires employees who are
passionate about their work. We encourage our employees to
see their work as a fundamental purpose in their lives and to
pursue it with intensity and excellence. We are committed to devel-
oping our people, because if we have employees who are passionate
about providing excellent service and building trusting relationships
to help our clients be successful, BB&T and our clients will win in the
long term.
3. Accomplish Superior Efficiency, Productivity and
3. Earnings Growth
Our third objective for 2006 is to continue to improve our earnings
growth rate, including an unrelenting commitment to improving efficiency
and productivity. Our objective is to achieve a superior price-to-earnings
ratio by producing superior growth in cash basis earnings per share and
cash basis return on equity, while maintaining a sound financial position.
1.00
3.00
2.00
’04’03’02’01 ’05
Diluted Earnings Per Share$ | based on operating earnings
3.04
.00
1.50
1.25
.25
’04’03’02’01 ’05
Dividends Paid Per Share$
1.46
1.00
.75
.50
’00’99’98’97’96’95
0
60
50
10
’04’03’02’01 ’05
Dividend Payout Ratio%
48.3%
40
30
20
’00’99’98’97’96’95
0.00
3.00
2.00
1.00
’04’03’02’01 ’05
Cash Basis Diluted Earnings Per Share$ | based on cash basis operating earnings
3.20
18.00
28.00
23.00
’04’03’02’01 ’05
Cash Basis Return on Average Common Equity% | based on cash basis operating earnings
27.82
0.0
45.0
15.0
’04’03’02’01 ’05
Cash Basis E!ciency Ratio% | based on cash basis operating earnings
50.4
30.0
0.0
’04’03’02’01 ’05
Fee Income Ratio% | based on operating earnings
39.1
30.0
15.0
0
1,800
1,600
200
’04’03’02’01 ’05
Operating EarningsMillion $
1,674
1,200
800
400
’00’99’98’97’96’95
1,400
1,000
600
0
120
100
’04’03’02’01 ’05
Total AssetsBillion $
109
60
20
’00’99’98’97’96’95
80
40
$100
’04’03’02’01 ’05
BB&T$426
$400
$300
$200
’00’99’98’97’96’95
Bank of America
S&P 500 Financials Index
SunTrustWachovia
S&P 500 Index
As originally reported 10-year compound annual growth rate 18.2%
As originally reported 10-year compound annual growth rate 20.7%
BB&T’s 10-year compound annual dividend growth rate is 13.0% compared to 4.9% for the S&P 500.
1.00
3.00
2.00
’04’03’02’01 ’05
Diluted Earnings Per Share$ | based on operating earnings
3.04
.00
1.50
1.25
.25
’04’03’02’01 ’05
Dividends Paid Per Share$
1.46
1.00
.75
.50
’00’99’98’97’96’95
0
60
50
10
’04’03’02’01 ’05
Dividend Payout Ratio%
48.3%
40
30
20
’00’99’98’97’96’95
0.00
3.00
2.00
1.00
’04’03’02’01 ’05
Cash Basis Diluted Earnings Per Share$ | based on cash basis operating earnings
3.20
18.00
28.00
23.00
’04’03’02’01 ’05
Cash Basis Return on Average Common Equity% | based on cash basis operating earnings
27.82
0.0
45.0
15.0
’04’03’02’01 ’05
Cash Basis E!ciency Ratio% | based on cash basis operating earnings
50.4
30.0
0.0
’04’03’02’01 ’05
Fee Income Ratio% | based on operating earnings
39.1
30.0
15.0
0
1,800
1,600
200
’04’03’02’01 ’05
Operating EarningsMillion $
1,674
1,200
800
400
’00’99’98’97’96’95
1,400
1,000
600
0
120
100
’04’03’02’01 ’05
Total AssetsBillion $
109
60
20
’00’99’98’97’96’95
80
40
$100
’04’03’02’01 ’05
BB&T$426
$400
$300
$200
’00’99’98’97’96’95
Bank of America
S&P 500 Financials Index
SunTrustWachovia
S&P 500 Index
As originally reported 10-year compound annual growth rate 18.2%
As originally reported 10-year compound annual growth rate 20.7%
BB&T’s 10-year compound annual dividend growth rate is 13.0% compared to 4.9% for the S&P 500.
➡
➡
19
© 2006 BRYAN LARSEN ALL RIGHTS RESERVED
F U T U R EO P P O R T U N I T Y F O R T H E
What’s on the horizon
for 2006 and beyond?
BB&T will continue our
forward momentum,
exploring new territory
with the same passion for
performance that has
driven us for decades.
We consider our
evolution a journey.
Along the way,
we will continue
to learn,
to grow,
to encourage
and challenge one another,
and to unlock
the enormous potential
in each of us.
Our primary long-term performance goal is to grow
cash basis earnings per share at 10% or greater. Over
the long term we have exceeded this goal, but have
fallen short on our objective over the last couple of
years. As previously outlined, we have made numerous
investments to enhance our revenue production capa-
bilities. We expect these investments to pay off in the
coming years.
4. Execute “Value Improvement Agenda”
Our fourth key objective for 2006 encompasses six
areas where we see significant opportunity to imme-
diately improve performance. First, we want to drive
a higher level of performance for our new regions by
increasing our marketing efforts and fully utilizing our
strong sales culture. In particular, we will strive to
accelerate efficiency improvement and deposit acqui-
sition in these regions. Realizing our potential in new
markets continues to present a tremendous opportu-
nity for revenue growth since more than half of our
regions have been a part of BB&T for less than five
years. While these new regions are improving and
some are doing very well, there are still significant
differences in the overall performance of the new
regions compared to our core regions.
Second, we are devoting extra energy to retail deposit
base relationship growth throughout our regions.
BB&T has long been an organization led by lending.
We see a significant opportunity for profitable deposit
growth in our retail franchise, including increased
new client acquisition, improved retention and greater
cross-sell of deposit products to nondeposit clients.
Our third focal area is commercial deposit base rela-
tionship growth. We believe there is an excellent
opportunity to accelerate our commercial deposit
growth by increasing our incentives for deposit acqui-
sition and refocusing our commercial sales efforts
on “deposit rich” prospects.
Fourth, we want to increase our focus on organic
revenue growth in insurance, particularly through
cross-sell of deposit-based commercial banking
relationships to insurance clients, where we have
excellent opportunities.
Fifth, we want to strengthen our Wealth Management /
Private Banking platform and refocus on deposit
gathering. BB&T has largely been built by acquiring
community banks and thrifts that did not have signifi-
cant trust businesses. Our Wealth Management /
Private Banking business continues to evolve and
expand, and we are optimistic that we are on the
verge of significantly accelerating the growth rates
and profitability of this division.
Finally, we will leverage our competitive advantages
to selectively pursue merger and acquisition partners.
We will be very disciplined in this effort, however, and
will not lose focus on organic growth initiatives. We
believe internal growth is far more important at this
stage than growing through mergers and acquisitions.
20
➡
➡
21
In closing, I want to extend my sincere appreciation to Alfred E. Cleveland and Albert F. Zettlemoyer, who both
retired from BB&T’s Corporate Board of Directors in 2005. They provided strong leadership and demonstrated a
loyal commitment to BB&T and our shareholders during their years of service. I also want to personally thank
Scott E. Reed, who retired as BB&T’s Chief Financial Officer in June. Scott made a tremendous contribution to
BB&T’s evolution and financial performance during his 33 years with the company, including 24 years as Chief
Financial Officer.
BB&T’s vision is to create the best financial institution possible. Our passion is to consistently provide our clients
with better value through rational innovation and productivity improvement. While we face many challenges, I am
personally very optimistic about BB&T’s future. We have strong relationships with our clients, high-quality employees,
healthy markets, excellent technology and products, rational strategies for growth and profitability and the right
philosophy for future prosperity.
As always, thank you for your support as a BB&T shareholder.
Sincerely,
John A. Allison
Chairman and Chief Executive Officer
February 27, 2006
➡
© 2006 BRYAN LARSEN ALL RIGHTS RESERVED
22
Corporate Board of Directors
05BB&T ANNUAL REVIEW
John A. Allison IVChairman and Chief Executive OfficerBB&T Corporation and Branch Banking and Trust Company Winston-Salem, NC
Jennifer S. Banner Chief Executive OfficerSchaad PropertiesKnoxville, TN
Anna R. CablikPresidentAnasteel & Supply Company, LLCand Anatek, Inc.Marietta, GA
Nelle R. Chilton Director and President Dickinson Fuel Company, Inc.Charleston, WV
Ronald E. Deal Chairman Wesley Hall, Inc.Hickory, NC
Tom D. Efird PresidentStandard Distributors, Inc. Gastonia, NC
Barry J. Fitzpatrick Chairman Branch Banking and Trust Company of Virginia Great Falls, VA
L. Vincent Hackley, Ph.D. President and Chief Executive OfficerHackley & Associates of North Carolina Chapel Hill, NC
Jane P. Helm Vice Chancellor of Business Affairs Appalachian State University Boone, NC
John P. Howe III, M.D.President and Chief Executive OfficerProject HOPE (Health Opportunities forPeople Everywhere)Washington, D.C.
James H. Maynard Chairman and Chief Executive OfficerInvestors Management CorporationChairmanGolden Corral CorporationRaleigh, NC
Albert O. McCauley President and Chief Executive OfficerMcCauley & McDonald Investments, Inc.Fayetteville, NC
J. Holmes Morrison Retired Chairman, President and Chief Executive OfficerOne Valley Bancorp, Inc.Charleston, WV
Nido R. Qubein PresidentHigh Point UniversityChairmanCreative Services, Inc. High Point, NC
E. Rhone Sasser Retired Chairman and Chief Executive OfficerUnited Carolina Bancshares Corporation Whiteville, NC
23
Executive Management
John A. Allison IV Chairman and Chief Executive Officer
Ricky K. BrownSenior Executive Vice President and Banking Network Manager
W. Kendall Chalk Senior Executive Vice President and Chief Credit Officer
Barbara F. Duck Senior Executive Vice President and Production and Risk Manager
Robert E. Greene Senior Executive Vice President and Administrative Services Manager
Christopher L. HensonSenior Executive Vice President and Chief Financial Officer
Kelly S. King Chief Operating Officer
Steven B. Wiggs Senior Executive Vice Presidentand Chief Marketing Officer
C. Leon Wilson IIISenior Executive Vice President and Operations Division Manager
24
Market Coverage
Branch Locations
Percentage of Deposit Market Number ofBB&T’s Deposits (2) Share Rank (2) Branches (3)
North Carolina (1) 27 % 2nd 334Virginia 29 2nd 404Georgia 8 6th 119Kentucky 5 4th 92South Carolina 8 3rd 99West Virginia 6 1st 80Maryland 8 6th 127Tennessee 2 7th 47Florida 5 11th 90Washington, D.C. 2 5th 9
(1) Excludes home office deposits(2) Source: SNL Financial(3) BB&T also operates two branches in Alabama and one branch in Indiana
BB&T Capital Markets
BB&T Commercial Finance
Laureate Capital
BB&T Leasing
Lendmark Financial Services
Prime Rate Premium Finance
She!eld Financial
Vine Street
BB&T Insurance
Scott & Stringfellow
Regional Acceptance
BB&T Community
BB&T Headquarters
25
Map generated by SpatiaLogic
26
Shareholder Information
PurposeBB&T’s ultimate purpose is to create superior, long-term economic rewards for our shareholders.
Stock Exchange and Trading SymbolThe common stock of BB&T Corporation is traded on the New York Stock Exchange under the symbol BBT.
Stock Performance*The accompanying graph reflects the performance of a $100 investment in BB&T’s stock since December 31, 1995, theyear end following the completion of the BB&T and Southern National Corporation merger-of-equals, in comparison withother regional competitors, the S&P 500 Financials Index and the S&P 500 Index.
Source: Bloomberg
1.00
3.00
2.00
’04’03’02’01 ’05
Diluted Earnings Per Share$ | based on operating earnings
3.04
.00
1.50
1.25
.25
’04’03’02’01 ’05
Dividends Paid Per Share$
1.46
1.00
.75
.50
’00’99’98’97’96’95
0
60
50
10
’04’03’02’01 ’05
Dividend Payout Ratio%
48.3%
40
30
20
’00’99’98’97’96’95
0.00
3.00
2.00
1.00
’04’03’02’01 ’05
Cash Basis Diluted Earnings Per Share$ | based on cash basis operating earnings
3.20
18.00
28.00
23.00
’04’03’02’01 ’05
Cash Basis Return on Average Common Equity% | based on cash basis operating earnings
27.82
0.0
45.0
15.0
’04’03’02’01 ’05
Cash Basis E!ciency Ratio% | based on cash basis operating earnings
50.4
30.0
0.0
’04’03’02’01 ’05
Fee Income Ratio% | based on operating earnings
39.1
30.0
15.0
0
1,800
1,600
200
’04’03’02’01 ’05
Operating EarningsMillion $
1,674
1,200
800
400
’00’99’98’97’96’95
1,400
1,000
600
0
120
100
’04’03’02’01 ’05
Total AssetsBillion $
109
60
20
’00’99’98’97’96’95
80
40
$100
’04’03’02’01 ’05
BB&T$426
$400
$300
$200
’00’99’98’97’96’95
Bank of America
S&P 500 Financials Index
SunTrustWachovia
S&P 500 Index
As originally reported 10-year compound annual growth rate 18.2%
As originally reported 10-year compound annual growth rate 20.7%
BB&T’s 10-year compound annual dividend growth rate is 13.0% compared to 4.9% for the S&P 500.
Total Compound Annual Return to Shareholders*
BB&T S&P 500 S&P FinancialsIndex Index
5 Year 5.7 % .6 % 3.8 %10 Year 15.6 9.1 13.315 Year 18.8 11.5 17.020 Year 14.8 11.9 N/A * Assumes reinvestment of all cash dividends in additional
shares of the applicable stock or index.
27
Quarterly Common Stock Prices and Dividends Paid
2005 2004Quarter High Low Dividend High Low Dividend1st $ 42.24 $ 37.68 $ .35 $ 38.80 $ 34.48 $ .322nd 40.95 37.04 .35 37.91 33.02 .323rd 43.00 38.56 .38 40.46 36.38 .354th 43.92 37.39 .38 43.25 38.67 .35
Selected Market Information 2005 2004 2003 2002 2001
Market capitalization (in billions) $ 22.76 $ 23.14 $ 20.94 $ 17.40 $ 16.45 Book value per share 20.49 19.76 18.33 15.70 13.50 Dividend yield 3.48 % 3.19 % 3.16 % 2.97 % 2.71 % Dividend payout ratio 48.3 47.5 58.4 40.0 45.6
Cash Dividends 2005 2004 2003 2002 2001
Cash dividends paid per share $ 1.46 $ 1.34 $ 1.22 $ 1.10 $ .98 Increase from prior year .12 .12 .12 .12 .12 Percentage increase from prior year 9.0 % 9.8 % 10.9 % 12.2 % 14.0 % Five-year compound annual
growth rate 11.2 % Ten-year compound annual
growth rate 13.0 %
Dividend History BB&T has paid a cash dividend every year since 1903 and has increased its dividend every year for 34 consecutive years.
Dividend Recognitions • S&P 500 Dividend Aristocrats and S&P High Yield
Dividend Aristocrats • Mergent Dividend Achiever
Dividend Reinvestment Plan The Dividend Reinvestment Plan enables shareholders toreinvest dividends and/or invest additional cash in full orfractional shares of BB&T Corporation on a regular basis. For more information, contact Shareholder Services inWinston-Salem, North Carolina, at 336 733-3477.
1.00
3.00
2.00
’04’03’02’01 ’05
Diluted Earnings Per Share$ | based on operating earnings
3.04
.00
1.50
1.25
.25
’04’03’02’01 ’05
Dividends Paid Per Share$
1.46
1.00
.75
.50
’00’99’98’97’96’95
0
60
50
10
’04’03’02’01 ’05
Dividend Payout Ratio%
48.3%
40
30
20
’00’99’98’97’96’95
0.00
3.00
2.00
1.00
’04’03’02’01 ’05
Cash Basis Diluted Earnings Per Share$ | based on cash basis operating earnings
3.20
18.00
28.00
23.00
’04’03’02’01 ’05
Cash Basis Return on Average Common Equity% | based on cash basis operating earnings
27.82
0.0
45.0
15.0
’04’03’02’01 ’05
Cash Basis E!ciency Ratio% | based on cash basis operating earnings
50.4
30.0
0.0
’04’03’02’01 ’05
Fee Income Ratio% | based on operating earnings
39.1
30.0
15.0
0
1,800
1,600
200
’04’03’02’01 ’05
Operating EarningsMillion $
1,674
1,200
800
400
’00’99’98’97’96’95
1,400
1,000
600
0
120
100
’04’03’02’01 ’05
Total AssetsBillion $
109
60
20
’00’99’98’97’96’95
80
40
$100
’04’03’02’01 ’05
BB&T$426
$400
$300
$200
’00’99’98’97’96’95
Bank of America
S&P 500 Financials Index
SunTrustWachovia
S&P 500 Index
As originally reported 10-year compound annual growth rate 18.2%
As originally reported 10-year compound annual growth rate 20.7%
BB&T’s 10-year compound annual dividend growth rate is 13.0% compared to 4.9% for the S&P 500.
“Dividend Achievers represent theelite of the U.S. stock market.”Jonathan WorrallChief Executive Officer, Mergent, Inc.
28
December 31 December 312005 2004
AssetsCash and due from banks $ 2,185,571 $ 1,782,323 Interest-bearing deposits with banks 410,380 1,003,125 Federal funds sold and securities purchased under resale agreements or similar arrangements 286,233 240,387 Trading securities at fair value 706,518 334,256 Securities available for sale at fair value 19,782,966 18,838,196 Securities held to maturity at amortized cost (fair value: $125 at December 31, 2004) – 125 Loans held for sale 628,834 613,476 Loans and leases, net of unearned income 74,394,654 67,549,125 Allowance for loan and lease losses (825,300 (804,932
Loans and leases, net 73,569,354 66,744,193
Premises and equipment, net of accumulated depreciation 1,286,909 1,283,546 Goodwill 4,255,998 4,124,241 Core deposits and other intangible assets 487,525 513,539 Other assets 5,569,471 5,031,234
Total assets $ 109,169,759 $ 100,508,641
Liabilities and Shareholders’ EquityDeposits:
Noninterest-bearing deposits $ 13,476,939 $ 12,246,248 Savings and interest-checking 4,366,015 4,490,214 Money rate savings 24,548,872 23,427,797 Certificates of deposit and other time deposits 31,889,973 27,535,078
Total deposits 74,281,799 67,699,337
Federal funds purchased, securities sold under repurchase agreements and short-term borrowed funds 6,561,719 6,687,872
Long-term debt 13,118,559 11,419,624 Accounts payable and other liabilities 4,078,568 3,827,334
Total liabilities 98,040,645 89,634,167
Shareholders’ equity:Preferred stock, $5 par, 5,000,000 shares authorized, none issued or
outstanding at December 31, 2005, or at December 31, 2004 – –Common stock, $5 par, 1,000,000,000 shares authorized; 543,102,080 issued and
outstanding at December 31, 2005, and 550,406,287 at December 31, 2004 2,715,510 2,752,032 Additional paid-in capital 2,828,584 3,121,716 Retained earnings 5,951,135 5,112,034 Unvested restricted stock (9,881 (107Accumulated other comprehensive income, net of deferred income
taxes of $(207,319) at December 31, 2005, and $(66,662) at December 31, 2004 (356,234 (111,201
Total shareholders’ equity 11,129,114 10,874,474
Total liabilities and shareholders’ equity $ 109,169,759 $ 100,508,641
Consolidated Balance Sheets
BB&T Corporation and Subsidiaries(Dollars in thousands, except per share data)
) )
) )
) )
29
Year Ended Year Ended Year EndedDecember 31 December 31 December 31
2005 2004 2003
Interest IncomeInterest and fees on loans and leases $ 4,684,479 $ 3,851,147 $ 3,591,402 Interest and dividends on securities:
Taxable interest income 739,384 632,779 682,479 Tax-exempt interest income 31,430 32,831 35,930 Dividends 28,540 18,850 37,322
Interest on short-term investments 22,009 11,088 7,659
Total interest income 5,505,842 4,546,695 4,354,792
Interest ExpenseInterest on deposits 1,251,834 729,660 755,677 Interest on federal funds purchased, securities sold under repurchase
agreements and short-term borrowed funds 224,552 90,117 58,842 Interest on long-term debt 504,583 378,695 458,268
Total interest expense 1,980,969 1,198,472 1,272,787
Net Interest Income 3,524,873 3,348,223 3,082,005Provision for credit losses 217,263 249,269 247,585
Net Interest Income After Provision for Credit Losses 3,307,610 3,098,954 2,834,420
Noninterest IncomeService charges on deposits 542,655 523,319 437,524 Mortgage banking income 103,757 110,075 109,423 Trust income 140,630 119,479 113,227 Investment banking and brokerage fees and commissions 289,647 264,789 247,394 Insurance commissions 714,189 619,055 395,820 Bankcard fees and merchant discounts 112,132 102,098 83,927 Other nondeposit fees and commissions 257,173 216,498 180,045 Securities gains, net 113 6,133 126,211 Income from bank-owned life insurance 93,770 91,883 98,700 Other income 71,556 65,942 35,068
Total noninterest income 2,325,622 2,119,271 1,827,339
Noninterest ExpensePersonnel expenses 1,785,204 1,631,757 1,445,540 Occupancy and equipment expenses 471,498 415,524 371,167 Amortization of intangibles 112,307 106,348 55,650 Professional services 93,272 75,822 70,518 Merger-related and restructuring (gains) charges (10,741 5,518 89,775 Loss on early extinguishment of debt 2,943 – 384,898 Loan processing expenses 98,239 84,253 78,887 Other expenses 613,779 576,641 548,294
Total noninterest expense 3,166,501 2,895,863 3,044,729
Income Before Income Taxes 2,466,731 2,322,362 1,617,030 Provision for income taxes 812,962 763,987 552,127
Net Income $ 1,653,769 $ 1,558,375 $ 1,064,903
Basic Earnings Per Share $ 3.02 $ 2.82 $ 2.09
Diluted Earnings Per Share $ 3.00 $ 2.80 $ 2.07
Cash Dividends Paid Per Common Share $ 1.46 $ 1.34 $ 1.22
Consolidated Statements of Income
BB&T Corporation and Subsidiaries(Dollars in thousands, except per share data)
)
)) )) ))))
)) ))))
))
30
Year Year Year Year Year Year Five-YearEnded Ended Ended Ended Ended Ended Compound12/31 12/31 12/31 12/31 12/31 12/31 Growth
2005 2004 2003 2002 2001 2000 RateSummary of Operating EarningsInterest income $ 5,506 $ 4,546 $ 4,287 $ 4,434 $ 4,851 $ 4,878 2.4 %Interest expense 1,981 1,198 1,273 1,687 2,415 2,564 (5.0
Net interest income 3,525 3,348 3,014 2,747 2,436 2,314 8.8 Provision for credit losses 217 249 248 263 188 117 13.1
Net interest income after provisionfor credit losses 3,308 3,099 2,766 2,484 2,248 2,197 8.5
Noninterest income 2,324 2,119 1,827 1,541 1,246 1,043 17.4 Noninterest expense 3,133 2,890 2,548 2,195 1,943 1,830 11.4
Operating earnings before income taxes 2,499 2,328 2,045 1,830 1,551 1,410 12.1 Provision for income taxes 825 766 621 512 451 452 12.8
Operating earnings 1,674 1,562 1,424 1,318 1,100 958 11.8 Merger-related charges, net of tax 7 (4 (55 (25 (154 (115 NM Other, net of tax (1) (27 – (304 10 28 (145 NM
Net income $ 1,654 1,558 1,065 1,303 974 698 18.8 %
Per Share Based on Operating EarningsBasic $ 3.06 $ 2.83 $ 2.79 $ 2.78 $ 2.43 $ 2.12 7.6 %Diluted 3.04 2.81 2.77 2.75 2.40 2.10 7.7
Per Share Based on Net IncomeBasic $ 3.02 $ 2.82 $ 2.09 $ 2.75 $ 2.15 $ 1.55 14.3 %Diluted 3.00 2.80 2.07 2.72 2.12 1.53 14.4
Cash dividends paid 1.46 1.34 1.22 1.10 .98 .86 11.2 Book value 20.49 19.76 18.33 15.70 13.50 11.96 11.4
Selected Average Balances Assets $ 104,612 $ 96,276 $ 85,328 $ 75,779 $ 68,823 $ 61,813 11.1 %Earning assets 92,703 84,946 75,463 68,230 62,905 57,616 10.0 Securities, at amortized cost 20,467 18,218 17,058 16,939 15,887 15,241 6.1 Loans and leases 71,517 66,107 57,857 50,851 46,588 41,934 11.3 Deposits 70,346 64,816 56,948 49,118 44,242 41,416 11.2 Interest-bearing liabilities 76,813 70,610 64,285 59,444 55,330 50,135 8.9 Shareholders’ equity 11,065 10,597 8,895 7,113 5,802 4,911 17.6
Selected Year-End Balances Assets $ 109,170 $ 100,509 $ 90,467 $ 80,217 $ 70,870 $ 66,553 10.4 %Earning assets 96,777 88,718 79,209 71,228 64,087 60,987 9.7 Securities, at carrying value 20,489 19,173 16,317 17,803 16,760 15,950 5.1 Loans and leases 75,023 68,163 62,305 53,518 47,443 44,827 10.8 Deposits 74,282 67,699 59,350 51,280 44,733 43,877 11.1 Interest-bearing liabilities 80,485 73,561 66,394 62,400 56,164 53,655 8.4 Shareholders’ equity 11,129 10,874 9,935 7,388 6,150 5,420 15.5
Selected Financial Data
BB&T Corporation and Subsidiaries(Dollars in millions, except per share data)
)
(1) In addition to merger-related charges, operating earnings also exclude a one-time charge related to the accounting for leases totaling $26.6 million, net of tax, in 2005, nonre-curring contributions made by an affiliated trust, losses on early extinguishment of debt, and a one-time charge related to deferred taxes associated with BB&T's leasing opera-tions, which collectively totaled $303.9 million, net of tax, in 2003, a nonrecurring gain resulting from the implementation of a new accounting principle totaling $9.8 million in2002, a one-time gain on an investment in an electronic transaction processing company partially offset by a provision for the impairment of mortgage servicing rights totaling$28.2 million, net of tax, in 2001, and $145.3 million in net after-tax losses from a restructuring of the securities portfolio in 2000.
31
2005 2004 2003 2002 2001
Performance Ratios Based on Net IncomeReturn on average assets 1.58 % 1.62 % 1.25 % 1.72 % 1.41 % Return on average equity 14.95 14.71 11.97 18.32 16.78 Fee income ratio (fully taxable equivalent) 39.1 37.8 36.5 34.6 32.8 Efficiency ratio (fully taxable equivalent) 53.1 52.0 62.8 50.4 55.4 Net interest margin (fully taxable equivalent) 3.89 4.04 4.06 4.25 4.17
Performance Ratios Based on Operating Earnings (1)Return on average assets 1.60 % 1.62 % 1.67 % 1.74 % 1.60 % Return on average equity 15.12 14.74 16.01 18.53 18.96 Fee income ratio (fully taxable equivalent) 39.1 37.8 36.0 34.5 32.0 Efficiency ratio (fully taxable equivalent) 52.5 51.9 51.8 49.5 50.2 Net interest margin (fully taxable equivalent) 3.89 4.04 4.15 4.25 4.18
Performance Ratios Based on Cash Basis Operating Earnings (1,2)Return on average tangible assets 1.77 % 1.79 % 1.78 % 1.79 % 1.72 % Return on average tangible equity 27.82 27.17 24.81 23.93 23.58 Efficiency ratio (fully taxable equivalent) 50.4 49.7 50.5 49.0 48.4
Capital RatiosAverage equity to average assets 10.6 % 11.0 % 10.4 % 9.4 % 8.4 % Equity to assets at year end 10.2 10.8 11.0 9.2 8.7 Risk-based capital ratios:
Tier 1 capital 9.3 9.2 9.4 9.2 9.8 Total capital 14.4 14.5 12.5 13.4 13.3
Tier 1 leverage ratio 7.2 7.1 7.2 6.9 7.2
Credit Quality Ratios (3)Nonaccrual loans and leases as a percentage of total loans and leases .31 % .39 % .56 % .70 % .67 % Nonperforming assets as a percentage of:
Total assets .27 .36 .49 .56 .53 Loans and leases plus foreclosed property .40 .52 .72 .84 .79
Net charge-offs as a percentage of average loans and leases .30 .36 .43 .48 .40 Net charge-offs as a percentage of average loans and leases
excluding specialized lending operations (4) .19 .24 .32 .38 .34 Allowance for loan and lease losses as a percentage of loans and leases 1.10 1.18 1.26 1.35 1.36 Ratio of allowance for loan and lease losses to net charge-offs 3.84 x 3.42 x 3.17 x 2.94 x 3.44 x
Selected Ratios
BB&T Corporation and Subsidiaries
(1) Operating earnings exclude the effects of merger-related charges, which totaled $(6.8 million), $3.5 million, $55.1 million, $24.7 million and $154.7 million, net of tax, for the yearsended December 31, 2005, 2004, 2003, 2002 and 2001, respectively. Operating earnings also exclude a one-time charge related to the accounting for leases, which totaled $26.6 mil-lion, net of tax, in 2005, nonrecurring contributions made by an affiliated trust, losses on early extinguishment of debt, and a one-time charge related to deferred taxes associated withBB&T’s leasing operations, which collectively totaled $303.9 million, net of tax, in 2003, a nonrecurring gain resulting from the implementation of a new accounting principle totaling$9.8 million in 2002, and $28.2 million resulting from a one-time gain on an investment in an electronic transaction processing company offset by a provision for the impairment ofmortgage servicing rights in 2001.
(2) Information presented on a cash basis excludes the effects of intangible assets, purchase accounting adjustments and the related amortization expenses, which totaled $89.4 million,$84.0 million, $41.8 million, $12.7 million and $69.0 million, net of tax, for the years ended December 31, 2005, 2004, 2003, 2002 and 2001, respectively. In addition, cash basis resultsexclude merger-related charges and nonrecurring items as discussed in Note 1.
(3) Loans and leases are net of unearned income and include loans held for sale.
(4) Excludes net charge-offs and average loans from BB&T’s specialized lending operations.
32
Form 10-KBB&T Corporation files an Annual Report on Form 10-K with the Securities and ExchangeCommission each year. A copy of this report may be obtained upon written request to:
Christopher L. Henson, Senior Executive Vice President and Chief Financial OfficerBB&T Corporation200 West Second StreetPO Box 1250Winston-Salem, NC 27102-1250
Equal Opportunity EmployerBB&T Corporation is an equal opportunity employer. All matters regarding recruiting,hiring, training, compensation, benefits, promotions, transfers and all other personnelpolicies will continue to be free from discriminatory practices.
Analyst InformationAnalysts, investors and others seeking additional financial information should contact:
Thomas A. Nicholson, Jr., Executive Vice President Investor Relations336 733-3058
News MediaNews media representatives seeking information should contact:
Robert A. Denham, Senior Vice PresidentPublic Relations910 914-9073
Shareholder InformationShareholders seeking information regarding dividends, lost certificates or other generalinformation should contact:
Shareholder Services336 733-3477toll-free 800 682-6902 x33477
Please submit address changes in writing to:BB&T Shareholder Services150 South Stratford RoadSuite 300Winston-Salem, NC 27104
ClientsClients seeking assistance with BB&T products and services should call 1-800-BANK BBT (1-800-226-5228).
Web SitePlease visit www.BBT.com for information concerning BB&T’s products and services,news releases, financial information, corporate governance practices and otherinformation relating to BB&T.
05BB&T ANNUAL REVIEW
General Information
Corporate HeadquartersBB&T Corporation200 West Second StreetPO Box 1250Winston-Salem, NC 27102-1250336 733-2000
0 T h e r e ’s o p p o r t u n i t y h e r e
32308 3/3/06 8:52 AM Page 4
BB&T Corporation
200 West Second Street
PO Box 1250
Winston-Salem, NC 27102-1250
C0001125018
32308 3/3/06 8:51 AM Page 1