Greetings, ladies and gentlemen, and welcome to the BB&T Corporation First Quarter 2015 Earnings Conference. Currently all participates in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this event is being recorded. It is now my pleasure to introduce your host, Alan Greer of Investor Relations for BB&T Corporation. Please go ahead, sir.

Thank you, Amber, and good morning everyone. Thanks to all of our listeners for joining us today. We have with us today Kelly King, our Chairman & CEO, and Daryl Bible, our Chief Financial Officer, who will review the results for the first quarter of 2015 and give you some thoughts about the second quarter. We also have other members of our executive management team who are with us to participate in the Q&A session, Chris Henson, our Chief Operating Officer; Ricky Brown, the President of Community Banking; and Clarke Starnes, our Chief Risk Officer. We will be referencing a slide presentation during our comments today. A copy of the presentation as well as our earnings release and supplemental financial information are available on the BB&T Web site. Before we begin let me remind you that BB&T 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 those forward-looking statements. I refer you to the forward-looking statement warnings in our presentation and our SEC filings. In addition, please 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. With that, I will turn it over to Kelly.

Thank you, Alan, good morning, everybody, and thanks for joining us on our call. I hope you are enjoying a nice spring day. While this first quarter is seasonally a challenge for us, as most of you know, I believe it is a very clean and solid quarter. And while the environment is challenging, we are really well-positioned for the rest of the year and for the long-term. The reason I say that is because we are building a business which has a very strong diversified and resilient balance sheet. It produces steady revenue, less volatile earnings and we believe long term, less volatile steady growth in shell [ph] as well. Relative to the world, we are really excited about the future and will explain to you why as the course of the conversation. If you're following along on deck 3, our net income totaled $488 million in the first quarter. Diluted EPS was 67. We did have a penny in MRC charges so we would say core at 68. Revenues totaled 2.3 billion which was up 1.5% compared to the first quarter of 14. Had a strong performance in fee businesses and particularly in insurance where we had a record quarter. Our fee income ratio is up to a very strong 45.8% versus 43.6% in the first quarter of 14. ROA was 1.18%, ROE was 9.05%, and important our return on tangible common was 14%. With regard to loans which I'll give you a little bit more detail on in just a moment, excluding residential mortgage they did grow 5.4% which is pretty good in this environment. It was led by C&I, direct retail and sales finance. If you look at slide four, we'll give you – in just a moment I'll come to slide 4. Let me stay…

Thank you, Kelly, and good morning, everyone. This morning I'm going to talk to you about credit quality, net interest margin, fee income, non-interest expense, capital and our segment results. Continuing on slide six. As Kelly stated a few moments ago we are pleased to report a solid first quarter. Our performance includes outstanding results in credit quality. Net charge-offs were better than expected coming in at 34 basis points, down 13% and well below our long-term normalized range. Excluding Regional Acceptance, charge-offs were 18 basis points. Loans past due decreased a combined 20% showing continued improvement in almost every lending category. Going forward we expect net charge-offs to remain below 35 and 40 basis points in the second quarter assuming no material decline in the economy. NPAs declined 2% compared with the fourth quarter. NPLs declined 8%. NPAs as a percentage of total assets remain at the lowest levels since 2007 at 40 basis points. We expect NPAs to remain stable for the foreseeable future. Turning to slide seven, our allowance coverage continues to remain very strong to 3.6 times from 3.2 times net charge-offs last quarter, grew quarter provision of $99 million for the quarter compared to net charge-offs of $101 million. During the quarter, we completed a full review of our energy-related credit portfolio. The allowance includes an adjustment related to this review. Even with this, our criticized and classified ratios declined this quarter. Going forward we continue to anticipate no reserve releases. Continuing on slide eight. Net interest margin was 3.33% this quarter, down three basis points and well within our expectations. Core margin was 3.18%, down two basis points compared to the last quarter. The small decline in GAAP margin resulted from lower yields on new loans, runoff of acquired assets, offset by improved funding…

Thank you, Daryl. So overall again I think it was a very solid quarter. Relative to the market we had really good loan performance, excellent deposit growth, good fee income, record quarter for insurance, expenses were lower exile [ph] seasonal in pension expense. Most importantly we are well-positioned for the rest of the year and going forward. Our non-bank businesses have really given us diversified income which is less volatile. Efficiencies in M&A are really going to begin to pay off for us. In this environment it's really about consistent strategies and excellent execution. That is what BB&T is good about. Alan…

Thank you, Kelly. Amber, at this time if you would come back on the line explain how are participants can call in and ask a question. Thank you.

Thank you. [Operator Instructions] We will go first to Erika Najarian with Bank of America.

Morning.

Morning.

My first question, Kelly, is on your updated outlook on the rate environment. I remember last earnings call you were optimistic about potential fed actions this year and I think investors in the market are a little less so, if you could give us an update on how you think rates are going to trend for the rest of the year? and then Daryl, maybe as a follow-up to that, if rates don't go up in 2015, what the trajectory is for BB&T's core name, both on the stand alone BB&T basis and then overlaying Susquehanna?

Erika, that is obviously the question of the day I think for every. So, I tell you what I personally think. I think the Fed is going to raise short-term rates in the June to September time frame in spite of all their rhetoric about the recent changes and so forth. The reason is because I think they believe they need to get started on moving off the zero-based level. The economy is not great, but it's not bad. They really need to begin getting to psychology for a movement in rates, because at some point you've got to get rates up so when you go down you have some cushion. Now, having said that, I don't think you can expect a quarter every time they meet. And so, it is going to be a quarter that kind of signal's that its started and I think they're going to be very cautious about their wording and maybe even they'll say give you a quarter and kind of take it back, you know? Don't spend thins come right back. My point is they will start the process. So, I don't think over the next year and a half or so you should expect a material change in rates even though there will be a change in the direction. That means the rate environment will still be challenging for us and everybody else. And so, you know, our plans in general are we keep hoping and it would be nice if rates went up a lot. We're not counting on that. We're planning on running our business assuming that the environment about like it is, and we think we've got strategies to enable us to do that.

Erika, on your second part of your question, the guidance that we gave for margin, even though Kelly believes the rates are going up, we always use the forward curve when we model our projections. And we ran our models this month, we basically had no rate increases for 2015. It was really the month of December which basically had no impact for our company and margin. So, to answer your question, you know, I would expect our core margin to probably drop about three basis points in the second quarter. From that standpoint you are assuming we are able to get our loan growth targets projecting for the next several quarters we expect core margin to be flat. GAAP margin will probably be about 10 basis points higher than that for the next couple of quarters. As Susquehanna comes online in the second half of the year, that will improve our GAAP margin probably in the neighborhood of 10 to 15 basis points potentially and as that gets closer we will probably give a little bit more color by then.

Great. Just my follow-up question, you have been open in terms of potential consolidation activity going forward and we've seen in some of the small and midsize peers in your footprint we are starting to see credit trends create even outside of energy and I guess the question year is do you think the willingness to sell or least the willingness to negotiate a more reasonable price is sort of the issues in credit – is that going to change the tone of your conversations in 2015?

I think, Erika, everybody is experiencing the same environment Eric the interest rate you just alluded to has challenges in terms of technological costs going up a lot. Regulatory costs are going up, and you can't beat that environment by making poor quality loans and low priced loans. It is a very challenging environment. In to be honest, in this kind of environment it is a cost control game. You can't do so much in – that looks like adding scale. Do as much as you can organically but you can't push that because you might get scale and expenses but you lose it on net income as a provision. Our answer is mergers make more sense for us. I do believe to your point, Erika, others are beginning to see the same thing and I don't think that's a sign of witness for them. I think it's just a sign of scale advantages in a tough environment that's going to persist for some time. I expect the conversations to be more kind of practical and realistic about M&A going forward because I think everybody is settling into the recognition that is going to be a protracted tough environment.

Thank you.

We will go next to Gerard Cassidy with RBC.

Thank you, good morning guys. Kelly, can you share with us, you were talking about some of the lending areas where the competition is really intensified and more actors have come into play here. Is a non-bank competitors you are seeing more of for more just traditional depositories? Could you compare to the last time you saw this type of competition? Was at 06 or 05 for that time period?

Gerard, you have been watching us a long time Mike I have. This time it is tougher and the reason is because there are more actors out there. What we've got going on globally is obviously an extended period of really low interest rates and what's that is doing is causing assets all around the world to be chased by a lot of money. The U.S. has relatively higher yields anywhere except in China. Money from everywhere is – higher-yielding assets in the U.S. ensure enough in private equity funds and hedge funds and business development corporations, all kinds of factors out there competing with us – this environment is tougher than it was before. Bank to bank competition first time versus last time, it is probably a little tougher – this kind of long-term extended – I think everybody is reacting to a really tough environment. I think some frankly of getting a little overzealous in terms of trying to chase – and taking a look bit more risk than they ought to. Everybody says everybody else does it and we don't do it so I'm not trying to be critical. I'm saying it is a tough environment and everybody is trying to do the best that they can do. At least for us we have said consistently we are not going to chase loan volume and expense for quality. 'S loan volume as I tell our board is extraordinarily good relative to the environment we are experiencing.

Thank you. Too follow-up, you guys have obviously converted over to a single general ledger. Maybe Daryl can you share with us how much further do you have to go for updating your systems and second, how big of that acquisition could you do at the systems with the systems that you adjust implemented? What's the capacity of those systems?

Gerard, the system we went to is an SAT general ledger system. It is a very proven ledger system and the industry. Not as much in the U.S., but around the world in Europe and other countries. I think this is very scalable and easily double our size and maybe much more. One of the large competitors in the U.S., one of the top four banks also just converted to this general ledger system and they are a trillion plus company so I think it is very scalable.

Gerard, to prove that point, Chris and I about three weeks ago went to Australia in Sydney and Melbourne and visited three banks using SAP and we got extremely confirming feedback in terms of quality – we could certainly double easily our size with this foundation.

Kelly, are you looking to expand your footprint into Australia?

I really like Sydney, Gerard, but it might be a few years before we get there.

Okay, thank you.

We will go next to Betsy Graseck with Morgan Stanley.

Hi, good morning. A couple of questions. One was on the expenses, you know you called out where we are expecting to see them go, one of the reasons it was acquisitions. I was wondering if you could give us some color as to which are thinking there especially with Susquehanna – and maybe if you could speak to acquisition impact on revenues in the various lineups you called out?

So for the acquisitions and the second-quarter impact, B etsy, if you take the 2-4% increase I would attribute 1.5% of that to city and the bank of Kentucky. It is real there and it is mainly in line items and personnel and occupancy are the main drivers for that category. As you get into third quarter, Susquehanna will have a much more significant impact. If you look at their expense base today it is about $500 million on an annualized basis. In the – days we have phased in going over 12 to 18 months so it's going to have an impact initial on our run rate. I think it will update that a little bit better next quarter as we get closer to that acquisition closing, but you can kind of look at Susquehanna's numbers they released yesterday and use that as a gauge and layer in expenses. We say we get a 32% – we think that is definitely doable over a 12 to 18 month period peak.

On the revenue side – you didn't call out the acquisitions impacting revenue so just wondering if it just wasn't as big of a benefit that you see in Q2 and more of it Q3 event or two hard to parse it out?

The city deal is one that is in for the second quarter for the whole amount and that is basically there is not a real difference between the revenue expense pretty much matching each other. I think over time is where we get the accretion. The loan growth and the headcount growth over time, that is how we get that accretion and we have been very successful. We expect this went to be on track so that is how that will be accretive. For bank of Kentucky we do get a loan portfolio of about $1.3 billion that were going to get towards the second quarter and that will have an impact on the first quarter from a revenue perspective.

Betsy, remember file there is a little bit of a lag time, in all three of these cases we think the light will be shorter than typical. The reason is because in all three cases we are entering very large markets with very, very low market shares, with more products, more services, our strategies are very effective in this kind of market. Rick and his team think that, and I totally agree, that will would be able to ramp up the revenue side of all three of these acquisitions very quickly relative to other traditional mergers.

To get some positive operating leverage in the second quarter, but it should accelerate from there as the revenues come through from these deals

That's right.

I think, you know, these deals close, Betsy, and as we achieve cost saves, you know, positive operating leverage for the next six to eight quarters should be very achievable.

Okay, thanks.

We will go next to Matt Burnell with Wells Fargo Securities.

Good morning folks, thanks for taking my call. Daryl, maybe just a question if you can sort of on a BB&T standalone basis, with the general ledger system now up and running, is there much in the way of cost benefits that you're getting from that conversion, or are you still running sort of dual systems at this point and you don't expect to see much in the way of savings in the next few quarters?

We converted over Presidents' Day weekend in February. We ever really decommissioned the old system, that is going to take place later this quarter or into the third quarter. I think that will phase in over time. I would say the efficiency of the system plays out as we continue to automate and improve our manual processes to automated processes. It's going to take time for that to happen. The real benefit of these systems is there is any efficiency play for automation but it's really the more you can attach to the systems so now we have basically a work horse general ledger system. The key now is to try to get all of our other systems onto this system to get more efficiency to scale rather than have lots of other ancillary of the systems that support and convert more to the SAP environment so we have better control and more efficiencies and more automation. So that will play out over probably the next two to three years.

And maybe a question for Clarke, in terms of the delinquencies, those were down quite nicely both in an early-stage and 90 plus basis yet you were still suggesting no additional reserve releases going forward. How are you thinking about the trend in delinquencies and criticized assets going forward?

Great question, Matt, and I think our view is that we're operating more or less at or below normalized levels in a very benign current performance environment. While we feel really good about that and that's an opportunity to outperform and hopefully have a lower provision if our losses are lower, at the same time we are growing our loan book nicely, particularly in large corporate and other areas and we want to make sure we are properly and adequately reserved so that is why we said we don't believe it's appropriate right now to be releasing but we still feel good about the opportunity to outperform on credit in the near-term here.

Thank you very much.

And we will go next to John Pancari with Evercore ISI.

Good morning. Back to the margin Outlook, on the core margin, what gives you confidence that the core margin flattens out in the third quarter excluding rates and excluding deals following the compression you do expect in the second quarter and the compression we saw this quarter?

John, we have talked about this before over the last year or two. For us too have our core margin flattens out, we are really hoping and getting – loan categories. We need to get to the loan growth in our specialized businesses and our CRE businesses and those businesses to actually outgrow. But we are slowing their growth – lowest spread businesses. We are slowing the growth in prime auto which is also a slower spread business. As we slow that growth down and increase the growth in the others it is really the asset mix that is really what is driving the quarter stabilize. On the liability side there really isn't a whole lot of room to come down. That is really what we need to have happen for the core margin to stabilize.

And I can happen without commercial real estate really picking up all that much because buyer tone –

We believe it is so with the forecast we have.

Okay. Thanks for the color on the margin trajectory. I am wondering what is your margin guidance particularly with the back half of 15? What does that imply in terms of your spreading – expectations?

If you just look at the core bank, we would expect – income to start to rise as our loan growth kicks in. As bank of Kentucky basically comes in towards the end of the second quarter and have the full effect in the third quarter, that would also be a benefit there. As Susquehanna closes sometime hopefully in the third quarter, that would also have a huge benefit. But just all core basis by itself, we believe and are I will start to grow from second to third to fourth.

Okay, all right. Lastly, Daryl, based upon your earlier answer around – mortgage abatement, is it fair to assume the declines – portfolio should continue here?

Yeah, we have projections – it came down a lot this past quarter about 8% but that was driven partially by the loan sales as well as the refi and everything. I think the pace of it coming down will be slower the next couple of quarters that it should also shrink. So you will see a pretty good Delta between the core portfolio as well as the portfolio excluding mortgage. So I would expect it to continue to shrink not as much.

Okay, thank you.

We will go next to John McDonald with Sanford Bernstein.

Hi, good morning. I just wanted to see if there's any more precise estimate of the timing of the Susquehanna close, Daryl? In terms of our modeling, should we think about that you're open to close right at the beginning of the third quarter or is it just still very uncertain?

John, this is Kelly. You know, this environment is a different environment than any other we have played in. In the old days you could predict with a lot of positioned exactly when things could occur. It's really not that predictable today. As I said in the opening remarks we have a lot of confidence that will close in the second half. In all honestly at think it will close in the third quarter but I can't be precise enough whether it is July or August, I just can't be that precise.

Okay. Maybe, Daryl, you could help us think a little bit now, I know you said you would be more details later about the initial impacts in the first quarter when you do close that deal. Is it dilutive upfront before you get these saves? Just any sense of the timing of these saves and also the merger charges, how should we think about those as the first close the deal? Thanks.

The merger charges obviously will be pretty heavy in the first quarter two when we close it. I would say from an earnings per share basis in the first quarter it's probably not that accretive Tom a maybe a penny or two. Early on it is getting the cost saves and getting the businesses to perform and getting the growth engines and getting all of our products and the people in Susquehanna trained. When Ricky does his magic with the community bank, that really plays out but it doesn't happen in the first quarter. It takes a year or two.

Okay, but it could be accretive by a penny or two – even in the first quarter or two?

It's possible, yes.

Okay and then one follow-up question on deposit service charges. What did you see this quarter in terms of seasonality pressure on that line and how much are you seeing in maybe behavioral changes with folks managing their balance is better and having less overdraft and fewer deposit service charges?

This is Ricky, I think you answer your question. Obviously seasonality – but balances increasing or offsetting analysis service charges so they are using balances to pay for service challenges instead of hard fees. Certainly overdraft behaviors are becoming more managed by our people. I think a lot of that is the – benefit they are getting. They are using this savings to not necessarily spend more but manage opportunities in their existing lives so that not over drafting as much. Those impacts together had the decline you saw in service charges. We are still seeing great deposit growth. Balances are continuing to increase. That momentum continues and that could continue to put some pressure on service charge income as those behaviors continue. Certainly want to continue to try to grow accounts and with the increase in accounts you get the potential for more service charges based on volumes – as we go into the second, third and fourth quarters of the year.

Okay, thank you.

We will go next to Paul Miller with FBR Capital Markets.

Thank you very much. On the mortgage banking side, you talk about this segment the mortgage income was down to to lower servicing costs, – I'm a little confused about why was down wax.

In the fourth quarter, we had a reevaluation in our MSR assets see take that revaluation away, I would say mortgage banking was essentially flat which is actually pretty good because usually the first is a weaker quarter. It is really set up to have a pretty strong second quarter after good start so we have pretty good momentum in mortgage revenue right now.

And secondly, a couple of your competitors are saying the purchase market especially in Florida is doing very, very w ell, probably better than most people but given the purchase world was a disappointment a couple of years ago, I'm just wondering if you could – at any color to that?

Paul, this is Ricky again. Paul, – we spent a lot of time down there the early part of the year visiting our regions there and in every market, we are seeing very strong active purchase activities spanning be price ranges from low to high. Another thing we will see – would heard a lot about the weather in the Northeast causing people to say I'm coming to Florida and I'm going to be there. That impact is probably anecdotal but I think it shows you that Florida is back and people are again moving to Florida. They are buying homes – particularly in South Florida with – coming in buying condos. We see Florida just as you describe it, a much bigger more robust purchase market.

Thank you very much guys.

We will go next to Geoffrey Elliott with Autonomous Research.

The context of assets you're looking at essentially buying, how do you think about the assets of the businesses, the GE capital selling – BB&T ?

Jeff, we think the asset sales – are frankly going content in your especially – optimize the use of capital. We think that is a good thing for banks like us because as we talked about organic growth on a good quality basis is challenging so we're looking at everything that's available out there in the marketplace. Obviously we would be interested in any huge megadeals like Wells Fargo as has been talked about but we look at deals that make sense for us. We are fairly positive that some of those acquisition opportunities will come to fruition.

And then just shifting a little bit on expenses, I'm kind of curious in the divergence between personal expense up 6% year on year and full-time employees down 20%. I understand – with all of this, if you could just explain why those trends are so different?

Besides pension, we had an increase on – quarter pension and seasonal factors but on a like quarter basis, it is mainly the – is the main increase or decrease. We also and strong insurance revenue which tends to payout higher incentives so it's probably Ward incented related and pension related. We maybe had an uptick probably in health expenses and flex benefits from that perspective that would probably be the other driver.

Thank you.

We will go next to Nancy Bush with NAB research.

Good morning. Two questions here. Could you expand a little bigger discussion of the am risk transaction? I think you said you significantly – and significantly increased your partnership interest at the same time the got rid of a lot of risk so assorted missing a piece here. Could you just explain that? And also if you could repeat the merger charges that will accompany that?

Nancy, this is Chris Henson. We owned a portion of am risk. Am risk is the underwriter that underwrites wind catastrophe coverage. That gets place with many underwriters throughout the world, one of which was our own America coastal which we owned 100% of. What they did was underwrite condominiums in the state of Florida. We took real underwriting risk in America coastal. Both of these businesses were started up back in the 2006-2007 timeframe. Am risk as a general underwriter – both have performed exceptionally well. – has risen to the third largest in the U.S. High margins and a very high growth business and we just thought prior to what I call sort sword of the New World being and underwriter might've been okay. Sort of in the world operate today – being in the underwriting business is probably not a place for us to be long-term. It might've been okay for our performance but probably not the best place for us. More importantly, and risk is really key to our franchise. If you think about it, we have the second largest wholesale – business in the country. What they really focus on is placing hard to place coverages. One Kigo to partner in this is am risk in this whole underwriting wind cap coverage. What am risk really brings us is higher-margin high-growth no risk of loss and it behaves within the wholesale segment as an underwriter almost because it's really about large underwriters outsourcing – so it is a bit of a hedge in the wholesale business. It is key to franchise long-term and we thought it made much more sense to increase our interest there. It is the same management team run the – the one that has been running America coastal.

This is Kelly, – as Chris said we did the American coastal thing about nine or so years a go. We did it at a time if you recall that most of the underwriters had left Florida and we were doing Florida and we want to show market support so without there was an opportunity to provide a bit of capital in that market and we have these really good underwriters in am risk that new that market extremely well but we only put $50 million in it. – we actually made a lot over the last seven or eight years and we frankly redeployed that into the – unit Chris described. We made some good money and decided not to be grieving took it off the table and we put it into the core part of our business that does not take risks..

I would think other really as a trade. – into more of a broker.

Okay, so are you a minority partner in am risk, if I could get you to discuss your partnership interest?

Absolutely. We are majority holder of am risk, a clear majority. I call it a significant partnership interest. In terms that you ask about the balance sheets, we really experienced again on the transaction. It is just from a goodwill impairment perspective, we have to look at it from the context of the entire wholesale segment. When you take that into account we had a small impairment.

But I think Daryl had said something, can you tell me what you said the charge was going to be in the second quarter?

The goodwill impairment is probably going to be between – call it $35 million give or take.

And it's all good well.

It's a non-cash charge.

No, we had a positive economic gain because the overall proportion of that business in the overall insurance business. We have 90% ownership in am risk and that is a really good position for us because it is a very good business.

Okay. My follow-up question, I think you cited a 1.5 per% gain on sale and the mortgage business is quarter. That's a bit behind some of your competitors which I think are reporting in excess of 2% gain on sales. Is a mixed issue for you guys? What do you expect that 1.5% to go in the second quarter?

It is really a mixed issue. If you look at the pieces, retail spread was 3.62 and correspondence spreads were 36. Correspondence was about two thirds of the business which is really why it was down lower. We expect going in this next quarter to have stronger purchase activity and stronger retail so it should move into the other direction this next quarter.

Thank you.

We will go next to Ken Usdin with Jefferies.

Good morning guys. You alluded a little bit to the Ricky Brown magic in retail but I'm – on the Susquehanna side. You mentioned 10 to 15 basis points a potential increased to the – post- close. They had a – when I look at the numbers. I know you're going to give us more detail later on but can you help us understand what you were saying that would be incrementally beneficial because that implies maybe a four-port 5% – is it residual lease accounting or just where rates are relative to announcement? Any color there would be helpful. Thanks.

Typically what we do an acquisition – what we always do is we basically taken all the client activity so we taken the client owns inclined deposits. We were very hard to X out any non- claim borrowings – and other opportunities there. And in the investment portfolio decision is really a decision on whether we need they liquidity or not. If you don't need securities or liquidity and also helps razor margin. There are a lot of things you were to optimize the overall piece so it fits into your total organization but we will give you more color next quarter on that.

I guess if that math is right the type of earnings accretion you could get relative to that 3% indicated could be decently larger?

It's going to be off a smaller base because you have smaller earning assets…

That's a fair point. Okay. Secondly on the insurance business. You guys have been talking about 6% – organic growth and you had some – I was wondering if you could just elaborate, there were some changes in the seasonality. Could you talk about this organic opportunity and if we should see a better year over year trajectory from your?

It's Chris again. If you look on a same-store sales basis it would be about 3% quarter over quarter kind of common view. What we expect is a better second quarter than we had first. Generally this is busy the second quarter is going to be the strongest followed by the first followed by the fourth and the third. What you are referring to is most of the EB business as Daryl alluded to earlier hits in the first quarter. We still believe to the balance of the year we're going to have enough strength out of the business to – five to 6% core growth year over year. So we feel very good about that. What you're seeing right now because we haven't had large loss periods, the retail businesses are sore – we are seeing very strong strength in the retail business. As Kelly alluded to, retails new retailers new business growth was 32%, wholesale was 23. The new business growth was about 26%.

Okay, thanks guys.

We will go next to Eric Wasserstrom with Guggenheim securities.

Thanks very much. Just a couple of questions. Versus the foreclosure inventory on the legacy portfolio, excluding the FDIC sales, it's the members but it's ticked up pretty consistently over the past few quarters. Can you indicate what's driving that trend?

Eric, this is Clarke. That is mostly in our prejudicial mortgage in some of the – and getting the foreclosure is done and also we had some delays and closings frankly in the first quarter because of the weather but we feel really good but we look out on the pipeline. I believe you will see that stabilize to strike him down a bit so were not concerned about it. It's mostly working for residential stuff but we feel good about it.

Great, thank you. And/or brokerage commissions line item was down a bit in the period which is a little bit different from peers. Were using just a different trend activity than the broader markets?

We just had really strong equity deals in the fourth-quarter that in fact strongest in our history. We had the biggest – so we are just bouncing back from that. If you look at the core business it is still doing very well. – the retail broker commissions have grown about 9% so it's really nothing more and we have a strong fourth-quarter.

Got it. Lastly, as I think about your common equity Tier 1, it seems like there are several puts and takes. There is an issue is coming and also some buyback on the numerator and the denominator you've got assets coming on potentially some relating as those assets move to the fully phased-in basis which may be Susquehanna is it may be doing today and all that kind of thing. Net of all of that, which be our expectation about your resulting common equity tier one add year and your and versus where it is today? Is that higher or lower?

For the – if you looked look at the dividend request that we had and the buyback and the four acquisitions we had embedded in there, we have well over 100% use of our retained earnings over this five quarter period. So if you look at our common equity tier one call it 10 and a half now transition basis it's probably going to end up a little better 10, call it 9.8 give or take 10 basis points so we'll probably going to use 60 basis points of capital over the next five quarters.

Excellent, thanks very much.

We'll go next to Marty Mosby with Vining Sparks

Daryl, I went to ask you a little bit more and maybe even challenge on the sale of the mortgage residential and running that portfolio down. If you look, the use our three to 3.5% on new originations and if you get rid of that the only thing you can put it into is securities. Kelly didn't think rates were going up that quickly so I'm just curious what's driving the overall thought process here?

I know Marty you are an old CFO finance guys so you understand all this stuff, but if you look our match funded basis and you look at these assets, these assets have a credit spread we are putting on the books well north of 100 basis points if you actually try to fund these assets call it 80 basis points. The negative complexity you have an rates eventually do go up these assets will really start to extend out and it's just a really tough asset to fund properly over the long term. I think selling as much as we can out and getting the revenue that we can is the right thing for our company right now. All about overload businesses are growing really well. We are growing even with this running off so I think that's positive. We are stabilizing core margin with basically flat interest rates which is really pretty good in this environment.

Marty, you have to keep in mind, our primary driver in this is diversification. Even if it's – were just not – not consistent with our long-term diversification strategy. We wanted to bring it down some. It's not dramatic but we wanted to bring it down some to get it in line with our justification plan.

Daryl, just pulling that altogether, what you are substituting out is the extension risk for shorter securities which is that is really what is making more asset sensitive so when you're looking at that each quarter, asset sensitivity getting a little bit stronger, is that what is driving that needle there?

Is one part of it but the other piece is really the unbelievable strong growth we have gotten in core deposits. Core deposits, they are strong for the industry. Our core deposits growth and community bank and corporate banking has been phenomenal. If you go back six or seven years ago, the percentage of DDA to our funding was in the midteens. We are now over 30% DDA funded. That is just a completely different BB&T.

And then just lastly, Kelly, you talked a lot about the pricing pressure on loans. As we do see rates starting to move up slowly, can you envision with all the liquidity which is driving like you were saying be chasing of assets maybe being the opposite and allowing a little bit more room once you get some relief with rates moving even modestly higher to be up to re-create some deposit spreads?

Absolutely. I think that's an area that will create the training of the deposits in the system. I think it will create an opportunity for this asset investors to – and all of that will create asset pricing increase with the banking segment.

What about deposit spreads?

The deposit spreads – but I personally think is – simply because we have given up a lot of deposit you are things like NSF's and other actors over the last two or three years. I think all of that will be Incorporated into decision-making which will cause a lag on the deposit pricing as we go up.

Thanks.

We will go next to Chris Distacio with KBW.

Good morning Kelly and Daryl, how are you?

Good morning.

Most of my questions have been answered but I wanted to go over the accounting change in the quarter. That improves are operating leverage overnight, correct? – the offset is not an expense –

That's correct. We basically move a negative income item out inputted in the – item. We also restated 2014 financials so if you go back and compare numbers versus last quarter you're going to see the 2014 change. This is proportional accounting we had to do for our tax credit businesses.

Okay, I appreciate the color on page 18 of the supplement in terms of what it would have been in the past. If I were to average those numbers both on the other income impact and the tax impact that would be roughly the same for the quarter? In other words you would've benefited from the change – injured taxes would've been up by about $40 million on the accounting change?

That's right, Chris.

That concludes today's question and answer session. I would turn the conference back over to Alan Greer for additional or closing remarks.